Tax Exempt Organizations and Lobbying
Activities to support or oppose a ballot measure are considered as “lobbying.” The information below is based on our own research on the involvement of charitable organizations, other non-profits, and government officials in lobbying activities. The information below should not be construed as legal or tax advice. Please consult your tax attorney or the IRS Hotline (877-829-5500) for specific questions pertaining to your organization.
California Against Slavery is a social welfare organization under the IRC § 501(c)(4).
Here’s a nicely done presentation summarizing the tax exempt organizations.
501c3: Charities, Churches/Religious Organizations
A 501c3 organization may engage in lobbying activities as long as these do not constitute a substantial part of its activities:
“In general, no organization may qualify for section 501(c)(3) status if a substantial part of its activities is attempting to influence legislation (commonly known as lobbying). A 501(c)(3) organization may engage in some lobbying, but too much lobbying activity risks loss of tax-exempt status.
Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office), or by the public in referendum, ballot initiative, constitutional amendment, or similar procedure. It does not include actions by executive, judicial, or administrative bodies…”
Read more on IRS site.
Lobbying activities include making contributions to a ballot measure committee:
“May a section 501(c)(3) organization make a contribution to a ballot measure committee (committees supporting or opposing ballot initiatives or referenda)?
Yes, a section 501(c)(3) organization may make a contribution to a ballot measure committee (committees supporting or opposing ballot initiatives or referenda), but it must include such contributions in its lobbying calculations for purposes of determining whether a substantial part of its activities consist of attempting to influence legislation.”
Source: http://www.irs.gov/charities/charitable/article/0,,id=207341,00.html
There are two tests to measure substantial lobbying activities:
1. substantial part test
2. expenditure test
Contact the IRS politics hotline 877-829-5500 for more specific questions (they are actually quite helpful and quick!).
501c4, c5, and c6 Organizations
501(c)(4) Social Welfare Organizations, 501(c)(5) Labor Organizations, 501(c)(6) Business Leagues
“May IRC 501(c)(4), (c)(5), or (c)(6) Organizations Engage in Attempts to Influence Legislation (Lobbying)?
Yes. Organizations described in IRC 501(c)(4), (c)(5), and (c)(6) may engage in an unlimited amount of lobbying, provided that the lobbying is related to the organization’s exempt purpose.”
Source: Political Campaign and Lobbying Activities of IRC 501(c)(4), (c)(5), and (c)(6) Organizations
City Councils, Public Officials and Employees
SUMMARY: Public officials and employees have constitutional rights to promote or oppose ballot measures as long as they do *not* use the public’s time, funds, or other resources to do so. Basically, do it on your personal time and dime. However, objective analysis and information about a ballot measure may be provided using public resources/funds.
The following is abstracted from BALLOT MEASURE ADVOCACY AND THE LAW: LEGAL ISSUES ASSOCIATED WITH CITY PARTICIPATION IN BALLOT MEASURE CAMPAIGNS
“May a city council officially endorse or oppose a ballot measure?
Yes, the decision by a city council to go on record in support of or in opposition to a ballot measure has been held to be a permissible use of public resources. The council’s decision should be made during a regular meeting that is open to the public and to the expression of the public’s views. If the City Council adopts a resolution endorsing or opposing a ballot measure, the resolution should include a statement that no public funds shall be used in the campaign for or against the measure.
May an elected official take a position on a ballot measure?
Yes, a public official has a first amendment right to speak out on governmental matters upon being elected to office. However, a public official should not use public resources to campaign for or against a ballot measure. City officials should not take part in ballot measure campaigns while on “city time” and should be careful to separate their official work from their political and campaign work.
May a public employee support or oppose ballot measures?
Yes, a public employee does not give up his or her constitutional rights upon joining a public agency. With certain exceptions, no restrictions may be placed on the political activities of public employees. However, public employees must be careful not to use public resources to advocate a position on a ballot measure. As a precautionary measure, many cities prohibit or restrict their employees from engaging in political activities during work hours or while on city property.
May cities analyze the effect of ballot measures on cities and publicize this information?
Yes, cities may use public resources to objectively evaluate a ballot measure’s impact on the city. The results of a fair and impartial analysis may then be made available to the newspapers, advocacy groups, and others who may make use of the information if they choose. Public funds must be used only for materials that are strictly informational and not for those that expressly advocate a position.”
Here is a handy brochure.
