Nonprofits that engage, or are thinking about engaging, in lobbying and political activities need to know what the tax laws will allow. Charities are limited by 501(c)(3) in the amount of legislative lobbying they may conduct, and absolutely prohibited from participating or intervening in an election for public office, while organizations exempt under other sections of the Internal Revenue Code like social welfare organizations, unions, and trade associations are unlimited in lobbying and may engage in some candidate electoral activity (but may be subject to tax on expenditures for these purposes). Private foundations are prohibited from lobbying entirely, and must ensure any lobbying conducted by their grantees is not attributed to them. As one of a few centers of legal expertise in the United States, Adler & Colvin has built a national reputation for advising charities and other nonprofits about the complex tax laws that regulate lobbying and political activities they conduct. We coordinate our representation with election law attorneys as needed.
Areas of Focus
- Safe ways nonprofits may advocate for social change.
- Ballot measure activities, which could subject a nonprofit group to campaign disclosure rules in addition to tax laws limits and disclosures.
- Charities relating to, educating the public about, and commenting upon, candidates for public office.
- Grants and donations to organizations that may lobby or activate voters.
- Protecting private foundation funders from attribution of grantees’ lobbying.
- Using private foundation funding in public policy work.
- Grass roots lobbying.
- The Section 501(h) lobbying expenditure election, an IRS test that sets specific dollar limits a charity is allowed to spend on lobbying.
- The “no substantial part” test for lobbying, an IRS test for charities that do not elect to have dollar lobbying limits under Section 501(h).
- The “primary purpose test” that 501(c)(4), 501(c)(5), and 501(c)(6) organizations must meet in order to retain their exemptions.
- The member notice of nondeductible dues or proxy tax requirements under Section 6033(3) that apply to many 501(c)(4), 501(c)(5), and 501(c)(6) organizations.
- Tax issues for political organizations, such as the tax-exempt Section 527 groups created primarily to influence nominations, candidate elections, and appointments.
- Tandems, families of nonprofit entities that share the same brand and are formed specifically to engage in a full range of political activities using 501(c)(3), 501(c)(4) and 527 tax exemptions.
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Related Publications (6)
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April 2019
Practitioner Perspectives on Using Section 501(c)(4) Organizations for Charitable Lobbying: Realities and an Alternative
This paper, originally published in the NYU Journal of Legislation and Public Policy, discusses a wide array of issues arising from the use of Section 501(c)(4) social welfare organizations to conduct the lobbying necessary to advance charitable goals. The paper goes on to propose an innovative legislative change that would allow the creation of a…Authors
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February 2018
Lobbying Overview for Private Foundations
Private foundations’ expenditures for legislative lobbying are prohibited as “taxable expenditures” by Section 4945 of the Internal Revenue Code. For the purpose of deciding what is prohibited lobbying, private foundations may rely on the definitions found in Sections 501(h) and 4911 of the Internal Revenue Code, which define lobbying for those public charities that have…Author
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May 2013
Summary of Proposals for Federal Tax Law Simplification Relating to the Political and Lobbying Activities of Tax Exempt Organizations
These proposals were originally developed during the first half of 2011, with valuable assistance from many colleagues, by the authors, who are (and were at the time) the co-chairs of the Political and Lobbying Activities Subcommittee of the Exempt Organizations Committee of the Tax Section of the American Bar Association, in anticipation of an Administration…Author
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April 2010 (Tax Analysts)
Political Tax Law After Citizens United: A Time for Reform
When the U.S. Supreme Court announced its decision in Citizens United v. Federal Election Commission on January 21, 2010, the immediate and still resonant reaction from many quarters has been: "this will open the floodgates" for corporate spending to influence the democratic election process in America. We hear outrage at the concept that "corporations are…Author
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Past Events
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Virtual & In-Person Presentation September 20, 2024
Practising Law Institute's Corporate Political Activities 2024: Complying with Campaign Finance, Lobbying, and Ethics Laws - Session: "Political Activity by Nonprofits and Advocacy Organizations"
After completing this session, participants will be able to answer the following questions:
- What types of tax-exempt organizations can be politically active?
- Can they engage in independent campaign expenditures and other political activities?
- What is the difference between “dark money” and super PACs?
- What questions should a donor ask when partnering with nonprofits?
Co-Presenters:
- Caleb Burns, Wiley Rein LLP
- Jason Kaune, Neilsen Merksamer Parrinello Gross & Leoni LLP
- Molly Meegan, American College of Obstetricians and Gynecologists (ACOG)
- Eric K. Gorovitz, Adler & Colvin
11:30 a.m. to 12:30 p.m. ET.
Washington, D.C.
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In-Person and Virtual Conference September 19, 2024
Training with Eric Gorovitz: How 501(c)(3)s Can Educate and Advocate During Election Season
Changing policies and legislation at the local, state, and federal levels impact our community in numerous ways. Now more than ever, it is important for community leaders in the nonprofit and faith-based sectors to understand their rights and responsibilities regarding advocacy to benefit children, youth, and families. Upon completion of the training, participants will be able to utilize lessons learned in November 2024.
Participants will learn:
- To engage in public policy advocacy affecting your sector.
- The range of advocacy activities available to nonprofits and faith-based organizations, including the definition of “lobbying” and several powerful exceptions to that definition.
- Strategies for expanding capacity to influence public policy.
- The tools and opportunities that the federal tax code provides for nonprofit organizations, including funders and grantees exempt under Section 501(c)(3).
- How nonprofit organizations may calculate how much lobbying the tax code allows them to do, and how to maximize the impact of the funding they have available for lobbying.
Who should attend?
This training is specifically designed for Executive Directors, Board Members, and faith-based Leaders. It is important that the executive director and a Board Member from each organization attend the training to understand the role each plays in deciding to engage in advocacy efforts.9:30 a.m. – 11:30 a.m. PT
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In-Person Conference May 21, 2024
Western Philanthropy Conference 2024 - Session: "Effective Strategies for Influencing Public Policy”
The election is coming! While private foundations are subject to a number of restrictions when it comes to lobbying and political activities, there are still ways in which foundations can be involved and help create change. Additionally, family offices and foundations are starting to explore other vehicles, such as social welfare organizations, to allow for more flexibility when it comes to these activities. Come prepared to learn how to be an influencer of change and what guardrails to consider as your foundation moves forward.
1:00 p.m. – 2:15 p.m. PT
Seattle, Washington
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In-Person Conference September 10, 2023
California Political Attorneys’ Association's 2023 Retreat - Session: “Scams, a GLAM, and some Flim-Flam: Tax Topics for Political Attorneys”
10:55 a.m. – 11:55 a.m.
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Webinar August 10, 2023
CalNonprofits Session: "Ask a Nonprofit Lawyer: You Have Questions, We Have Answers"
11:00 a.m. – 12:00 p.m. PT
Free for CalNonprofits members; $45 for not-yet-members
Join us for something new! We’re bringing together two of the state’s most experienced nonprofit legal minds to address some critical nonprofit legal basics and answer some of your most pressing nonprofit-related legal questions. Eric Gorovitz and David Levitt, both principals at nationally recognized Adler & Colvin, will discuss such issues as compliance, privacy and data security, fundraising regulations, lobbying, and employment law as it applies to nonprofits.
You can also help guide our discussion by submitting your own questions for Eric and David. What legal quandaries are keeping you up at night? Is it about your board? Are you 501(c)4 curious? Let CalNonprofits know via the registration form, and we’ll do our best to respond to as many questions as possible. CEO Jan Masaoka will be on hand to help us sort through our sector’s most pressing concerns.
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In-Person Conference January 19, 2023
The University of Texas School of Law’s 40th Annual Nonprofit Organizations Institute Conference - Session: "A View of the Sector"
Explore the latest in policy and regulation from the US Government in an effort to answer the question: What just happened? You’ll be the first to know about topics like donor-advised fund regulations, end-of-year legislation, and what is Congress likely to do next? What about those expiring incentives for charitable giving, will they be renewed? Meanwhile, the Supreme Court continues to unwind the regulatory powers of the executive branch.
8:30 a.m. – 9:30 a.m. CT
Co-Presenter: Alex Reid, Baker & Hostetler LLP
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In-Person Conference October 20-21, 2022
"Ask an Expert" at the National Center for Family Philanthropy’s 2022 National Forum on Family Philanthropy
“Ask an Expert” is an opportunity for forum attendees to meet one-on-one with a legal professional to discuss and gain valuable insight on issues pertinent to the management of their organization(s). Ms. Nancy E. McGlamery, Principal at Adler & Colvin, will be available for individual “Ask an Expert” sessions on Thursday, 10/20, and Friday, 10/21 at the National Forum. Register for the “Ask an Expert” meeting (20 mins) – attendance is limited. Please note that Ms. McGlamery can help you understand the laws, but cannot provide legal advice for specific situations.
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Presentation October 5, 2018
2018 Public Health Law Conference: A Public Health Approach to Gun Violence, Legally Speaking
Phoenix, AZ
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Webinar September 6, 2018
International Center for Not-for-Profit Law - Get Loud, Stay Safe: Nonprofit Advocacy in an Election Year
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Presentation June 5, 2018
CalCPA Not-for-Profit Conference: "Lobbying, Legislative and Political Activity (Tax)"
Moderator: Deborah Kaminiski, Squar Milner LLP
Co-presenter: Dinah Stephens, Planned Parenthood Los Angeles
Burbank, California
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Presentation May 1, 2018
Center for Volunteer and Nonprofit Leadership, Emerging Leaders Program: “Nonprofit Legal Compliance”
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Panel April 25, 2018
Nonprofit Governance – Charitable Advocacy: What Nonprofit Organizations Need to Know "Issue Advocacy: Special Considerations in an Election Year"
Co-panelists: John Pomeranz and Eric Rodriguez
Co-sponsored by Independent Sector and the Council on Foundations
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Presentation March 8, 2018
The California Endowment’s Center for Healthy Communities Oakland - “Enhancing Policy Capacity”
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