What Nonprofits Can Do

Once a nonprofit elects to come under the 1976 law, it is allowed to spend 20 percent of its first $500,000 of annual expenditures on lobbying ($100,000); 15 percent of the next $500,000, and so on, up to $1 million per year. This is obviously quite ample, but it is even more generous than it appears, for there are seven legislation-related activities that nonprofits may conduct that are not considered lobbying by the Internal Revenue Service and thus can be done without counting against the $1 million limit. The first three of these are similar to those that private foundations enjoy: nonpartisan analysis and research, technical assistance to committees, and self-defense. The other allowed activities are making contact with executive branch employees or legislators in support of or opposition to proposed regulations; lobbying by the organization's volunteers; communications with the nonprofit organization's members (so long as the organization does not explicitly encourage its members to lobby); and verbal discussions of broad issues with members of the legislative or executive branches, so long as specific legislation is not discussed. Clearly, once a nonprofit organization has elected, its options for participation in the policy arena are many and varied. Again, this is a very condensed version of the rules, INDEPENDENT SECTOR has created an extremely helpful handbook, The Nonprofit Lobbying Guide (Smucker, 1999), and it would be wise to read this for a fuller understanding of the subject before making grants in this area.