Adapting to Change: Unleashing the Power of Nonprofits

1
Adapting to Change Unleashing the Power of
Nonprofits
Strengthening Nonprofit Advocacy Jeffrey M. Berry
2
Three Topics

• (Mis)understanding of the law on advocacy
• Characteristics of effective nonprofit advocacy
• Is advocacy your mission?

3
A Bit of Background

• Why should political scientists study ostensibly
  nonpolitical nonprofits?
• Nonprofits have the ability to represent
  those without a voice
• The national survey for A Voice for Nonprofits
  filled out by more than 1700 501c3 nonprofits
  from around the country demonstrates that
• Nonprofits can do better

4
What Do Nonprofit Leaders Know About the Law on
Advocacy?
Can your organization Correct Answer
Answering Correctly
Support or oppose federal legislation Yes 54
under current IRS regulations
Take a policy position without reference
Yes 61 to a specific bill under
current regulations Support or oppose federal
regulations Yes 62   Lobby if part of
your budget comes from Yes 32
federal funds Use government funds to
lobby Congress No 93
  Endorse a candidate for elected office
No 84   Talk to elected
public officials about Yes 80
public policy matters   Sponsor a
forum or candidate debate Yes 45
for elected office
5
Executive Directors Flunked The Test

• Why?
• The law is confusing
• Low priority for executive directors

6
What Is Advocacy? What is Lobbying?

• Legally, Lobbying is a form of Advocacy
• The legal definition of Lobbying
• Direct persuasion of legislators to support or
  oppose a specific piece of legislation
• Grassroots mobilization to try to persuade
  their legislators to support or oppose a
  specific piece of legislation

7
Lobbying by 501 (c) (3)s is Legal
Organizations can chose between two sets of rules

• A soft restriction the substantial threshold
• Not clearly defined
• Burden of proof to establish what substantial
  means
• Single year violation can result in loss of
  tax-exempt status
• Reporting required on tax form 990
• The H election for 501c3 nonprofits
• This preferred option is based on allowable
  expenditure test
• 20 for first 500,000 of annual expenditure
• 15 of the next 500,000and so on based on
  size..not to exceed 1M
• Has clear and specific definition of lobbying
• One time application to elect the expenditure
  test
• Nonprofits may spend 1/4 of the total lobbying
  budget on grassroots lobbying

8
Two Solutions
  1. There is no book, 501(c)(3) for Dummies.
Youll have to learn it the hard way. 2.
Take the 501(c)(3) H election.
9
IRS Form 5768 or the H-election Form
10
Use of Funds for Lobbying

• Federal Contract Funds cannot be used to
  lobby at the federal, state or local levels
• Federal Funds cannot be used for
  electioneering purposes
• Nonprofits may use non-earmarked or
  general purpose funds to lobby
• Private foundations cannot earmark grant
  funds for lobbying
• Community Foundations can earmark grants for
  lobbying (they are exempt under 501(c)(3))

11
Characteristics of Nonprofit Organizations that
are Effective at Advocacy

• Effectiveness is not linked to
• Size of membership
• Size of the staff
• Annual income
• Number or size of government grants

12
It Depends uponTwo Important Factors

• Effectiveness is linked to
• Putting someone in charge of government
• relations
• Research capacity. Got data?

13
Is Advocacy Your Mission?
The professor is told no