• 20% of the organization's total annual expenditures of $500,000 or under, plus
   
• 15% of expenditures between $500,000 and $1,500,000, plus
   
• 5% of expenditures above $1,500,000, up to a ceiling of $1,000,000 on the total lobbying nontaxable amount.

No restriction on the amount of lobbying that may be undertaken is imposed by OMB Circular A-122 "as long as none of the lobbying costs, either direct or indirect, are met from funds obtained through a grant or contract or subgrant or subcontract from a federal agency."

The question about what issues to lobby on is entirely at the discretion of the 501(c)(3) organization.

As an election approaches, it is useful to review our policies regarding allowable activities for nonprofit organizations.

Although a charity may engage in certain types of lobbying activities, it may not engage in political activity. If a charity engages in political activity, or if its lobbying activities exceed either (1) a substantial part of its activities or (2) the limits under Section 501(h) of the Internal Revenue Code, the IRS may revoke the tax-exempt status of the organization.

The IRS may revoke an organization’s tax-exempt status if the organization intervenes or participates "in any political campaign, on behalf of (or in opposition to) any candidate for public office." [I.R.C. 501(c)(3),] Political activity is defined as intervention in a political campaign, while legislative activity concerns communication in regards to legislation (broadly defined). This restriction on political activity involves three major areas of consideration: who a candidate is, what "intervention" or "participation" is, and when political activity by individuals will be attributed to a particular organization. Therefore:

A. Who is a candidate?

A candidate is a person running for an elective public office, on the national or local level. The fact that an election is nonpartisan does not make it any less a political campaign. A person becomes a candidate once he or she declares candidacy for the office.

B. What is "intervention" or "participation"?

Intervention or participation occurs when an organization expresses an opinion about any candidate in a political campaign.

Charities may, however, carry out "voter education" activities. The voter education activity could indicate how candidates voted in the past. Voter education could also mean a survey of candidates' opinions, as long as all the candidates were included and the charity did not indicate a preference.

C. When will political activity by individuals be attributed to the Alliance for Children and Families?

The law of agency, which generally describes how one entity can be responsible for the actions of others, governs whether political activity by individuals will be attributed to the Alliance for Children and Families. In other words, political activity by individuals under the actual or apparent authority of the Alliance for Children and Families, or whose acts are ratified by the Alliance for Children and Families, are treated as acts by the Alliance for Children and Families.

One word of warning: although the organization may want to distance itself from a staff member who is running for public office, laws in some states prohibit organizations from disciplining or discharging an employee because of his or her political activity. The organization must, nonetheless, make sure that none of its assets (such as phones, office supplies, computers and Fax machines) are used for political activities, and that the employee/candidate is not acting under the organization's direction or with its support.

Any endorsement of a political party by the Alliance for Children and Families volunteers, or staff acting in an official capacity is specifically prohibited by IRS regulations.

It is important to remember that political participation as the Alliance for Children and Families can cause the loss of the 501(c)(3) tax-exempt status.

NONPROFIT POLITICAL ACTIVITIES

Nonprofit organizations should not be afraid of lobbying out of fear of committing an illegal act. Nonprofits can legally take a position on legislation or policy, engage in analysis and public education around a policy issue, meet and communicate with public officials in an attempt to influence their decisions, and participate in nonpartisan voter registration or get out the vote activities. The rules of nonprofit lobbying are simple and easy to follow.

Nonprofit 501(c)(3) organizations are forbidden from engaging in any political activity in support or opposition of a candidate for public office. The Internal Revenue Code states that 501(c)(3) organizations must "not participate in, or intervene in (including publishing or distribution of statements), any political campaign on behalf of any candidate for public office." A 501(c)(3) organization that violates this rule may lose its tax-exempt status and face other financial penalties. The IRS allows 501(c)(3) organizations to undertake nonpartisan activities to educate the public about issues or encourage citizens to vote. In order to distinguish between illegal political activities and legal voter education and registration activities, note that the following activities are clearly prohibited by 501(c)(3) organizations:

• Formal or informal endorsement of a candidate for public office. Recruiting an individual to run for public office, or supporting an individual before he or she officially registers as a candidate is considered political activity.
   
• Publication or distribution of statements in favor of or in opposition to a candidate.
   
• Direct financial contributions or other support to a candidate, political party, or political action committee (PAC).
   
• In-kind contributions to a candidate, political party or PAC, including, but not limited to provision of facilities or office space, mailing, membership, or donor lists; or other resources for fund raising.