As the racial justice movement in the US has gained momentum, many nonprofits are now looking into how they can address the systemic injustice that has affected the country. While we have already advocated for a mission, changing the legislative structure to address these issues can be hard.
Many nonprofits are concerned about the potential impact of political advocacy on their operations. This is due to the IRS’s vague laws regarding the extent to which certain charitable organizations can influence legislation.
Many nonprofits are also surprised to learn they can freely participate in lobbying and advocacy activities. Here are some common myths about these activities.
Myth #1: Advocacy and lobbying are the same
Advocacy aims to support a cause and help achieve legal and social change. Since many nonprofits are focused on addressing specific issues, they are constantly engaged in advocacy. The Alliance for Justice claims that lobbying is not exclusively advocacy.
A project must involve communicating with legislators about a certain legislation to be considered a lobbying activity. It must also urge the public to contact the officials concerned. The IRS places restrictions on the activities of nonprofits in lobbying.
Nonprofits need to know that they can still participate in advocacy activities without worrying about IRS restrictions.
Myth #2: Nonprofits can’t lobby
The IRS has regulations and policies requiring certain charitable organizations to follow to maintain their tax-exempt status. Despite these restrictions, certain nonprofits are still allowed to participate in lobbying activities. These activities can be carried out if they pass either an expenditure or substantial parts test.
The expenditure test allows organizations to report their activities related to lobbying. However, activities that are aimed at influencing legislation are prohibited. The IRS also provides guidelines that can help determine if certain activities are in compliance with the lobbying laws of nonprofits.
Myth #3: Nonprofits can’t get involved in public policy
Although nonprofits can’t influence legislation, they can still participate in public policy discussions if they are focused on educating the public. This is because legislation and public policy are interrelated. However, since lobbying can affect a nonprofit’s tax-exempt status, the organization’s involvement must be restricted.