Can Nonprofits that Receive Federal Grants Lobby?
Lobbying by nonprofits is perfectly legal and supported by IRS regulations. There are several categories of nonprofits, including those exempt under 501(c)(3) (charitable, scientific, educational groups) and 501(c)(4) (social welfare or action groups). 501(c)(4)s have no limit on the amount of lobbying they can conduct. Under IRS regulations, 501(c)(3)s do have limitations. 501(c)(3) groups can choose between two sets of guidelines for measuring lobbying: a measure based purely on expenditures, and a general “insubstantial” test. The expenditure test is generally more favorable to nonprofit advocacy. These guidelines are set out under the Internal Revenue Code, Sections 501(h) and 4911. Under the expenditure test, lobbying only occurs when there is an expenditure of money. 501(c)(3)s that choose to be covered by the expenditure test can spend up to 20% of their exempt purpose budget, up to million, on legislative lobbying. (see the sliding scale below). Only 25% of this total lobbying
