Lobbying and other forms of advocacy are important for nonprofits because it allows them to spread awareness for their cause and gain the attention of politicians who have the ability to give out grants. Something as simple as sending letters to Congressmen can lead to nonprofits acquiring funds because it keeps that nonprofit’s name in the minds of Congressmen when they are deciding who should receive grants. If nonprofits would rather speak directly to a politician, they can try to make an appointment. During meetings, leaders of nonprofits must use their time wisely and try to make a good first impression. Legislators often have a busy schedule, so it is important that representatives of a nonprofit enter the meeting room prepared to speak about the their nonprofit while focusing on the best arguments for why they need the legislator’s support. At the end of the meeting, members of the nonprofit should be polite and then leave fact sheets, pamphlets, or other tangible resources that the legislator can review at a later time.
Although lobbying can be an important tool for nonprofits, it is necessary that they follow certain rules in order to stay tax-exempt. One major restriction placed on nonprofits is that they cannot lobby in support of an individual politician or specific piece of legislation. However, if called upon to speak in front of Congress concerning specific legislation, then individuals from a nonprofit are allowed to give their opinion. Congress sometimes ask leaders from nonprofits to deliver testimonies because those leaders can often provide a unique perspective on the issue being discussed.
The federal government has placed limits on how much money a nonprofit can spend on lobbying if it wishes to stay tax-exempt. Congress has established something called the “substantial part test,” which says nonprofits cannot spent a substantial part of their funds on lobbying efforts. Unfortunately, Congress did not clearly define what is considered “substantial.” This has led to confusion among nonprofits when they are trying to decide how much they can spend on lobbying. Nonprofits may choose to avoid the substantial part test by filing a 501(H) election and then submitting Form 5768 to the IRS. The 501(H) election provides nonprofits with definite information on limits to lobbying.
Leaders of nonprofits should carefully study lobbying regulations, and then develop a strategic plan to make every dollar count. Lobbying can be an extremely successful tool, but nonprofits should consider what type of lobbying best fits their organization. Not every type of nonprofit should lobby in the same manner. Different approaches should be taken depending on the type of nonprofit and the size of its budget. Developing the perfect plan for lobbying may take a great amount of effort and time, but the end result is generally worth it.