Nonprofit Lobbying: File the 501(h) Election!

Have you ever heard, "We can’t do that -- nonprofits can’t lobby!"
That is incorrect - and a myth that we hear all too frequently at state and national level. The National Council of Nonprofits has written an easy-to-read guide that provides nonprofits, board members, and the public with the legal basis for why charitable nonprofits can engage in advocacy. Read more about nonprofit advocacy- it’s legal, it’s needed, and it’s easy.

Most Nonprofit Public Charities that do any amount of lobbying should file IRS form 501(h). Here's why:
By filing one simple form, IRS Form 5768, a charitable nonprofit can protect itself from penalties for engaging in "too much" lobbying. (Charitable nonprofits can lobby; read why lobbying is legal.) A charitable nonprofit can only spend an insubstantial amount of its activities on lobbying. But there is a hazy ill-defined line between what "activities" are considered "substantial" and which are "insubstantial."

By filing IRS Form 5768 (also referred to as "taking the 501(h) election") instead of being judged by the uncertain “substantial part” test that evaluates undefined "activities" -- your nonprofit will have the added protection of being evaluated with a more specific test called the “expenditure” test that offers a bright line based on how much money the nonprofit spends on its lobbying activities. Read all about the advantages of taking the 501(h) election on the National Council’s website.

**Note: Private foundations, churches, and integrated auxiliaries of churches are not permitted to file the 501(h) election.