Did you know that:
1. Public charities may use private foundation general purpose grant funds for lobbying?
2. A private foundation may make a grant to a public charity to support a project that includes lobbying– as long as its own grant is less than the amount budgeted for the non-lobbying part of the project– and the grant is not earmarked for lobbying?
3. Community foundations may make grants to public charities that are earmarked for lobbying?
4. Foundations may fund a number of activities that are not considered lobbying under the 1976 lobby law but affect public policy.
In short, there is considerably more latitude to use foundation funds to lobby than is commonly understood by many foundations and public charities. Following is more information.
1. Using private foundation general purpose grant funds for lobbying. Charities are not disqualified from lobbying because they receive foundation funds, but charities and, even more, foundations have been slow to recognize and act on this fact. While grant funds from a private foundation to a charity must not be earmarked for lobbying, it is perfectly legal for the charity to use unearmarked general support foundation funds to lobby. Foundation funds are considered to be earmarked only if there has been an oral or written agreement that the grant will be used for specific purposes.
2. Using private foundation funds for the nonlobbying portion of a specific project. A private foundation may make an unearmarked grant to support a specific project that includes lobbying, as long as its own grant is less than the amount budgeted for the nonlobbying parts of the project and the grant is not earmarked for lobbying. For example, if a specific project has a $200,000 budget, of which $20,000 is to be spent on lobbying, the private foundation can give the project up to $180,000 because that part of the project budget is allocated to nonlobbying uses.
3. Receiving community foundation funds that are earmarked for lobbying. Community foundations are tax exempt under section 501(c)(3) of the Internal Revenue Code and are not treated as private foundations so they are permitted the same lobbying latitude as public charities. For example, a community foundation that has elected to come under the 1976 lobby law may spend part of their annual expenditures on lobbying. It may also grant earmarked funds to a charity for lobbying up to the limits permitted by law. A community foundation grant, earmarked for lobbying, would count against the community foundation’s own lobbying ceiling.
4. Foundation funding of activities that are not lobbying but are related to public policy. There are eight public policy related activities that charities may conduct which are not considered lobbying under the 1976 lobby law and therefore can be fully funded by foundations. For example, a charity’s response to written requests from a legislative body (not just a single legislator) for technical advice on pending legislation is not considered lobbying.
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The foregoing information is for general guidance and is not intended to replace legal counsel. Additional information is available from the Charity Lobbying in the Public Interest website at www.clpi.org or Charity Lobbying in the Public Interest, 2040 S Street, NW, Washington, DC 20009, telephone – 202/387-5048.