What Is Allowed within a 501(c)(3) Charitable Organization
Written by Thomas Raffa
Those of us working within the nonprofit community, and particularly in or with 501(c)(3) public charities, recognize advocacy as a vital part of our mission. However, many of us get caught up in the delivery of services and may spend very little time advocating for the very systemic changes that could reduce the extensive need for the services we deliver. I am certain that we can agree that there may be no better spokespersons for the sick and elderly than those who commit themselves to nursing home service and hospice care. And who are more qualified to testify to successful rehabilitation methods than those who counsel in local drug clinics?
However, in my daily practice, I have come to recognize that time and money are not the only causes for a limited advocacy program. Often, it is a lack of understanding about what one can and cannot do when your public charity gets involved as an advocate in the public policy arena. There is confusion as to the distinctions between advocacy and lobbying, limited knowledge of the related lobbying regulations, and a resulting uninformed concern over losing one’s tax-exempt status.
While it is true that a public charity under the Internal Revenue Code Section 501(c)(3) is not allowed to take part in a political campaign on behalf of any candidate for public office, there are no such restrictions on cause-related advocacy. In fact, even lobbying can be undertaken by a public charity without any risk to its tax-exemption so long as these efforts are not a substantial part of its activities.