Nonprofit lobbying: Public charities have more influence than they think

Public charities are legally allowed to lobby for their cause, which the IRS defines as “attempting to influence legislation.” And yet, when you ask a nonprofit leader whether their organization engages in lobbying, you’ll likely hear: “We can’t do that—we’d lose our tax-exempt status.” It’s a persistent myth—not only among the public but in the sector.

Survey research by Independent Sector found that fewer public charities had a clear understanding of permissible policy advocacy and lobbying activities in 2022 than in 2000. In 2000, 54% of public charities knew they had the right to support or oppose legislation; in 2022, only 32% did.¹

Federal laws haven’t changed. Nonprofits may have forgotten—or never learned—what they’re legally allowed to do.

Nonprofit lobbying”: What it is and what it isn’t

What public charities can do

The IRS distinguishes between two types of lobbying:

• Direct lobbying: communicating directly with legislators about a bill, whether it’s a face-to-face meeting or calling their office to ask them to support or oppose a bill.
• Grassroots lobbying: attempting to influence public opinion about legislation, like running a social media campaign urging followers to contact representatives about a pending bill.

Public charities have a right to engage in both types of activities, within limits. (States may have different lobbying definitions and rules.)

Lobbying is one specific form of policy advocacy. Public charities also have broad leeway to raise public awareness of and discuss issues affecting their communities, host educational forums, share expertise with policy makers, and help nonpartisan get-out-the-vote efforts—activities that don’t necessarily constitute lobbying.

What public charities cannot do

Lobbying isn’t the same as supporting a political candidate or party. That’s a separate category of activity, and public charities absolutely may not engage in campaign activity for or against any candidate or party.

The IRS states that lobbying cannot be a “substantial part” of a charity’s activities, but the definition of “substantial” is vague. For organizations concerned about exceeding this limit, the IRS provides an alternative—the 501(h) election—that sets clear spending limits on lobbying.

Alliance for Justice has published a helpful guide to help public charities understand federal laws governing nonprofit lobbying activities. Organizations should also consult a nonprofit attorney to ensure they stay within legal boundaries.

What do we know about public charities that report policy advocacy and lobbying activities?

Lobbying is concentrated among a relatively small group of organizations. According to Independent Sector’s analysis of Form 990 filings by public charities in 2023, fewer than 3% reported lobbying. Environmental and health organizations appeared the most politically engaged; arts and culture, religious, and international organizations were least so.

Larger public charities are more likely to engage in policy advocacy and lobbying. Large organizations were also more likely to understand the rules of what’s permissible. According to the survey, smaller organizations were least likely to know they’re legally allowed to take public policy positions (33%) or formally lobby for or against legislation (24%). By contrast, organizations with budgets of $10 million and above were most knowledgeable (70% and 50%).

The authors conclude that most nonprofits are “excluded from the policy process, either through their lack of knowledge or from other factors related to being smaller in size.” This makes sense, as lobbying requires staff time, legal awareness, and often ongoing relationships with policy makers—resources that smaller organizations are less likely to have.

Why nonprofit lobbying matters

When organizations in Independent Sector’s survey were asked why they don’t engage in advocacy and/or lobbying, 56% said policy engagement isn’t applicable to their mission. But advocating for policy change may do more to advance that mission than direct service alone.

Consider food banks: advocating for the Supplemental Nutrition Assistance Program (SNAP) is directly aligned with a mission to reduce hunger, and a single piece of legislation can reach far more people than any number of food boxes a local organization can distribute. History bears this out—advances in civil rights, disability rights, and environmental protection required not just increased services but policy changes.

The nonprofit sector has had a meaningful policy impact in recent years, successfully mobilizing on federal actions and state-level measures. At the same time, multiple levels of government (the executive branch, Congress, state attorneys) are intensifying scrutiny of nonprofits, which contributes to a chilling effect that can inhibit organizations from exercising their legal right to advocate and lobby.

But for nonprofits committed to creating lasting social change, lobbying is not a distraction from the mission—it may in fact be what’s needed to achieve the mission.

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1. Researchers note that the two surveys had different sampling approaches, with the 2020 survey over-sampling lobbying public charities. ↩︎