What’s Permissible: Foundation, Advocacy, and the Law: The Basic Rules for Foundations

Organizations designated as private foundations are free to express opinions on public issues, inform people (including lawmakers) about public problems and possible solutions, and mobilize constituencies around principles they believe in. But the Tax Code does not permit them to lobby — that is, under most circumstances they may not spend their money and other resources to advocate for or against any specific piece of pending legislation (exceptions do apply).

Public charities have more freedom to lobby, and to fund lobbying, within limits spelled out in the Tax Code. Most community foundations, for example, are organized as public charities under Section 501(c)(3) and therefore can engage in a certain amount of lobbying in their own right, or expressly support such lobbying to some extent by their grantees. Organizations designated as social welfare organizations have the widest latitude to intervene directly in political and legislative activity.

A rough general rule is: If there’s no legislation, then you’re not lobbying. In the eyes of the law, there is a big distinction between “Preserve the Rainforest” and “Support the Rainforest Preservation Bill.” The latter is lobbying, and severely restricted. The former is fair game.

Private foundations are not permitted to lobby, nor are they permitted to make grants that support lobbying activities by others. Nonetheless, private foundations are permitted to support grantees that lobby. In fact, foundations need not forbid their grantees from using grant funds for lobbying, given a few safeguards:

  • The grant does not expressly support lobbying
  • The support is not (and does not appear to be) “earmarked” by the terms of the grant for lobbying activities
  • The amount of the grant is not greater than the whole non-lobbying portion of the project budget

Takeaways are critical, bite-sized resources either excerpted from our guides or written by GrantCraft using the guide's research data or themes post-publication. Attribution is given if the takeaway is a quotation.

This takeaway was derived from Advocacy Funding.


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