Yes (except for private foundations under most circumstances).
There are two sets of rules, and with the exception of churches, public charities can choose which set to follow. One rule is that no substantial part of the organization’s activities can be lobbying. The alternative rule, that an organization must affirmatively elect, provides for sliding scales (up to $1,000,000 on total lobbying and up to $250,000 on grass roots lobbying) that can be spent on lobbying. (The scales are based on a percentage of the organization’s exempt purpose expenditures.)
Organizations covered by the “no substantial part” rule are not subject to any specific dollar-base limitation. However, few definitions exist under this standard as to what activities constitute lobbying, and difficult-to-value factors, such as volunteer time, are involved.
Organizations seeking clear and more definite rules covering this area may wish to avail themselves of the election. By electing the optional sliding scale, an organization can take advantage of specific, narrow definitions of lobbying and clear dollar-based safe harbors that generally permit significantly more lobbying than the “no substantial part” rule. However, as noted above, there are ceilings (unadjusted for inflation) on the amount of funds that can be spent on lobbying. Thus, these dollar limits should be considered when making the election.
The organization files a simple, one-page Form 5768 with the Internal Revenue Service. The election only needs to be made once. It can be revoked by filing a second Form 5768, noting the revocation.
No. The Internal Revenue Manual specifically informs our examination personnel that making the election will not be a basis for initiating an examination.
Yes. However, while it is not a matter of federal tax law, it should be noted that charities should be careful not to use federal grant funds for lobbying except where authorized to do so.
Yes, so long as the grants are not earmarked for lobbying and are either (1) general purpose grants, or (2) specific project grants that meet the requirements of section 53.4945?2(d)(6) of the Foundation Excise Tax Regulations.
Yes. However, organizations should be careful that their voter education efforts do not constitute support or opposition to any candidate.
Yes. Charities should be careful, however, to avoid any reference to the reelection campaign in their lobbying efforts.