If you want to know about the stock market, you ask a broker. If you want to know what that weird noise is when you turn on your car, you ask a mechanic. If you want to know how public policy is affecting regular people in Oklahoma, you ask someone who works for a non-profit organization.
Unfortunately, many non-profits remain hesitant about sharing their expertise with lawmakers and the public. They may believe that their non-profit status prohibits them from engaging with the legislative process, or they may simply not know what the rules are so they are hesitant about entering a poorly understood legal grey area.
In fact, non-profits can (and should) lobby. According to the National Council of non-profits, “Federal tax laws already allow every charitable non-profit to engage in some legislative lobbying activities. There are spending limits and technicalities that curb non-profits from spending all of their time and money engaged in legislative lobbying, but knowing your rights ensures your organization’s participation in the public policy process.”
There are two standards by which 501(c)(3) organizations can measure lobbying expenditures. The first is the “insubstantial part test,” which requires that “no substantial part of a charity’s activities…be carrying on propaganda or otherwise attempting to influence legislation.” This standard can be difficult to define, but federal courts have held that as much as 5 percent of an organization’s “time and effort” are an insubstantial part of their overall activities, and that 5 percent benchmark is shared by most tax experts.
For non-profits who still want more certainty about lobbying limits, the IRS has created the 501(h) option. Under the 501(h) option, non-profits are permitted to represent their interests to elected officials and engage in direct and grassroots lobbying up to a determined percentage of their annual expenditures. For example, organizations with annual expenditures of less than $500,000 have an overall lobbying limit of 20 percent of their total annual expenditures. For more specific information about limits, you can download a lobbying limit calculator here. Organizations must choose to elect the 501(h) option by filing form 5768 with the IRS. You can read more about electing the 501(h) option in this report from bolderadvocacy.org.
“The Legislature will have to make hard choices to close the shortfall, and plenty of wealthy special interests are lobbying to make sure the hard choices don’t come at their expense. But far fewer lobbyists are representing the needs of regular Oklahomans.”
Unfortunately being underfunded and understaffed is a constant reality for many non-profits. Their resources are spread thin enough just trying to accomplish their mission, without adding the extra burden of representing their perspective to legislators who seem far removed from their situation. However, for missions to truly be accomplished and for true change to take place, non-profits must realize legislative advocacy as an integral part of their mission. Legislative lobbying is as important as understanding the policies that directly affect a non-profit’s mission.
Non-profits engaging in the legislative process also benefits legislators, taxpayers, and the people of Oklahoma. Non-profits bring valuable expertise to help legislators craft effective policy — non-profit staff work on the front-lines of many important policy issues and see first-hand what policies are working and what are inefficient. They also know which policies would make their jobs easier and benefit the Oklahomans most in need of help.
Non-profits are used to using their resources wisely, especially in a state like Oklahoma where needs are high and many non-profits are being stretched to capacity. It’s crucial that non-profits use all the tools available to them to accomplish their mission. Lobbying and legislative advocacy should be one of the tools non-profits become very familiar with. And at a time when Oklahoma faces a massive budget shortfall, engagement by non-profits is more important than ever. The Legislature will have to make hard choices to close the shortfall, and plenty of wealthy special interests are lobbying to make sure the hard choices don’t come at their expense. But far fewer lobbyists are representing the needs of regular Oklahomans.
It’s time to use the tools we have in our democracy to demand fair and accurate representation. The voices of non-profits are crucial in crafting just and balanced public policy. Non-profits, it’s time to speak up and start informing policy decisions by engaging legislation that affects our state.