1. Funding Advocacy: What’s Legal, What Works 11 Dupont Circle, NW 2 nd Floor Washington, DC 20036 202-822-6070 www.allianceforjustice.org May 8, 2003

2. We all understand that foundations are feeling the pinch, but it’s more important in tough times than in easy times to support advocacy work, because very hard decisions have to be made in tough times. Marcia Avner, Public Policy Director Minnesota Council of Nonprofits

3. Examples of Advocacy

4. Foundations Can:  Research, educate, and lobby in certain cases  Convene meetings of nonprofits & funders around issues  Depending on content, submit op-eds or letters to the editor  Develop advertising campaigns  Talk to the media  Testify before the legislature in certain cases

5. Research – W.K. Kellogg Foundation

6. (2001) Let's Fix This, a public information campaign to raise awareness of homelessness among Minnesota's children. Convene Meetings – The Minneapolis Foundation The Minneapolis Foundation engaged the community and seek solutions to this alarming crisis.

7. Proposition 188 would have “regulated” smoking in public spaces. The ads revealed who supported the proposition (Phillip Morris, R.J. Reynolds Tobacco Co., Brown & Williams) and who opposed it (American Cancer Society, American Lung Association of California, American Heart Association, California Dental and Medical Associations). Proposition 188 was defeated. Ad Campaigns – California Wellness Foundation

8. Congressional Testimony John, Sir Elton, chairman, Elton John AIDS Foundation, CA

9. PublicPrivate Foundation - Limitations Lobbying  Limited  Taxable Expenditure Electoral Activities  No partisan electioneering  Special voter registration rules

10. Direct & Grassroots Lobbying Direct Lobbying Call to Action About Specific Legislation Expressing a View General Public Legislator Communication Grassroots Lobbying Communication About Specific Legislation (Includes public for ballot measures)

11. Legislators 26 C.F.R. § 56.4911-2(b)(1)(i)(A) State Local Federal Representatives and their staff Members of Congress State Assembly Members City Council Members

12. Ballot Measures Work on:  ballot initiatives  referenda  constitutional amendments  bond measures Members of the general public vote directly on these legislative actions, therefore they are treated as LEGISLATORS LOBBYING

13. Default Test  Lobbying must be an “insubstantial part” of overall activities  Includes cost-free activities Lobbying Limits 501(h) Expenditure Test  Clear dollar-based limits ($1 million cap)  Clear definition of lobbying  Must elect with Form 5768 Private foundations cannot elect

14. Sample 501(c)(3) making the 501(h) election with $2 million budget TOTAL LOBBYING $250,000 Grassroots Total: 25% X 250,000 = $62,500 20% x $500,000 = $100,000 15% x $500,000 = $ 75,000 10% x $500,000 = $ 50,000 5% x $500,000 = $ 25,000 Calculating Lobbying Limits

15. Lobbying Exceptions

16. Nonpartisan Analysis, Study, or Research  Full and fair discussion of the issue  Broadly disseminated  Can express a view and have indirect call to action

17.  Request must be in writing  Made by a government body, committee, subdivision Technical Advice or Assistance

18. Communication about legislation that might affect the foundation’s:  Powers and duties  Tax-exempt status  Deduction of contribution to the foundation DEFENSIVE USE “Increase payout” PROACTIVE USE Repeal of excise tax on private foundation investment income Self Defense

19. Examinations and Discussions of Broad Social, Economic, and Similar Problems

20. Public and private foundations can fund advocacy. Private foundations cannot earmark grants for lobbying, without incurring a taxable expenditure. FUNDING ADVOCACY

21. EARMARKING: Give pursuant to an agreement, oral or written, that the grant will be used for specific purposes

22. Private Foundation Safe Harbors The tax code includes rules specifically for general support and project grants from private foundation grants to support advocacy

23. General Support Grants General Support Grants to 501(c)(3)’s Most Support Budget review not required Grant is NOT a taxable expenditure even if used to lobby

24. Specific Project Grants Private Foundation: Project Grants to 501(c)(3)’s Grant amount may not exceed non-lobbying expenditures in budget

25. $100,000 Single Year Project Budget Specific Project Grant from Private Foundation #1 $50,000 Specific Project Grant from Private Foundation #2 $50,000 $50,000 < $60,000 No taxable expenditure $50,000 < $60,000 No taxable expenditure

26. Grant Agreements

27. Clauses that restrict the use of grant funds for lobbying are unnecessary in grants to public charities WARNING: Does your grant agreement contain the following language: No portion of this grant shall be used to carry on propaganda, or otherwise to attempt, to influence legislation, the outcome of any public election…

28. Talk to your officers, directors, trustees and staff about supporting public policy advocacy. MAKE YOUR CASE  Lobbying is legal  Anything that compromises grantees’ efforts to influence public policy diminishes their capacity to contribute to society

29. Consider:  The type and mix of advocacy you want to support  Communications that convey the foundation’s goals (RFPs, website, annual reports) DEFINE YOUR ADVOCACY GOALS

30.  Review grant agreements for restrictions  Make advocacy resources available to grantees  Take leadership on your issues (convene, research, collaborate, educate) RECOGNIZE ADVOCACY OPPORTUNITIES

31. Build Relationships Collaboratives can be more effective than going it alone. Sheltering Arms Foundation (MN):  Identify partners who have specific expertise and can keep on top of issues on a daily basis.  Seek opportunities to align the Foundation with larger nonprofit or advocacy coalitions that have the capacity to reach and mobilize many people and organizations.  Consult with other foundations that have expertise and find out what’s worked from their experience.

32. TAKE RISKS There is more risk in doing nothing.  Potential impact on the community/society  Strengths and weaknesses of the organization  Overall level of risk vs. return Risk Evaluation Criteria:

33.  Ask about experience representing foundations/nonprofits  Experience representing foundations/nonprofits that fund or engage in lobbying  Opinion on the appropriateness of such activities ASK AN ATTORNEY

34.  We can train your staff, board, grantees  Provide technical assistance  Provide easy to understand print resources CONTACT THE ALLIANCE FOR JUSTICE