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Advocacy: What Foundations Can and Can’t Do

Writer: Jeff Poulos
Jeff Poulos
Oct 13
3 min read

I recently helped a foundation board think through its role in advocacy, from funding grantees’ advocacy, coalition building and convening, to taking on advocacy themselves, such as publishing op-eds and asking board members to use their networks to educate policymakers.


The conversation reminded me how much misinformation there is in the foundation community about what foundations can and can’t do. That confusion breeds fear of doing something illegal, and the fear too often leads to inaction. My advice: don’t let it paralyze you, especially now, when policies are changing at breakneck speed and communities are facing new vulnerabilities.


Here is a general reminder of the rules. It is written with private foundations in mind, since they face the tightest limits; community foundations and other public charities have more room (see “What you can’t do” below). As always, consult an attorney about your specific situation.


Start with the definition of lobbying

Advocacy is broad; lobbying is a narrow slice of it. Under federal tax law, lobbying means either (1) communicating with a legislator or legislative staff about specific legislation and expressing a view on it, or (2) urging the public to contact legislators about specific legislation (a “call to action”).


What you can do

Educate

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Educate the public, elected officials and policymakers about issues relevant to your mission: share research, issue policy analyses, and meet with legislators about your work and the needs you see in your community.

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Discuss broad social and economic problems, even ones that are the subject of pending legislation, as long as you don’t refer to and take a position on specific legislation.

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Publish nonpartisan analysis as long as it gives a full and fair presentation of the facts, is made widely available, and doesn’t urge readers to contact legislators.

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Provide testimony or technical advice to a legislative body in response to its written request. Requests must come from the committee or body itself, not from an individual legislator.

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Convene nonprofits, community members and policymakers.

Fund and support grantees who advocate, including those who lobby

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Make general operating grants, even to organizations that lobby, as long as the grant isn’t earmarked for lobbying.

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Make project grants for projects that include lobbying, as long as your grant doesn’t exceed the portion of the project budget that goes to non-lobbying activities.

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Help grantees build relationships with legislators and build their advocacy capacity, including training on how to lobby within the rules.

Advocate with executive and administrative bodies

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Advocacy aimed at executive, judicial and administrative bodies isn’t lobbying. That includes commenting on proposed regulations, meeting with officials about how a law is being carried out, and weighing in before school boards, housing authorities, zoning boards and other special-purpose bodies.

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One caution: Local ordinances count as legislation, so the lobbying limits apply to them. State and local lobbying disclosure laws also have their own definitions and may require registration even when the federal tax rules don’t treat an activity as lobbying.

Engage in litigation

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Sign on to amicus briefs, or fund litigation to challenge or enforce laws.

Self-defense

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You may lobby on legislation that would affect your foundation’s existence (including its powers and duties, tax-exempt status, or the deductibility of contributions to it). The exception doesn’t reach legislation that affects your issue area or your grantees’ funding; supporting grantees’ own advocacy is the route there.

What you can’t do

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Lobby (private foundations). Spending on lobbying, including earmarking grant dollars for a grantee’s lobbying or advocating on a ballot measure, is a taxable expenditure that triggers excise taxes on the foundation and can reach foundation managers who approve it. Public charities, including community foundations, can lobby within limits, measured either by the “insubstantial part” test or by the more predictable dollar limits available through the 501(h) election.

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Engage in partisan political activity (all foundations and public charities). Every 501(c)(3) is prohibited from supporting or opposing candidates for public office: no endorsements, no campaign contributions, and no communications that favor or oppose a candidate. Recent litigation over houses of worship endorsing candidates doesn’t change these rules for foundations.

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