Top Ten Spending Lobbyist Groups of 2015 Spent $64 Million in the First Quarter

Review of the business analytics

In 2015, the top ten lobbyist groups spent millions of dollars to influence political parties, polices, and legislation before the House and Senate. Combined, these groups invested $64 million, in the first quarter of 2015 alone, to attempt to sway people’s opinions in favor of their views and objectives, and included these organizations:

  • The U.S Chamber of Congress
  • The Institute of Legal Reform
  • National Association of Realtors
  • The American Medical Association
  • Google
  • General Electric
  • American Electric Power Company
  • The Pharmaceutical Researchers and Manufacturers of America
  • The National Association of Broadcasters
  • The American Hospital Association

Together, the U.S Chamber of Congress and the Institute of Legal Reform spend 19.5 million on lobbying efforts directed toward the White House and Congress on influencing environmental regulation, copyright laws, and free trade agreements, with some success. Their efforts helped to move along the Trans-Pacific Partnership.

The National Association of Realtors invested $7.7 million to lobby for the Mortgage Choice Act to reduce the regulations on mortgage lenders, as well as on flood insurance premium issues. Their efforts helped get the Mortgage Choice Act approved in the House of Representatives.

The American Medical Association spent $6.7 million on lobbying, with success in both the House and Senate, in efforts to fix a flaw with the Medicare payment system. Both Congressional Parties voted on resolutions to permanently resolve issues with the payment system.

Google only recently entered the list of top spending lobbyists in 2015, by investing $5.5 million to protect against antitrust litigation, as well as patent issues to further support their efforts in the development of self-driving vehicles and drones.

General Electric spent $4.8 million, while American Electric Power Company spent $4.7 million on lobbying to protect their markets against the growing solar industry. Utility and energy equipment manufacturers are typically top spenders for lobbying on topics that are vital to their continued growth.

Part of the reason for the increase in spending in 2015, over 2014, was largely due to the Republican-controlled House and Senate. Lobbyist efforts by these and other groups are aimed at attempting to get bills passed or given a second look, which under a Democratic-controlled House and Senate would not necessarily have had a chance of passing.

Lobbying Firms

Whenever there is a shift in the political leadership in the House and Senate, it typically requires tailoring lobbying efforts toward the group currently in power and influencing their viewpoints on various topics of interest to lobbyist groups. Depending on the results of the November 2016 election, there again could be a shift in leadership, which would result in lobbyists having to determine exactly how much to invest in 2017.

Even though these leading groups are some of the top investors in lobbying efforts, it does not mean smaller businesses and organizations cannot help shape and influence legislation with the right assistance from qualified DC lobbying firms, like Lobbyit. Contact us at 202-587-2736 to learn more about how we can help your organization have the representation it needs in Washington today.

 

Source:

The Growth of Young Lobbyists in Politics

Businesswoman Delivering Presentation At Conference

As the older generation of lobbyists is retiring, there is a growing number of younger people from the Millennia generation shaping the future of Washington lobbyists. In the past, lobbyists spent time developing and cultivating relationships inside the legislature offices. These relationships are critical to attempting to sway politicians’ opinions to that of the lobbyist, and to gain support for their issues and/or causes.

However, today, largely in part of advances in technology, the Internet, and social media, younger lobbyists no longer have to spend the long hours indoors. Rather, they can utilize social media sites, such as Facebook, LinkedIn, and Twitter to foster and develop virtual relationships with politicians and the politician’s staffers. As such, it allows them to change how lobbying is conducted and how it influences political outcomes of legislation.

Social media has become an essential tool for lobbying efforts. Lobbyists no longer have to meet face-to-face with politicians and other advocacy groups to influence and sway their opinions. They can post updates to Facebook and Twitter, grow their network of connections through LinkedIn, and more. Thanks to the Internet and social media, young lobbyists are able to multitask and accomplish more in less time than in the past, while also relying upon others to re-post and share content.

How to Become a Lobbyist

Another major shift for younger lobbyists concerns the steps they take when they want to become a lobbyist. In the past, the baby boomer lobbyists simply started working in the public service sector right out of college as a legislative aide, to develop their skills as an effective lobbyist, and then went on to become a lobbyist right away.

This is no longer the case. An underlying cause for this change has to do with the mandatory two-year lobbying ban regulation. After working as a legislative staffer, or other such position in the public sector, potential lobbyists must wait two years and spend this time working in the private sector before they can start lobbying or working for DC lobbying firms.

As such, more and more Millennial lobbyists are establishing careers in relevant private sector positions, to develop various skills vital to being persuasive lobbyists and to avoid the two-year ban altogether. Typical career paths aspiring lobbyists are taking include becoming lawyers, government analysts, and public speakers.

Working man and woman in the officeWhile they are working in the private sector, they start participating in lobbying internships and other such programs to gain further experience. It is during this time they start to foster and build relationships with other lobbyists and politicians. Once they have completed their internship, they formally register as a professional lobbyist and continue expanding their network of relationships.

Lobbyists today do much more than communicate with politicians the issues and causes of their clients. They must be able to not only be persuasive, but also analyze the impacts of legislature, and the impacts it will have for their clients. For nonprofits and business organizations, it is in your best interests to have lobbyists on your side. Otherwise, you have no control over what decisions are being made by Congress.

Call Lobbyit at 202-587-2736 now to discover how we can help your nonprofit or business and provide the representation you need in Washington.

The Function of Lobbyists/Lobbying Firms in the Political System

print of US Constitution

Washington DC lobbyists provide essential services to help influence the political decisions being made in the legislative branch of the government. They work on behalf of nonprofits and other organizations to voice their concerns to Congress about legislation and how it affects their cause or issue. Lobbyists have a deep understanding of how the federal government works, as well as the rules, regulations, and laws imposed on lobbyists.

Lobbying first came about from the language within the First Amendment of the U.S. Constitution, which states, the “right of people to petition the government.” As such, lobbyists started advocating and lobbying on behalf of constituents, the general public, businesses, and nonprofit organizations, and trying to influence legislation within Congress.

By 1876, all lobbyists were required to register with Congress and, since 1995, are required to disclose and report their activities to the government, as a means to determine the extent of their involvement in specific pieces of legislation, and to ensure they are adhering to both state and federal lobbying regulations and laws.

Using Social Media for Advocacy and Lobbying

Lobbying and advocating are two different processes people tend to get confused, because they are related, but they involve different functions and tasks. In a previous blog post, we discussed the difference between these two functions in greater detail, but will now provide a brief review, as follows:

  • Advocacy is arguing in favor of a cause or issue. Anyone can advocate for any number of causes or issues they support. It is not uncommon to use social media to spread the word and educate people about a particular issue or cause.
  • Lobbying, on the other hand, is attempting to sway the influence of a public official or politician on a cause/issue, and could involve both direct and grassroots lobbying. Requesting a member of Congress to introduce, amend, or vote for or against a particular piece of legislation are all good examples of lobbying.

function of lobbyists in politicsSocial media can be used for both advocacy and lobbying functions, and it is easier and more effective than traditional methods. Twitter and Facebook are two of the more widely used social media sites. The key to using social media effectively depends upon whether you are advocating or lobbying, and the tips below can be applied to either situation:

  • Remain Professional
  • Stay on Topic
  • Avoid Introducing New Topics in Comments about a Different Topic
  • Share Relevant Articles in Moderation
  • Avoid the Overuse of Tagging and Hashtags in Posts
  • Review the Timeline of Public Officials/Politicians before Tweeting/Tagging
  • Search for Hashtags to See What Others Are Saying
  • Remind Legislators How You Want Them to Vote
  • Thank Legislators That Voted Your Way on the Issue/Cause

Navigating the complexities of advocacy and lobbying, and related activities, can seem overwhelming for nonprofit organizations and smaller organizations. Fortunately, Lobby It has made numerous accomplishments for those who were previously under-represented in Washington DC.

We offer a low, basic monthly fee, and other customizable solutions, to help organizations and business of all sizes achieve their advocacy and lobbying objectives. Contact Lobbyit at 202-587-2736 today to speak to a representative and learn how they could help your business or organization.

 

Advocacy vs. Lobbying: Understanding the Difference

Advocacy definition

 

In our last post we explored the difference between grassroots and direct lobbying. In this post we’ll uncover the differences between advocacy and lobbying. The lines can easily become blurred between advocacy and lobbying (especially grassroots lobbying), making it important to distinguish between the two. Let’s look at the differences in detail:

What Is Advocacy?

Advocacy is generally defined as arguing in favor of a cause or idea, whether it’s environmental protection, minority rights, or the myriad other issues that affect people every day. There is no limit to the amount of advocacy a person or organization (such as a nonprofit) can do.

What Is Lobbying?

Lobbying can generally be defined as any attempt to influence a politician or public official on an issue. Lobbying is further broken down into:

  • Direct lobbying: Any attempt to influence new or existing legislation via communication with a member of the legislative body or other government representative who has a say in the legislation.
  • Grassroots lobbying: Asking the general public to contact their legislator and/or mobilizing the public around a legislative issue. Organizations, such as nonprofits, cannot ask their members to contact their legislators or government agencies regarding the legislation, though, as this is considered direct lobbying. Examples of grassroots lobbying include creating an online petition to generate public support for a cause, distributing flyers, and organizing a public demonstration or rally.

Nonprofit organizations can engage in some lobbying without having to register; however, the IRS has strict rules about what portion of an organization’s budget can go toward lobbying activities, and federal funds cannot be used for lobbying.

Examples of Advocacy vs. Lobbying

Advocacy

  • Telling a member of Congress how a policy affects constituents
  • Using social media to get the word out about a cause/issue
  • Meeting with a government official to explain how a particular problem/issue is affecting a particular group or organization, the environment, etc.

Lobbying

  • Asking your member of Congress to vote for or against, or to amend or introduce, particular legislation
  • Emailing members of your group asking them to contact their member of Congress in support of or opposition to legislation or pending regulations
  • Generating an online petition asking members of your organization (direct lobbying) or members of the public (grassroots lobbying) to contact their legislator(s) to support or oppose particular legislation

 

lobbyists in DCWho Can Advocate?

Anyone can engage in advocacy. Educating policymakers about the needs of your organization or community is something anyone can do. You can advocate by organizing supporters on important issues and encouraging them to email or call their elected officials, using social media to educate people about issues/causes, and meeting with elected officials to let them know in person how an issue is affecting the community/organization.

Keep in mind that asking elected officials to support or introduce legislation crosses the line into lobbying. Sometimes advocacy alone isn’t enough, and legislation is necessary to fully address an issue or problem—this is where an experienced DC lobbyist can be a huge help. The expert lobbyists at Lobbyit have been helping small and mid-size organizations establish their voice on Capitol Hill for years. We offer competitively-priced lobbying packages for organizations of every size.

Direct vs. Grassroots Lobbying

lobbying at an event

Why Grassroots Lobbying is Important and How It Differs from Direct Lobbying

The differences between grassroots and direct lobbying can seem subtle at first. Both are effective at influencing public policy, but the means by which they achieve that goal are different. Here’s how:

  • Grassroots lobbying involves the mass mobilization of the public around a legislative issue—whether it’s getting certain a certain poison banned or posing harsher penalties for drunk drivers. Grassroots lobbyists ask the general public to contact their legislators and other officials regarding an issue.
  • Direct lobbying involves any attempt to influence legislation (new or existing) by communicating with a member of the legislative body or other government official who has a say in the legislation.

Here’s where it gets more complicated: To be considered grassroots lobbying, an organization (such as a nonprofit) cannot state their position on specific legislation and urge their members to contact their legislators/government agencies regarding that legislation—this is considered direct lobbying.

The keyword here is members—grassroots lobbying must target the public at large in its messaging. Publishing an open letter, creating an online petition, organizing a public demonstration/rally, or distributing flyers are all considered grassroots lobbying tactics.

 

Grassroots lobbying is protected under the First Amendment rights of speech, association, and petition. Nevertheless, in most cases lobbyists are required to register if they meet certain criteria (see our post referencing this criteria), and many states have additional regulations on lobbying, with administrative fines and even criminal penalties for failure to comply. This document outlines state requirements for lobbying activity in each state.

The Long History of Grassroots Lobbying in America

Today the magic of email, Facebook, and Twitter help us spread messages and generate support with the click of a button. In centuries past, on the other hand, grassroots lobbying took place in town hall meetings and public squares. Anonymous pamphleteers frequently took to the streets to make the public aware of issues of the day—certainly this same “take it to the streets” approach is still used, but grassroots activists have additional tools to help them today.

One thing is certain: Grassroots activism was and still is an essential part of the democratic process in the United States.

capitol building and megaphoneThe Importance of Grassroots Lobbying to Democracy

Beyond sounding the alarm bell about important issues, grassroots lobbying serves the important function of educating the public on matters that affect them but which they otherwise might not know much about. Grassroots lobbyists help everyday citizens understand the substance and consequences of legislation in layman terms, and they help people understand the legislative process.

An informed citizenry provides a powerful check to legislators and agenda setters who might otherwise try to push or prevent legislation right under the noses of an uninformed public.

A proven means of effectively indirectly influencing legislative decisions, thousands of organizations and everyday citizens have used the power of grassroots lobbying to bring about change. When grassroots measures alone aren’t enough, the expert Washington D.C. lobbyists at Lobbyit can help. We’ve been working with small businesses, nonprofits, and other organizations for years to get their voices heard on Capitol Hill. Whether you want to establish a D.C. lobbying presence, closely monitor your important issues, or need help getting a bill passed, we offer some of the most cost-effective government affairs plans in the industry.

The Difference Between Lobbying and Public Relations

lobbyists shake hands

There is a common perception that lobbying and public relations (PR) have become more enmeshed in recent years, with lines blurred between the two. Part of the confusion lies in the simple fact that both lobbyists and PR specialists seek to influence others. Given the perceived overlap of lobbying and PR, we feel it’s important to distinguish between the two and outline the objectives of both. Let’s take a closer look.

Lobbying Defined

DC Lobbying Firm is generally defined as seeking to influence political decisions on behalf of an individual, organization, or group.

Lobbyists typically work with state and federal legislators and members of regulatory agencies to advocate for the proposal, passage, defeat, or amendment of laws or regulations—whether at the local, state, or federal level. Lobbyists are professionals who seek to understand the concerns, needs, and interests of their clients and use their knowledge of the legislative process to educate key decision makers. Lobbyists are sometimes unpaid volunteers who lobby because they feel strongly enough about an issue that they feel compelled to advocate for it.

Lobbyists represent a range of clients—from trade groups, to nonprofits, to labor unions, to corporations and religious organizations. They are prohibited from paying elected officials for their vote on an issue.

Those who meet three criteria must register as a lobbyist under the Lobbying Disclosure Act of 1995. The criteria include:

  1. Having earned more than $3,000 over a three-month period from lobbying
  2. Having had more than one lobbying contact
  3. Having spent more than 20 of their time lobbying for a single client over a three-month period

Now let’s look at public relations.

 

lobbyists-make-a-deal

Public Relations Defined

The definition of public relations (PR) is broad, but generally describes using communication to achieve a variety of goals on behalf of an individual, organization, or group. These goals can include:

  • Promoting a product or service
  • Internal communications (such as relaying the performance of a company to its employees)
  • Communicating the performance of a publicly-traded company (investor relations)

PR has changed considerably alongside evolving technology over the last decade. The introduction of social media and other forms of digital communications have both enhanced and created new challenges for PR. Social media has enabled two-way communication between brands and consumers, and it has created an outlet for influencers (ordinary citizens) to promote brands online. While lobbyists may also use these tools, they generally do so to a lesser degree, as face time packs more of a punch with legislators.

As an article in NPR highlighted, lobbyists may target Capitol Hill, but PR folks often swoop in first to “conditioning the legislative landscape”—in other words, shape public perception. Another key difference between lobbying and PR is that lobbyists are required to disclose their activities (subject to the criteria mentioned earlier), while PR specialists are not.

Both lobbyists and PR specialists play their own unique role in communicating information and furthering the interests of the individuals, organizations, and groups they support.

The expert DC lobbyists at Lobbyit make representation in Washington a reality for organizations of all sizes. Our lobbying service packages are competitively priced with small and mid-size organizations in mind—we believe that everyone deserves equal representation in the halls of Congress.

Plant-Based Food Group Gets a Lobbyist

lobbying for plant-based-foods

It’s no secret that industry giants have immense power in Washington, and the food industry is no exception. In 2015 there were 254 clients lobbying on the food industry—among them, the usual suspects, including PepsiCo, Coca Cola, and Monsanto.1

It’s safe to say that virtually every item you pick up from grocery store shelves likely has a trade group (or several) behind it. Lobbyists for Big Food fight hard in Washington to elevate the image and reach of products to consumers, win prime spots on supermarket shelves, and influence government organizations like the USDA to establish recommendations for how much protein, grain, or dairy Americans should be consuming.

The meat industry, in particular, has major lobbying chops (no pun intended)—groups like the National Pork Producers Council and the North American Meat Institute have long been working to keep their products front and center in the public’s mind, and on the dinner table.

Plant-Based Food Companies Get Representation

However, who represents the producers of meat alternatives—companies like Tofurky and Daiya?

Plant-based meat, dairy, and egg substitutes were once relegated to specialty stores and tiny sections at the back of supermarkets. These products were marketed to niche groups and otherwise overlooked by mainstream shoppers.

Today, the tide is turning. Growing awareness about the negative health, environmental, and animal welfare impacts of the meat, dairy, and egg industries has sparked an explosion of plant-based products that are gaining popularity every year. For example, from 2014 to 2105, sales of products incorporating plant-based proteins (i.e. proteins from peas, soybeans, lentils, and other non-animal sources) grew nearly 9% through retailers (excluding Whole Foods). This far outpaces food and beverages in general, which grew only 3.7% during the same period.2

 

Enter the Plant Based Foods Association, a spanking new trade group launched by attorney and food critic Michele Simon to represent and further the interests of plant-based food companies. The group currently has 23 members—among them Daiya and Follow Your Heart, which are well-known companies in plant-based food circles.

food-industry-lobbyingElizabeth Kucinich, wife of former congressman Dennis Kucinich, and the former policy director at the Center for Food Safety, will represent the Plant Based Foods Association in Washington. Kucinich has been an active advocate for plant-based foods, founding the Congressional Vegetarian Staff Association—aka the “Veggie Caucus”—to push for more vegetarian options in cafeterias on the Hill, just one of many examples of her efforts to push plant-based foods into the mainstream.

In all likelihood the Plant Based Foods Association will lobby in much the same manner as their meat, dairy, and egg-producer counterparts—vying for federal subsidies, for example, to encourage the adoption of plant-based “milks” as part of school lunch programs. Ms. Kucinich told the New York Times that her goal is to “level the playing field” to make sure plant-based food producers “have a seat at the table.”

A New Era in Lobbying?

The reign of the most powerful lobbies may not be coming to an end anytime soon, but the recent establishment of the Plant Based Foods Association could well symbolize the ushering in of a new era, as groups not traditionally associated with lobbying realize the advantages and necessity of having influence in Washington.

This begs the question: Who’s standing up for the little guy—the small, mid-size, and non-mainstream businesses that deserve equal representation in Washington? The expert Washington DC Lobbyists at Lobbyit believe all groups deserve equal representation—that’s why we’ve designed affordably-priced packages with clearly-outlined deliverables that make lobbying accessible to virtually any organization—no matter the size.

Sources:

Lobbying Is an Essential Part of the Democratic Process

lobbying is a part of the democratic process

At its very core, lobbying is a vital part of American democracy. Our Constitution says that “Congress shall make no law abridging the freedom to petition the government for a redress of grievances.” Lobbying is a way to ensure that grievances are heard and, ideally, resolved.

For better or worse, our laws and legislative processes are complex. They can be downright overwhelming to individual citizens or business owners. Lobbyists understand the legislative process inside and out. They act as liaisons between the public and representatives in Congress, helping congressional members understand issues they may not otherwise know much about.Lobbyists are connected to congressional staff, business leaders, and politicians in ways everyday citizens generally aren’t.

Why All the Negative Talk About Lobbyists?

The lobbying industry has faced its share of criticism from economists, academics—even the POTUS in his initial run for president.

Some see lobbying as existing only to benefit special interests, and the richest industries and corporations. There’s no denying that wealthy industries have benefited heavily from lobbying. In 2004, for example, a conglomerate of 93 U.S. corporations lobbied for a temporary tax break on offshore money they wanted to bring back to U.S. banks. Their argument: The money saved would be used to create jobs. They spent $283 million in lobbying costs and saved $63 billion in taxes—a 22,000 percent return on investment.1

Depending on your viewpoint, you may see creating jobs as a top priority and take no issue with the strategy used by this corporate conglomerate. Or you may view their move as nothing more than an unethical means of tax evasion.

Whatever position you take on this specific example, the reality is that lobbyists represent all points of view on every issue imaginable—from environmental protection advocates, to energy extraction interests, to issues facing children and the elderly.

As a recent example of democracy in action in the lobbying arena, plant-based food companies—many of which advocate for improved animal welfare and environmental sustainability—are realizing the power of lobbying to help them stand up against the agribusiness giants. Food critic and researcher Michele Simon recently launched the Plant Based Foods Association, a membership-based trade group of plant-based food producers that already has its own part-time lobbyist.2

representation across all industriesRepresentation Across the Board

Like any industry, the lobbying sector may have a few bad apples, but, on the whole, lobbyists are law-abiding professionals who represent not only corporate executives, but also workers, labor unions, trade associations, nonprofits, religious organizations, and academic institutions. At their best, lobbyists are advocates who work hard to understand the interests of their clients and use their knowledge of the legislative process to effectively educate key decision makers about the impacts of their decisions.

There is no denying that large corporations have much deeper pockets than small and mid-size businesses, nonprofits, and charities, the latter of which deserve equal representation. Thankfully, lobbying firms like Lobbyit are committed to ensuring that these organizations are heard on Capitol Hill by offering affordably-priced packages and transparent contractual arrangements. In a true democracy, everyone has a voice.

Sources:

Things to Consider Before Hiring a Lobbyist

hiring-a-lobbyist

Big Pharma is a classic example of an industry enjoying extraordinary returns on lobbying dollars spent. For example, consider the industry’s successful 2003 lobbying campaign to keep the cost of prescription drugs up. The pharmaceutical industry spent $116 million in lobbying costs to bar Medicare from bargaining for more competitive prices, ultimately preventing Medicare from saving $90 billion per year on prescription costs. The return for Big Pharma: a staggering 77,500 percent.1

Oil companies and multinational corporations routinely rake in equally impressive returns.

Perhaps you’re wondering how you can advance your organization’s interests through lobbying—if Big Pharma can do it, after all, why not you?

Whether you’re a nonprofit owner looking to establish a presence for your organization in D.C. or a mid-size business owner looking to fight local regulations that are negatively impacting your business, here are some things to consider before hiring a lobbyist.

Federal or State: Whether you should hire a state or federal lobbyist will depend to some extent on what you’re trying to accomplish. If you’re fighting a state regulation or vying for state dollars, a lobbyist who understands the intricacies of your state’s legislative and regulatory processes may be the best choice. If you’re challenging a federal policy or trying to get federal funding, an experienced lobbyist in Washington is ideal.

IRS Rules Regarding Lobbying: This is especially pertinent to nonprofit organizations who have filed for 501(c)(3) status. These nonprofit groups are only allowed to engage in lobbying (activities that attempt to influence legislation) as long as those lobbying efforts are deemed “insubstantial” or not a “substantial part of its activities.” 501(c)(3) organizations are generally limited to spending no more than 20% of their organizational budget on lobbying activities, depending on the size of the organization. A 501(c)(4) organization (also a nonprofit status), on the other hand, can engage in unlimited lobbying as long as the lobbying promotes the organization’s mission.

Budget/Price: You’ll need to determine what your organization can spend each month for lobbying services. The fees a lobbyist charges will largely depend on your particular service agreement. While some firms charge in excess of $50,000 per month for unidentified services, others, like Lobbyit.com, offer clearly outlined services at competitive pricing ranging from $1,000-$5,000 per month. Your best bet is to issue a request for proposal (RFP) when shopping for a lobbying firm to ensure you stay within your budget.

Length of Contract: Make sure you understand the contractual commitment clearly, including its length. Some firms require a commitment of six months or a year, while others offer month-to-month plans and flexibility switching between different programs as the needs of the organization or campaign change.

Experience: Does the firm you’re considering have experience working on issues pertaining to your industry? What victories have they won? Make sure your lobbying dollars are well spent by hiring a firm experienced in the issues that will further your organization’s interests.

Other Clients: One of the most important aspects of choosing a lobbyist is identifying potential conflicts of interest in the firm’s other clients. For example, if you are a physician’s organization, you’ll want to know if your lobbyist represents the health insurance industry. Some states have conflict of interest laws in place that prohibit such arrangements—but not all do—and less scrupulous firms may not disclose such conflicts. Ask to see the client list for the entire firm.

expert-dc-lobbyists

Choose Wisely

Hiring a lobbyist is a big decision, especially for small and mid-size businesses, and nonprofits with limited budgets. Interview prospective firms carefully, don’t be shy about asking for RFPs, and choose wisely. Most importantly, look for a firm with a solid reputation of successes and victories, like the expert DC lobbyists at Lobbyit.

Sources:

Lobbying for Nonprofits

capitol-in-yellow

Can your nonprofit engage in lobbying for favorable public policy or legislation? Many business associations, charities, and civic organizations are uncertain about how and when to lobby on their own behalf. If you’ve considered hiring a lobbyist for your nonprofit, but hesitate to make the move, you need to know how to stay on the right side of the Internal Revenue Service (IRS). Here is an overview to help guide your decision-making.

The nature and purpose of many nonprofits involves working for a cause, striving to change and improve the world around us. In fact, it has been argued that the most valuable public policies come from nonprofits lobbying on behalf of their causes.3

IRS Rules

Nonprofit organizations rely on obtaining 501 (c)(3) tax status which qualifies them as tax exempt according to the IRS. In order to retain its status, a nonprofit is allowed to engage in activities that attempt to influence legislation (a definition of lobbying), as long as they are deemed “insubstantial,” or not a “substantial part of its activities.” In other words, your organization would be at risk of losing tax-exempt status if it engaged in too much lobbying.1 All income then becomes subject to tax. The question is, how much is too much, and what is considered a substantial vs. an insubstantial portion of a nonprofit’s activities? The IRS makes a judgment call on each case-by-case situation. The agency will examine:

  • How much time staff and volunteers spend on lobbying activities.
  • How much money is spent on these activities.

The IRS Expenditure Test

The agency has a specific way of assessing each nonprofit’s activities to decide if they exceed the rule of substantiality. It will measure both the amount of time spent on lobbying, and the amount of expenditures (note: this is not an option for churches or private foundations).

pillarsThe limits the IRS sets look at the percentage of lobbying nontaxable dollars spent as a percentage of the organization’s total exempt purpose expenditures. For example, if your total exempt-purpose expenditures are $500,000 or less, you may spend up to 20% on lobbying.2

You can better anticipate how the IRS will view your activities if you file a special form, Form 5768, which allows you to Elect to make expenditures to influence legislation. This step is also known as “taking the 501(h) election, referring to the relevant section of the US tax code.” It only needs to be filed once, as long as your organization continues to be active in lobbying. It will stay in effect unless you file a new Form 5768 as a Revocation.3

The Big No-No

A nonprofit is not allowed to campaign for or against political candidates.

What Constitutes Lobbying?

Nonprofit organizations usually exist to effect change, but they should be informed about the ways the IRS defines lobbying. Generally, activities can be classed as directly lobbying, grassroots lobbying, or advocacy. Visit the IRS website to find detailed examples of each type, and be prepared to avoid potential conflict. Be confident you are doing all you can on behalf of your cause while remaining well within the law, by consulting with one of the top lobbying firms for nonprofits, like Lobbyit. Contact us for details at 202.587.2736.

Sources: