First, we’ll review the few types of advocacy that are prohibited to private foundations, so we can then move on to all that small foundations can do in advocacy. Though certain activities have special requirements that must be followed, there are only two main types of advocacy that private foundations should not engage in:
Partisan political activity. Under no circumstances can small foundations engage in or fund political campaign activity which has the intent of influencing the outcome of a public election. Your foundation may not make direct contributions to a candidate, endorse a candidate, pay for the salaries of campaign workers, fund partisan or area-specific voter registration, or pay for the publication of written materials that speak out either for or against a candidate. What is trickier to determine is when a foundation may engage in voter education, for example, by publishing a pamphlet explaining where candidates stand on issues important to the foundation. This should be done only with the advice of legal counsel with experience in this area.
Lobbying and grants earmarked for lobbying. Lobbying by private foundations or earmarking grants for lobbying is prohibited. There are two types of lobbying: direct lobbying and grassroots lobbying. Direct lobbying is when an organization communicates with a legislator to express a view about specific legislation. Grassroots lobbying is when an organization asks the public to communicate with legislators to express a view about specific legislation. This leaves room for a foundation to issue a passive report on pending legislation, but does not allow a critical review of legislation that identifies it as either desirable or undesirable and urges readers to support or oppose it by communicating with legislators. The laws define “legislation” broadly to include any action by Congress, state legislatures, local councils and the public (with respect to a referendum, initiative, constitutional amendment or similar procedure).
The penalties for violating these prohibitions can be harsh, and in extreme cases could include a revocation of your foundation’s tax-exempt status in addition to the imposition of the penalty taxes imposed on any taxable expenditure. Any communication that does not fit within these narrow definitions is not lobbying.
Now that you know the two main activities that should be avoided, here is a list of just some of the activities your private foundation can be involved in. The list below includes those activities carved out as exceptions to its broad prohibitions on political activity and lobbying, as well as those activities that simply do not fall under the strict definition of “lobbying.” Therefore, your foundation can safely engage in the following activities if you follow the specific rules:
Make general support grants to organizations that do advocacy, including lobbying. When making a general support grant, the small foundation should not prohibit, in the grant agreement or other oral or written communications, the grantee from using the funds for advocacy (including lobbying) purposes, as there is no legal reason to impose such restrictions.
Make project grants for specific advocacy activities. For instance, foundations can specifically fund: a public education campaign; a litigation effort; publication of a research report; a grantee’s work with an administrative agency to implement a new law; or a candidate debate. Private foundations can even fund a specific project whose budget contains a line item for lobbying, but it should be stated in a grant agreement that the grant cannot be greater than the project’s budgeted non-lobbying expenses for that year. (Remember: grants cannot be earmarked for a legislative purpose.)
Make general support grants to public charities that engage in nonpartisan voter registration (though not exclusively in voter registration), and earmark grants to public charities that have received a written § 4945(f) ruling from the IRS. Grant funds cannot be earmarked for specified locations. Rely on experienced legal counsel when engaging in this activity.
Fund or conduct studies of broad social, economic or policy issues so long as the discussion does not address specific legislation.
Educate the public on issues by writing letters to the editor, putting information up on the foundation website, hosting a public forum, taking out ads, and a variety of other activities.
Fund or conduct and disseminate comprehensive nonpartisan analysis or research on a legislative issue even expressing a view (specific rules apply). For example, a small foundation could produce a report discussing the need for more after-school programs for children, and the best way to fund such a program.
Respond to a written request from a legislative body for technical assistance on pending legislation.
Request government officials to enforce an existing law or issue an executive order.
Engage in “self-defense” lobbying concerning legislation that affects the foundation’s existence powers and duties, tax-exempt status, and the deductibility of contributions to private foundations.
Engage in voter education efforts. Small foundations may engage in nonpartisan voter education efforts such as conducting: public education and training sessions about participation in the political process; nonpartisan get-out-the-vote drives; candidate debates and forums, or candidate education on public interest issues. Use caution here – rely on experienced legal counsel to ensure that your voter education efforts steer clear of influencing public elections.
Of course, foundation officers and directors may still undertake private lobbying on their behalf, on their own time, and at their own expense.