To: Jorj X Mckie who wrote (8148 ) 7/10/2002 9:56:28 AM From: Alan Smithee Respond to of 14610 so.....what are the laws about tax exempt status and political lobbying? Here's a pretty good summary from the site of a Private Foundation: II. The Prohibition Against Private Foundation Lobbying Every organization that is exempt from federal tax under Section 501(c)(3) of the Internal Revenue Code ("I.R.C.") is classified as either a "private foundation" or a "public charity." A public charity is generally an organization that normally receives substantial support from the general public, government agencies, or both. Grantmakers are generally (but not always) private foundations, while grant applicants are generally public charities. . . . [A] private foundation, . . . is subject to a number of legal limitations that do not apply to public charities. In particular, . . . [a Private Foundation] is absolutely prohibited from making any grant "to carry on propaganda, or otherwise to attempt, to influence legislation . . . ." I.R.C. § 4945(d)(1). That proscription, commonly known as the "lobbying limitation," covers both "any attempt to influence any legislation through an attempt to affect the opinion of the general public . . ." ("grass roots" lobbying) and "any attempt to influence legislation through communication with any member or employee of a legislative body, or with any other government official or employee who may participate in the formulation of the legislation . . ." ("direct lobbying"). I.R.C. § 4945(e). A public charity, on the other hand, may engage in limited lobbying, so long as "no substantial part" of the organization's activities is "carrying on propaganda, or otherwise attempting, to influence legislation." I.R.C. § 501(c)(3). A public charity may, in order to avoid the vagueness and uncertainty of this "no substantial part" test, make an election under I.R.C. § 501(h) to become subject to specific dollar limitations on the amounts that it may spend on lobbying. (Lobbying on legislation is distinguished from campaigning for candidates for public office. All Section 501(c)(3) organizations, both public charities and private foundations, are prohibited from supporting or opposing political candidates. brainerd.org