Chapters or councils must strictly account for the portion of its activities devoted to lobbying.
In the case of either direct or grassroots lobbying, IRS rules require that a tax-exempt organization not devote a substantial part of its expenditures to lobbying. Chapters should restrict lobbying expenditures to no more than five percent of their annual budgets and refrain from any lobbying altogether unless there are well established accounting procedures for tracking expenditures and maintaining them at or below five percent.
The IRS defines “lobbying” very narrowly. Lobbying is the act of asking (such as through a letter or direct communication) an elected official or their staff to take action on a piece of legislation, such as voting for, against, or cosponsoring a bill. The official definition of “legislation” is reprinted below:
Legislation includes action by Congress, any state legislature, any local council, or similar governing body, with respect to acts, bills, resolutions, or similar items (such as legislative confirmation of appointive office), or by the public in referendum, ballot initiative, constitutional amendment, or similar procedure. It does not include actions by executive, judicial, or administrative bodies.
Controls are in place at the national level and applied to expenditures for activities such as congressional testimony, the Grassroots Activist Network, and direct mail appeals. Chapters and councils generally do not have such controls in place, and thus must exercise cautious restraint when it comes to lobbying. Additionally, no council or chapter should employ or retain the services of a lobbyist unless it files a 990 return with the IRS and is able to demonstrate in the filed return that its expenditures, in connection with the lobbyist, as well as any other lobbying expenditures, are collectively less than five percent of its total annual expenditures.
Please be sure to contact staff before engaging in any lobbying activities.