As Pride Month approaches, many grassroots organizations focused on LGBTQ rights and equality are gearing up to advocate for the issues that matter most to their communities. While advocacy work is critical to promoting change and driving progress, it can also be complex and legally challenging for nonprofit organizations.

ad·vo·ca·cy

ˈadvəkəsē/

Noun

Public support for or recommendation of a particular cause or policy.

One solution that many organizations turn to is fiscal sponsorship. In a fiscal sponsorship arrangement, a nonprofit organization (the sponsor) provides administrative and financial support to a project or organization that is not yet recognized as a nonprofit (the sponsored project). This can be a valuable way for emerging organizations to access resources and funding and engage in advocacy work.

However, it’s important to remember that there are specific guidelines around lobbying for nonprofit organizations. These guidelines are designed to ensure that organizations can advocate effectively and legally without jeopardizing their tax-exempt status.

Here are some key considerations for fiscally sponsored organizations (FSOs) engaging in advocacy work:

1. Lobbying vs. Advocacy: It’s important to understand the distinction between lobbying and advocacy. Lobbying refers to attempts to influence legislation, while advocacy encompasses a broader range of activities such as education, research, and public awareness. While lobbying is permissible for nonprofits, it is subject to certain limitations and reporting requirements.

2. Limits on Lobbying: The IRS limits the amount of lobbying activity a nonprofit can engage in without jeopardizing its tax-exempt status. In general, nonprofits may engage in lobbying as long as it does not constitute a “substantial part” of their overall activities. The exact limit varies depending on the organization’s budget and other factors.

3. Tracking and Reporting: Nonprofits that engage in lobbying activities are required to track and report their expenses and activities. This includes filing a Form 990 with the IRS, which includes information on lobbying expenses and activities.

4. Legislative Threats: In recent years, the LGBTQ community has faced legislative threats at the local, state, and federal levels. For example, there have been efforts to pass laws that would discriminate against transgender individuals, limit access to healthcare for LGBTQ individuals, and roll back other hard-won rights and protections. Nonprofits can play an important role in advocating against these threats, but it’s important to do so in a legally compliant way.

As advocates for LGBTQ rights, it is crucial for Fiscally Sponsored Organizations to understand these guidelines and follow them to avoid any legal or financial penalties. By adhering to the guidelines, FSOs can effectively lobby for legislation that supports the LGBTQ community and work towards creating a more inclusive society.

BolderAdvocacy.org provides resources and expertise to help your charitable organization advocate.

Additional Resources

• IRS Lobbying Flowchart to help determine if your communication is considered lobbying under federal tax law rules

• What is Lobbying Under the 501(h) Election?

• BEING A PLAYER A Guide to the IRS Lobbying Regulations for Advocacy Charities

• Be Not Afraid — of Advocacy

• ACLU - Mapping Attacks on LGBTQ Rights in U.S. State Legislatures