Fiscally Sponsored Organizations and Lobbying Rules: Navigating Legal and Ethical Guidelines
Fiscally sponsored organizations (FSOs) have become increasingly popular over the past few years as a way for small, grassroots organizations to access funding and resources that would otherwise be out of reach. These organizations operate under the umbrella of a larger, established nonprofit organization like NOPI, which provides them with administrative support, financial management, and other necessary services.
One of the benefits of being fiscally sponsored is that it can allow organizations to engage in advocacy and lobbying activities without having to go through the complex process of registering as a separate lobbying entity. However, it is important to understand the lobbying rules that apply to fiscally sponsored organizations in order to ensure compliance with federal and state laws.
Under federal law, lobbying is defined as any attempt to influence legislation, regulations, or executive orders at the federal level. This includes direct lobbying (communication with members of Congress or other government officials) and grassroots lobbying (encouraging public members to contact their elected representatives on a specific issue).
“Advocacy vs. Lobbying: Language Guide,” by Dr. Sara Watson
“Advocacy can take many forms. In simple terms, it means making the case for your cause or mission. When we talk about advocacy for nonprofits, we usually mean making your case in a way that will change public policy to help your cause. That means reaching audiences in a position to help make those changes. Advocacy could be any one of a number of things from research and public education to lobbying elected officials and voter engagement. These activities are especially important when you want to make sure that underrepresented and vulnerable communities have a voice in decisions that affect them.”
Fiscally sponsored organizations are subject to the same lobbying rules as any other nonprofit organization and are required to register and report their lobbying activities if they meet certain thresholds. Specifically, organizations are required to register and report their lobbying activities if they spend more than $20,000 per year on lobbying activities or if lobbying activities constitute more than 20% of their total expenditures for the year.
It is important to note that these rules apply only to lobbying activities at the federal level. Many states have their own lobbying rules and registration requirements, which may be more or less stringent than federal law. Fiscally sponsored organizations should be sure to research the lobbying rules in their state and ensure compliance with all applicable laws.
In addition to these legal requirements, fiscally sponsored organizations should also be aware of the ethical considerations surrounding lobbying activities. While advocacy and lobbying can be powerful tools for advancing social change, it is important to maintain transparency and integrity in all communications with government officials and the public. Organizations should clearly disclose their funding sources, avoid misrepresenting the facts or their position on an issue, and ensure that their lobbying activities align with their mission and values.
In summary, fiscally sponsored organizations have a unique opportunity to engage in advocacy and lobbying activities but must do so within the bounds of federal and state laws. By understanding these rules and guidelines, organizations can effectively advocate for their causes while maintaining the trust and support of their stakeholders.
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
BEING A PLAYER A Guide to the IRS Lobbying Regulations for Advocacy Charities
After a project is done with its 'Model A' fiscal sponsorship relationship, they need to become self-sufficient in managing their nonprofit program and resources. To help with this, Social Impact Commons has provided a basic checklist that outlines the steps necessary to launch the project as an independent organization.