501(c)(3) Organizations: Don’t Leave Your Advocacy Power on the Table, Make the Most of the Options Available to You

by Director of Policy & Advocacy Norma Paz García

Based on the results of recent UnidosUS surveys of its affiliates, we know that members see a strong need for advocacy — and the need to develop stronger accountability with elected officials. We also know that less than two percent of UnidosUS members have an affiliated 501(c)(4). Overall, affiliates see a strong need for capacity building regarding their advocacy strategies. 

Decisions, decisions. So, what can 501(c)(3) public-charity organizations do to make sure we don’t leave our power on the table? A second key question is: When does it make sense for a 501(c)(3) to establish a 501(c)(4) to make sure that elected officials are responsive to community needs, have a sense of urgency and employ an “equity first” approach to policy making? 

To get a sense of what is possible, MEDA recommends starting by checking out Bolder Advocacy, a program of Alliance for Justice, which provides practical guidance and many free materials on how to make advocacy accessible to nonprofit organizations.

First, you can do a lot with a 501(c)(3) to advocate for your community. Despite fears that engaging in advocacy could put an organization’s tax-exempt status at risk, it’s important to know that there is much a 501(c)(3) can do to advance community interests before policymakers. According to Bolder Advocacy, “501(c)(3)s can educate about issues, engage in nonpartisan voter engagement activities and lobby within limits.” 

But is that enough? Some organizations may find that they need more to get the influence and change they need and establish a 501(c)(4). Bolder Advocacy notes, “501(c)(4)s and (c)(5)s can do all that [permissible activities of 501(c)(3)s] and more; they can conduct an unlimited amount of lobbying, which is useful for ballot measure campaigns, since much work supporting or opposing measures constitutes lobbying. They can also support or oppose candidates as long as that is not their primary activity.” We know the latter can be an important lever, especially during an election year.

Taking power and influence to the next level. There is no doubt that 501(c)(4)s have the potential to take advocacy impact to the next level. See the interesting discussion in this Bolder Advocacy publication regarding the “The (c)(4) Secret — Public Policy Change is Rarely Achieved Through (c)(3) Funding Alone.” The same publication also includes a discussion of how (c)(4)s can provide a platform for constituencies that are otherwise disenfranchised, which accurately describes many of the communities we serve. 

In general, the strength of a 501(c)(4) comes from the fact that unlike a 501(c)(3), a (c)(4) can engage in issue-based advocacy and engage in the political process by taking positions to support or oppose candidates as part of their overall 501(c)(4) activities. Taking positions on candidates is something that a 501(c)(3) absolutely cannot do without risking its tax-exempt status. Also, a 501(c)(4) doesn’t have the lobbying spending limits of a 501(c)(3). (Though, depending upon your organization’s budget, lobbying spending limits may not be a big concern). 

Reality check. It’s important to know that a 501(c)(4) can be complicated to set up and maintain. Contributions to 501(c)(4)s are not tax deductible, meaning that donors will need to be motivated to give, not because they seek the deduction, but because they want their donation to have the greatest impact, in a way that may not be achievable with a 501(c)(3) alone. There are other considerations to take into account as well. 

Remember, your 501(c)(3) organization can engage in issue advocacy. Just be sure to know and follow the rules. In some cases, your organization may need the extra leverage that a 501(c)(4) can provide to make the difference that you need most in your community. 

Learn more about all the options that are available to build and use the power you need. 


No matter what choice you make …
If your organization decides to engage in advocacy that includes lobbying — either direct or grassroots — be sure to check federal, state or local lobbying registration and reporting rules that may apply. Rules can vary by state and local jurisdiction. 

Also, if your organization decides to establish a 501(c)(4), we recommend that you obtain legal advice from a qualified attorney to make sure you have properly set up the 501(c)(4), have filed all the necessary documents, have the proper systems in place (especially if your 501(c)(4) is affiliated with a 501(c)(3)) and that you comply with all reporting requirements to the proper agencies.

Keep us posted. We’d like to hear from you about how you’ve navigated these choices and how you’ve used your 501(c)(3) and/or 501(c)(4) to advocate for your community. 

Drop us a line at action@medasf.org.


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