Here are 10 things your nonprofit can do to help defeat a bad ballot measure or proposition. (Please note disclaimer at the end of this.)
1. Email early and often.
- Email your board members, contributors, and other supporters regularly to encourage them to actively oppose the proposition by adding their names to the website campaign, contribute to the campaign, communicate with their friends and neighbors, and write letters to the editors of their local daily and weekly papers. Below is a sample letter you can modify.
- Email should start 12 weeks before the election and continue biweekly or weekly through the end of the campaign.
- This is the most important thing your organization can do!
2. Call your members and supporters two weeks prior to the election.
3. Communicate through your website.
- Add a link on the home page of your website to campaign website and encourage your members to add their names to their mailing list.
- Add social network buttons (to connect to Facebook and LinkedIn) to your website or blog.
4. Send direct mail to your supporters once or twice during the final three weeks of the campaign.
5. Use social media.
- If your organization has a Facebook page, create a link to the campaign website so their announcements are automatically posted to your organization’s Facebook page.
- Promote your page through your website and email.
- If your organization doesn’t have a page, this is an opportunity to create a Facebook page for your organization.
- Similarly, if your organization has a LinkedIn page, post regular No on Prop. 23 updates. If you don’t have one, create a LinkedIn page for your organization. This is less critical than creating a Facebook page, but a good idea nonetheless.
- Create an e-card about Prop 23 that your supporters can send to friends. If your organization is using Convio or similar donor relationship management software this is quite easy.
6. Volunteer in the campaign and participate campaign’s speaker’s bureau (it’s one of the options on the volunteer form).
7. Write letters to the editors of your local daily and weekly papers.
- Have your Executive Director write a letter to the editor about why s/he or your organization are opposing the ballot measure.
- This generates positive press for your organization while helping the cause.
8. Engage your staff and supporters. Hold a contest among staff or supporters to see who can raise awareness about the ballot measure in the most creative way.
9. Donate. Your organization can legally donate to the No on 23 campaign (see below, then consult with your nonprofit tax attorney).
10. Vote. Make sure every member of your staff knows about the campaign and is given time to vote and communicate with their personal networks. Please strive for 100% voter participation from employees. Of course you cannot mandate them to vote, but you can take steps to encourage them to register to vote, and to vote by mail or at the polls on election day.
Tax and Campaign Considerations (as of 2007)
(Please note disclaimer at the end of this article)
There are a variety of legal requirements for direct lobbying and campaign finance regulations as they relate to a corporation and its status as a federal and/or state tax-exempt nonprofit. I am not an attorney, so I encourage you to speak with your legal counsel if you have any questions about the following information or opinions.
The first rule is that nonprofits may NOT engage in candidate campaigns in any way. Second, it is important to be aware that there are two separate bodies of law. One is the federal tax code. This controls what a corporation can and cannot do as a nonprofit. The other is the California Fair Political Practices Act. This sets forth filing and disclosure requirements for organizations engaged in political activities.
Federal Tax Code Issues. Taxable (for-profit) entities are not allowed tax deductions for lobbying or political activity expenditures. Since nonprofit entities are tax-exempt, the IRS wants to make sure that tax-paying entities do not side step this rule by taking deductions for contributions made to nonprofits which then use the contributions for expenditures that the tax-paying entity is not allowed to make.
The IRS requires certain exempt organizations to disclose information about lobbying expenditures on their annual Form 990 and to inform members of the nondeductible portion of membership dues spent on such activities. In order to remain a 501(c)(3) exempt organization lobbying cannot represent a substantial portion of an organization’s activities. An organization that engages in excessive lobbying may lose its 501(c)(3) status.
Exactly what the IRS considers to be “excessive lobbying” is open to interpretation. Courts have rejected tests based solely on a percentage of the organization’s budget stating that using percentages (such as 5%) is only one measure to be considered.
In order to avoid this uncertainty, The Tax Reform Act of 1976 allows a nonprofit to register with the IRS under Section 501(h), called the “Expenditure Test.” This establishes a sliding scale of allowable lobbying expenses based on a percentage of the Nonprofit’s budget. An organization making the 501(h) election is permitted total annual direct lobbying expenditures as follows:
- 20% of the first $500,000 of the agency’s budget, plus;
- 15% of the second $500,000 plus;
- 10% of the third $500,000 plus;
- 5% of any balance.
Expenditures exceeding the limits are subject to a 25% excise tax. Make sure your nonprofit makes the 501(h) election.
Lobbying is defined as any communication with a legislative body, government official or employee who may participate in formulating legislation when that communication refers to specific legislation and reflects a view on that legislation. For voter initiatives and referenda, the electorate is the legislative body.
Activities Not Considered Lobbying. The following activities are not considered lobbying and are not subject to restrictions:
- Presenting testimony or technical assistance before legislative committees in response to official written requests for such testimony.
- Nonpartisan studies, analysis or research are not considered lobbying, although the mere presentation of an opinion is not considered nonpartisan.
- Self-defense communications are allowed. These are considered to be communications with respect to possible action by the legislative body, which might affect the organization’s existence, its powers or duties, its tax-exempt status or the deductibility of contributions to the organization.
- Membership communications on specific legislation are not lobbying expenses if directed only to members of the organization. The legislation it refers to must be of direct interest to the organization and its members.
- Addressing broad social economic issues is not considered lobbying communication if the discussions do not address the merits of specific legislation or directly encourage a member to take action on a proposal or legislation. Legal expenditures to ensure that a referendum or initiative is placed on the ballot do not qualify as lobbying based on this criterion.
Campaign Reporting Issues. Nonprofits may participate in ballot measures as long as the expenditures associated with this participation are reported as direct lobbying in its tax filings AND are reported as required by the California Fair Political Practices Act. There are some important exceptions:
- Communications with members are not reportable.
- Staff-time on direct lobbying, while reportable in tax filings, is NOT reportable so long as that time never constitutes more than 10% of the overall effort for any individual employee in any single month.
Protecting the anonymity of nonprofit members and the tax-deductibility of their gifts. The source of funds used in activities reportable as campaign contributions must be disclosed. In order to protect the anonymity of members and the tax-deductibility of their gifts nonprofits must use funds “segregated from membership gifts” (and from foundation gifts, which may not be used for lobbying) for political in-kind or cash contributions. Funds which may be used for this purpose may come in the form of interest earnings or court or settlement awards from litigation.
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A Plug for My Clients
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