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Private Foundations and Policymaking: What Constitutes Lobbying
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This material is excerpted from Private Foundations and Policymaking: Latitude Under Federal Tax Law (May 2002), by Thomas A. Troyer and Douglas Varley of Caplin & Drysdale, Chartered. The original research paper was commissioned by The Center on Philanthropy and Public Policy (CPPP) at the University of Southern California for its 2002 Forum, "Leveraging Philanthropic Assets For Public Problem Solving," under its Foundations and Public Policymaking project, funded by The David and Lucile Packard Foundation. The materials are made available here by kind permission of the authors and publisher. |
Under regulations adopted in 1990, whether an activity is lobbying depends on the content of the communication and the identity of the recipient. In short, the law applies an objective "magic words" test to determine whether an activity violates the no-lobbying prohibition. Prior to the appearance of these regulations, foundations and other charities confronted considerable uncertainty about the activities they could conduct in connection with the formulation of legislation. To remove this uncertainty and, thus, provide section 501(c)(3) organizations the ability to participate in the policymaking process as Congress intended, the Treasury Department developed a set of clear, bright-line definitions that put all parties on notice about what is, and is not, lobbying.
As the law stands today, it is what the foundation says that matters, not its subjective intent in expressing its views. In the technical language of the regulations, an activity is lobbying for purposes of the private foundation rules only if it involves either a "direct lobbying communication" or a "grassroots lobbying communication." Both of these terms have quite narrow and, in certain respects, rather counter-intuitive definitions. Foundations' ability to take full advantage of the possibilities these rules provide for supporting policy-related activities depends on understanding these definitions and their application.