NP Action - Private Foundations and Policymaking: Direct Lobbying

Private Foundations and Policymaking: Direct Lobbying

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.

A direct lobbying communication is a statement to a legislator or legislative staff member that (a) refers to specific legislation and (b) reflects a view on that legislation.^* This definition immediately excludes from the set of prohibited activities all efforts to influence legislators' views on matters other than specific legislation.

Hence, the legal rules permit foundations to discuss policy issues with legislators or staff even if those issues are the subjects of pending legislation, provided the foundation does not refer to that legislation.^** The signal benefit of this rule is that a foundation does not have to stop expressing its views to legislators on a broader policy issue just because there is a pending piece of legislation that addresses an aspect of that policy.

Example: A foundation, or its grantee, prepares a brief paper summarizing the need for scientific research on sources of renewable energy. The paper does not reflect a view on any specific legislative proposal, though there is legislation pending in Congress that would provide tax credits to encourage scientific research of the sort the foundation supports. Under the basic definition of direct lobbying, giving the report to a member of Congress would not violate the prohibition against foundation lobbying.

A similarly important aspect of the lobbying definition is that attempts to influence actions by administrative agencies are not lobbying no matter how pointedly the foundation expresses its views on the specific action in question.

Accordingly, while a foundation cannot send letters to members of Congress expressing support for a bill that would limit mining on public land, it can press officials at the Department of the Interior for regulations that would have the same effect. Since the impact of executive and agency decisions can be as far reaching as legislative action, this rule offers foundations a very significant opportunity to participate in the formation of public policy.

Example: In January of 2001, the Clinton administration issued the Roadless Area Conservation Rule, which barred virtually all road building on 58.5 million acres in national forests. This rule was the result of three years of work and hundreds of meetings where nonprofit organizations, funded in part by foundations, met with White House and agency officials to press for adoption of the rule. None of these meetings were "lobbying" because the roadless rule is not legislation.
Example continued: The timber industry filed suit in federal court to have the roadless rule set aside as illegal. Nonprofit groups, again with foundation support, met with officials at the Department of Justice to encourage the agency to defend the rule vigorously. The meetings were not lobbying because the Department's decision is not legislation.

The legal rules provide additional protection for foundations working to affect administrative actions by stating expressly that a communication with an executive branch official will not be lobbying unless the primary purpose of the communication is to influence legislation.^***

Thus, under the primary purpose standard, foundations need not worry that efforts to influence non-legislative decisions will be re-characterized as lobbying merely because legislation is mentioned in the course of exchanging information with an executive branch official.

Example: A foundation program director meets with a senior official at the Environmental Protection Agency to urge tightening of the clean air regulations. During the course of the conversation, they discuss incidentally possible legislative responses to the new regulations. Since discussing legislation is not the primary purpose of meeting, it is not lobbying.
Example continued: Later the program director meets with the same EPA official with the primary purpose of asking her to testify before a congressional committee in support of reauthorizing the Clean Air Act. The meeting is lobbying, because the primary purpose of the meeting is influencing action by Congress.

^* See Treas. Reg. § 53.4945-2(a) and § 56.4911-2(b)(1)(i). For purposes of this definition, recipients of a lobbying communication may also, under quite limited circumstances, include executive branch personnel involved in the legislative process, and the term "specific legislation" includes not only acts, bills, resolutions and legislative vetoes but also specific legislative proposals that have not been introduced; ballot initiatives and referenda; and proposed treaties that must be submitted to the Senate for ratification-- but only after negotiations have begun. Treas. Reg. § 56.4911-2(d)(1).

^** See Treas. Reg. § 53.9945-2(c)(2).

^*** See [Treas. Reg. § 56.4911-2(b)(1)(i)(B).