Printable Version Email to a Friend |
Private Foundations and Policymaking: Exceptions to the Definition of 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. |
Even if an activity satisfies the definition of direct or grassroots lobbying, it nonetheless is permissible for foundations if it falls within an exception to the basic definition. The most important exception excludes the preparation and distribution of "nonpartisan analysis and research." This exception permits foundations, or their grantees, to offer legislators, executive branch officials, and the public materials that make forceful, substantive arguments for or against specific legislation, provided the materials present a sufficiently full and fair exposition of the legislation to allow the recipient to form his or her own conclusions.*Although the lobbying regulations do not specifically define the "full and fair" standard, the available authority indicates that the fundamental requirement is that the material provides a factual basis for its conclusions and argues for them in a reasoned fashion.** Foundations have relied on this exception to hold policy briefings on Capitol Hill, to invite legislators and staff to symposia where substantive legislative analyses are presented, and even to produce documentary films on legislative topics.
Traditionally, the exception for nonpartisan analysis and research has been the principal vehicle through which foundations have gotten their views before policymakers. As major funders of scholarly and scientific research, foundations have supported much of the primary intellectual analysis that informs the national policy debate in many areas. The nonpartisan analysis and research exception allows foundations to package that work as forceful, reasoned briefs for the legislative outcomes they desire and give them to legislators.
A second useful, though more limited, exception to the basic lobbying definition excludes oral or written responses to written requests for technical assistance from a legislative committee, subcommittee, or other governmental body.*** In order to qualify for this exception, the written request must come on behalf of the legislative body itself, not from an individual legislator asking on his or her own behalf. Where such a request solicits the foundation's views on the legislation, it grants foundation executives broad ability to state their organization's full analyses of, and conclusions on proposed legislation directly to legislators.
A third exception allows foundations to communicate with government officials involved in the legislative process about specific legislation that could affect the foundation's existence, powers, duties, tax-exempt status, or right to receive tax-deductible contributions.+ Relying on this exception, foundations have pressed Congress for favorable changes to the tax code provisions that regulate them, including reductions in the tax they pay on their investment income and the ability to provide donors a deduction equal to the value of publicly traded stock. Of broader relevance, this "self-defense" exception has permitted foundations to fund advocacy against attempts to curtail the advocacy rights of charities.
Finally, a narrow exception to the lobbying definition allows foundations to present information to government officials about a program that is, or may be, funded by both the foundation and the government, provided the communications are limited to the jointly-funded program.++ Although this exception is not relevant to foundations interested only in changing substantive laws, it can be enormously useful to foundations seeking government funding for particular projects. Thus, while discussions between a foundation and a legislator about appropriations legislation are generally prohibited, under this exception a foundation can ask a legislator's assistance in obtaining an appropriation for a project the foundation is supporting. Obvious examples involve foundations seeking government funding for a public facility, like a hospital or park, the foundation is supporting.
*See Treas. Reg. § 53.4945-2(d)(1). In addition to satisfying the "full and fair" exposition standard, nonpartisan analysis and research must also be distributed to persons on both sides of the legislation addressed.
**See Rev. Proc. 86-43, 1986-2 C.B. 729.
***See Treas. Reg. § 53.4945-2(d)(2).
+See Treas. Reg. § 53.4945-2(d)(3).
++See Treas. Reg. § 53.4945-2(a)(3).