Federal Lobbying Disclosure Rules for 501(c)(4) Organizations

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Setting up a 501(c)(4) organization to pursue lobbying efforts involves many different moving parts. The organization itself needs to be established. Potential donors must be identified and contacted. Strategies for achieving the organization’s goals must be formulated and executed. In the midst of these things it can be easy to lose track of some of the more obscure legal rules that apply to activities of 501(c)(4) organizations. Among these are the rules governing lobbying activities of 501(c)(4)s as well as other entities, including 501(c)(3)s that lawfully engage in occasional lobbying. In this blog we look at the rules surrounding federal lobbying. A future piece will consider California’s equivalent rules.

The Federal Lobbying Disclosure Act

The most important source of laws and regulations governing lobbying activities at the federal level is the Lobbying Disclosure Act2 U.S.C. § 1601 et seq. (the “LDA”). The LDA specifically imposes requirements on two groups, lobbyists and their clients, which in the LDA’s nomenclature are referred to as “registrants.” To be a lobbyist for LDA purposes a person must have three characteristics:

  1. They are employed or retained by clients for financial or other compensation,
  2. Their services include more than one lobbying contact, and
  3. Their lobbying activities constitute 20 percent or more of their time in services for that client over any three-month period.

A “lobbying contact” is any kind of communication, whether in person, over the phone, or in writing, with a covered official in the executive or legislative branches of the federal government. The scope of covered individuals is quite broad, including elected officials as well as their staff members and other employees and officers of the federal government who are above designated pay grades.

The LDA’s registration rules

An organization that directly employs a lobbyist (as opposed to contracting with an outside lobbying firm) must register if its total expenses for lobbying activities exceed, or are expected to exceed, $13,000 in a quarterly period. These expenses typically include the salary and benefits that are paid to the lobbyist for activities at the federal level.

Some 501(c)(4) organizations pay outside firms to handle their lobbying. In such cases the 501(c)(4) probably doesn’t have an independent obligation to register under the LDA. Instead, the obligation rests with the lobbying firm to identify the 501(c)(4) as a client of the firm. This obligation arises any time a lobbying firm earns at least $3,000 for lobbying activities on behalf of a client. A professional lobbyist may have many active registrations.

The LDA’s registration rules require lobbyists (or their employers) to provide specific descriptions of the topics that the lobbyist is working on, the specific agencies contacted by the lobbyist, and, on a quarterly basis, the amount of expenses spent on lobbying activities. These filings are completed electronically through the website of the House of Representatives. Organizations that will directly employ lobbyists will need to dig into the specific rules and requirements for the filings, which are, perhaps predictably, full of potential pitfalls.

The Church Law Center of California supports 501(c)(4) nonprofits

The Church Law Center of California provides legal counsel to secular and religious nonprofits, including 501(c)(4) social welfare organizations. We can help your organization sort through the compliance rules that govern the work it does, including lobbying rules. To learn how we can help your organization, call us today at (949) 892-1221 or reach out to us through our contact page.

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