“If you’re not at the table, you’re on the table”: Nonprofit lobbying with foundation grant funds

Many nonprofits that advocate for public policy change use the above quotation by Wyoming Senator Mike Enzi to explain and defend their decision. Nonprofit lobbying, their board members claim, is not only a healthy part of America’s democratic process but one of the most effective (and cost-effective) ways to implement the positive change that their organizations stand for. But is this true? Has the controversy over nonprofit lobbying really finally died down?

Nonprofits’ involvement in the dirty game of politics is certainly not the lightning rod it was decades ago. When environmentalist groups began funneling their donations into letter-writing campaigns and other advocacy in the 1960s there were many who recoiled at the idea of using foundation grants and private donations for something that seemed so uncharitable on the surface. Of course, environmental nonprofits had a good reason to turn to lobbying: Unlike other 501(c)3 organizations they had a tough time directly providing their constituents with the goods and services they demanded. Sure, they might be able to build a recycling center, but what could a nonprofit do about deforestation, animal testing, or lake pollution?

nonprofit lobbying

But it’s such a cool state-of-the-art recycling center.

 

In 2001 UPenn’s Femida Handy published a study on 50 Canadian environmental nonprofits and deemed their public policy strategy a smashing success story. These organizations are the best-suited for environmental advocacy in great part because they have a lot of clout (vs. individuals), are credible watchdogs (vs. businesses), and have the infrastructure in place to keep their issues in the minds of the voting public. Handy’s greatest concern was that nonprofit lobbying was not typically conducted along market-based lines. The tendency to champion a policy no matter what drains coffers and frustrates donors who don’t see their gifts effecting any change.

In the present day more and more nonprofit board members are urged to advocate. Marcia Avner finds it to be “honorable work” and called on board members to use their “power and privilege” on behalf of their constituents. Tom Sheridan’s 2008 manifesto, “Public Policy Advocacy: The Case for Nonprofit Engagement” considers lobbying “an untapped political force to shape the nation’s future.” He heaps praise on the American Cancer Society, the first health group that patterned its strategy after the environmentalist model, for bringing about vast improvements in health care policy and inspiring other groups to reach out to the government.

The Center for Lobbying in the Public Interest (CLPI) sprung up to promote nonprofit lobbying. Bemoaning that at present only 11% of foundation grants go towards “structural change,” the CLPI educates charitable board members on how they can legally use grant money for lobbying, essentially:

  • They can use general support grants
  • They can use money given for projects that include lobbying, as long as the grant is not explicitly “earmarked” for lobbying and is equal to or less than the total project budget
  • They can engage in public policy advocacy that does not meet the narrow definition of “nonprofit lobbying,” including encouraging and training people to advocate for their cause at a later date
  • A more detailed CLPI document can be viewed here.

So, is lobbying really the most effective and cost-effective way for nonprofits to help people? Yes and no. In a certain way it’s a lot like teaching a man how to fish. Instead of only being able to help a few people, public policy advocacy can change the system so that it not only works for many more but also ameliorates the problems so that fewer people face them in the future – some of these problems being homelessness, having no health insurance, or lacking art and music enrichment in school.

On the other hand, not all nonprofits (let alone all Americans), agree on what direction social progress should take. Accelerated lobbying can waste tons of funding as opposing organizations duke it out for the long run. Handy’s concern for market-based decisions based on the mountains of data nonprofits gather can be useful here. In the late 1990s, for example, a $1 donation to an environmental group resulted in about $2,000 worth of pollution abatement after lobbying – but little public policy advocacy is as effective as that. It is indeed for this and other reasons that many foundations and private donors still do not consider advocacy an acceptable use of their funds.

 

cancer patient

Nonprofit lobbying doesn’t give donors the same feeling of having connected with and helped an individual in need.

 

A nonprofit’s positive relationship with its supporters is its most crucial asset. That means that it doesn’t matter if you can squirm through the 501(c)3 loopholes, or if your research shows that your campaign will undoubtedly effect the change your constituents want at a reasonable cost. You have to be clear with your donors about your intent before you ever begin advocating. Maybe they really do prefer that you put that money directly into after-school STEM programs. Consider applying for two sets of foundation grants for separate projects, one to provide only traditional goods and services and another which explicitly includes lobbying for structural change. Remember that laws can always shift both ways. Whether you choose to enter the public policy fray or not, it’s your nonprofit’s longevity and ongoing involvement that will do the greatest good for the people you serve.

Questions about IRS laws or how to frame your public policy aspirations in your grant requests? Wild Fundraising has answers!