501(c)(3) Lobbying Limits: What Nonprofits Need to Know Before Advocating

Key Takeaways: 

• 501(c)(3) nonprofits can engage in advocacy during election seasons as long as they avoid partisan campaign activity and understand what counts as lobbying versus issue education. 
• Lobbying means trying to influence specific legislation through direct contact with lawmakers or by urging the public to contact them; broader issue advocacy is generally allowed if it doesn’t call for action on a bill. 
• The IRS permits lobbying within limits under either the substantial part test or the 501(h) expenditure test, which sets predictable spending caps based on budget size. 
• Because state registration rules and election-season pitfalls can create accidental risk, tracking activity early and getting legal guidance helps nonprofits stay compliant and confident. ‘

Election seasons bring a surge of headlines, opinions, and strong feelings. If your nonprofit is stepping into that conversation (or wondering whether you can), you’re not alone. Many nonprofit leaders want to educate their communities, respond to legislation, or share what’s at stake, but worry about crossing a line without meaning to.  

That worry makes sense. The rules for 501(c)(3) organizations aren’t always clear at first glance. But once you understand what’s allowed and what isn’t, advocacy becomes far less stressful. You can speak up for your mission and stay compliant at the same time.  

What Counts as Lobbying for 501(c)(3) Nonprofits?  

First, let’s get one misconception straight: Lobbying is not promoting a certain candidate or party. Lobbying involves influencing laws themselves. That can happen in two ways:  

• Direct lobbying: You communicate with a legislator (or their staff) about a specific bill.  

• Grassroots lobbying: You encourage the public to contact legislators about a specific bill.  

By contrast, issue advocacy — explaining how a policy impacts your community, sharing research, or hosting educational events — is generally allowed as long as you’re not pushing people to take a position on a specific piece of legislation.  

Here are a few examples to make the distinction clearer:  

• Allowed (to a limited extent): Sharing a fact sheet about an upcoming education bill to help your community understand what it does.  

• Not allowed: Posting, “Vote for candidate A because they support this bill.” That steps into campaign activity, which 501(c)(3)s cannot do.  

Nonprofits can educate, inform, and discuss big-picture policy concerns without it being lobbying. The line only appears when you’re talking about specific legislation and asking someone to act on it.  

Understanding 501(c)(3) Lobbying Limits  

501(c)(3)s are allowed to lobby; the question is simply how much. You can choose between two different IRS frameworks:  

1. The substantial part test

This test is subjective. The IRS looks at how much of your overall activities (time, staff energy, resources) relate to lobbying and decides whether it’s “substantial.” Because there’s no clear percentage, it can feel a bit vague.  

2. The 501(h) expenditure test

This option is much clearer. You choose it by filing a one-time form (Form 5768). Once you elect it, it stays in place until you undo it. Under 501(h):   

• A nonprofit that spends $500,000 or less each year can spend up to 20% of that on lobbying.  

• Larger organizations follow a sliding scale, up to a maximum of $1 million in lobbying expenses.  

Most nonprofits prefer this approach because it gives predictable limits and helps avoid guesswork.  

If you happen to go over the limit in a given year, the IRS adds an extra tax on the amount above the limit, which is another reason many organizations choose the 501(h) election. It helps you plan advocacy work with fewer surprises.  

When and How to Register for Lobbying  

IRS rules tell you how much lobbying you can do. State rules tell you when you need to register. Lobbying registration requirements depend on your state and may be triggered by:  

• How much time someone spends lobbying.  

• How much money you spend on advocacy.  

• Whether you hire outside lobbyists.  

• Whether you lobby in multiple states.  

Here’s how to stay ahead of it:  

• Start tracking your lobbying activity early, including time, dollars, and who was involved.  

• Before your legislative session begins, take a quick look at your state rules.  

• If you work in coalitions or across state lines, check each state’s thresholds since they vary widely.  

This is one area where a quick legal check-in can save a lot of stress. The goal isn’t to limit your voice — it’s simply to make sure your advocacy structure fits your actual work. If you’d like to speak with an attorney about your nonprofit’s lobbying activities and requirements, reach out. 

Advocacy Dos and Don’ts for 501(c)(3) Compliance  

Do:  

• Educate lawmakers about how certain policies affect your mission.  

• Encourage civic engagement (like voter registration) without supporting candidates.  

• Keep records of your lobbying activity, so you’re never guessing later.  

Don’t:  

• Coordinate with political campaigns or PACs.  

• Use restricted funds to cover lobbying expenses.  

• Reference candidates or political parties in your advocacy communications, even indirectly. Aim for nonpartisan, rather than one-party or bipartisan. 

Why Legal Guidance Helps During Election Season  

Most nonprofits don’t run into problems because they’re trying to push boundaries. Issues usually come from uncertainty around 501(c)(3) advocacy rules, from leaders doing their best with confusing 501(c)(3) lobbying limits, time restrictions, and a sincere desire to do what’s right.  

But election seasons introduce additional risks nonprofits may not realize fall under IRS political activity rules, especially when public activities resemble partisan behavior (even unintentionally). Common areas where nonprofits accidentally cross lines include: 

• Wedge issues: Highly polarizing topics that distinguish candidates. Even neutral education can appear partisan if the issue is closely tied to one side of a race. 

• Voter registration efforts: These must be strictly nonpartisan in both messaging and targeting. 

• Publishing or distributing voter guides: All candidates must be included, questions must be neutral, and the format can’t imply preference. 

• Inviting candidates to speak at events: Requires specific safeguards to maintain neutrality. 

• Linking to external political content: Even a website link that leads to partisan commentary can trigger IRS concern. 

• Coalition work: Partnering with organizations that engage in political activity (such as 501(c)(4)s) can create risk if their actions are attributed to your nonprofit. 

That’s where having legal support matters. Nonprofit attorneys, like those at Charitable Allies, can help you:  

• Understand which of your activities count as lobbying.  

• Decide whether the 501(h) election is a good fit.  

• Make sure your board policies align with your advocacy goals.  

• Set up simple tracking systems for time and spending.  

• Figure out whether (and when) state registration applies.  

• Talk through the “Are we allowed to…?” questions that come up in real time.  

The goal is not only compliance, but peace of mind — knowing you have someone you can call when a new bill appears, when a coalition asks you to sign something, or when your team isn’t sure what crosses a line.  

Advocate With Confidence  

Your nonprofit’s voice matters. When you advocate within the rules, you help shape policies that impact the people and communities you serve, and you do it in a way that protects your mission for the long run.  

If you’re feeling unsure about your current policies or how to move forward as election season ramps up, you don’t have to navigate this alone. The team at Charitable Allies is here to help you understand your options, set up a structure that fits your work, and move forward confidently.  

Schedule a free consult today, and we can walk through your advocacy plans together to make sure you’re set up to speak clearly, boldly, and in full compliance.