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A Primer on Advocacy for Funders with Nona Randois

Tuesday, June 23, 2020
In April, Philanthropy California virtually convened over 600 funders from across the state for a day dedicated to philanthropy's role in strengthening our democracy and civic engagement during this unprecedented moment. Now, SCG is excited to launch our Policy Blog Series in order to elevate key learnings from the Summit and to further the conversations we began to explore. 

Philanthropy and advocacy have long been perceived as incompatible – a match not made in heaven. However, philanthropic organizations are increasingly playing a more active civic leadership role through public policy in order to advance their missions. Philanthropic advocacy is becoming more critical as the nonprofit sector continues to work to impact local, state, and federal policies to respond to COVID-19 and dismantle systemic racism and support anti-racist movements. 

At the 2020 Philanthropy California Virtual Policy Summit, we invited a panel of experts to help funders of all stripes take the leap from funding to advocacy. Among them was Nona Randois, California Director of Alliance for Justice’s Bolder Advocacy program, who provided our funders with an introduction to advocacy and the generous legal rules that allow for effective systems change work while remaining compliant with their 501(c)(3) status. Bolder Advocacy is a program of the Alliance for Justice led by national experts on the legal framework for nonprofit advocacy that empowers foundations and their grantees to engage in and maximize their advocacy work. In collaboration with Nona, SCG has created this Primer on Advocacy for Funders who are interested in entering public policy work. 




Advocacy refers to the championing of a cause or a goal in order to change policies or systems. It is frequently believed that advocacy always has a lobbying or political dimension and therefore funders are prohibited from engaging in it. This is not the case. There is no specific legal definition of advocacy, it is a broad concept focused on making an impactful change that everyone can participate in. 



Funders are drawn to advocacy’s power to leverage resources. The National Committee for Responsive Philanthropy conducted a study and found that the average return on investment for advocacy grantmaking was $115 in community benefits for every $1 spent by a foundation. The returns and benefits of this study consisted of new government programs and services, increased government spending, budgetary savings, and new public revenue. These benefits often accrue to the most marginalized people in our society. Given the ways in which the current pandemic has exacerbated existing inequities, the results of advocacy are even more critical today. 

Another example of the leverage and scale that can be achieved through advocacy is the Schools and Communities First ballot measure, which will be on the California ballot in November. If the measure passes, it will generate $12 billion in annual revenue for K-12 schools, community colleges, and local communities by closing existing commercial property tax loopholes that will require corporations to pay their fair share of property taxes. Even if hundreds of funders banded together to directly fund schools, community colleges, and the other programs in the Schools and Communities First ballot measure, they wouldn’t come close to providing $12 billion in funding per year for those programs. However, if those funders came together to support advocacy efforts around this ballot measure, they could increase the probability that it will pass and that communities will receive these funds. 



All funders can engage in some type of advocacy work and all funders can fund nonprofits that lobby. However, funders have certain rules related to the kinds of advocacy work they can do depending on their tax status as a private foundation, public foundation, limited liability company (LLC), government agency, individual donor, etc. Funders can use the visual below to familiarize themselves with the different forms of advocacy they can and cannot engage in. 

This resource is reprinted with the express permission of Bolder Advocacy under the Creative Commons International 4.0 License BY-NC-ND.

The advocacy activities listed in green are unrestricted for funders of any tax status and can be engaged in at any time. This includes building relationships with government officials, research, litigation, and working to influence executive action or administrative agency rules. Lobbying and voter registration are listed in yellow because some restrictions apply to these activities and funders should be aware of the rules before funding or engaging in these activities. Finally, any form of partisan political activity -- meaning to support or oppose a candidate for elected office -- is restricted for all 501(c)(3) organizations including private foundations, community foundations, and nonprofit grantees. 



This resource is reprinted with the express permission of Bolder Advocacy under the Creative Commons International 4.0 License BY-NC-ND.

There are different restrictions and limitations for different types of 501(c)(3) organizations. On the left of the stoplight graphic are the rules that apply to public foundations, community foundations, and most nonprofit grantees. On the right, you’ll see the rules that apply to private foundations. None of the restrictions on this image would apply to individuals or LLCs because they're not tax-exempt organizations. Government funders have their own rules which vary depending on the jurisdiction. The following breakdown will provide further clarity for funders looking to understand the nuances of these activities. 



Partisan political activity is defined as supporting or opposing candidates for office. Whether it's the president, a local sheriff, a judge, or a school board member, no 501(c)(3) organization is allowed to support or oppose the election of individuals whose names are on a ballot. SCG has long supported the Johnson Amendment, the basis of this prohibition, as it preserves nonprofits’ ability to remain a trusted voice in civil society.



Lobbying is just one type of advocacy, although it may be the first one that comes to mind for many people. Lobbying is an attempt to influence specific legislation by communicating views to legislators or asking people to contact their legislators. Communicating a view on a ballot measure to the general public is also considered lobbying by the IRS. Community foundations and other public charities can lobby up to a limit and most public charities have a choice about how to measure their lobbying limit. Affirmatively choosing to use the “501(h) expenditure test” will provide public charities a generous lobbying limit that is determined primarily based on their annual expenditures and tends to be advantageous to groups with budgets under $17M. Public charities must report all their lobbying on their annual 990s.

However, the IRS specifically prohibits private foundations from lobbying with a few exceptions, such as in issues of “self-defense” -- legislation affecting the existence, powers, duties, deductibility of contributions, or tax-exempt status of an organization such as the private foundation excise tax. As grantmakers, private foundations cannot earmark funds for lobbying. Earmarking is any oral or written agreement that a grant will be used for specific purposes. However, private foundations can fund organizations that lobby either through general support grants or specific project grants.

There are also many activities that are often confused as lobbying but that actually fall outside of the IRS definition such as influencing executive orders or agency regulations and publicly expressing support or opposition to legislative proposals without a specific call to action. For instance, a private foundation can tell the general public that they support a state bill as long as they don’t ask people to contact their legislators, provide contact information or a mechanism to contact legislators, or mention legislators in specific ways. Foundations are also allowed to communicate with Governor Newsom in order to weigh in on the executive actions he’s considering in response to the COVID-19 pandemic. These activities are not considered lobbying and are safe for all funders to engage in. 



Voter registration drives are permitted for public charities and community foundations. Private foundations have to navigate special rules if they’d like to earmark funds a voter registration drive. In addition to voter registration, there are many other ways funders can get involved in elections that don’t involve supporting or opposing candidates such as educating voters around the voting process and ballot measures. Governor Newsom has recently taken emergency executive action to ensure that California’s November 2020 election will be as safe and inclusive as possible for voters and many public and private foundations weighed in with the Governor on what needed to be done to safeguard our democracy during this pandemic.



Policy and systems change occurs through collaboration and coalition building. There are a variety of roles that need to be filled for groups and efforts to be successful. Funders have many opportunities to engage in advocacy. The image below outlines some advocacy options for funders. 

This resource is reprinted with the express permission of Bolder Advocacy under the Creative Commons International 4.0 License BY-NC-ND.

Funders can also support advocacy by rethinking their grant agreements. It is not necessary for funders to restrict public charity grantees from lobbying. Restrictive grant clauses limit grantees’ flexibility to accomplish their missions and their ability to lobby within their own limits. This flexibility is especially critical right now as grantees are rapidly responding to the COVID-19 pandemic. Instead, grants can state that they are “not earmarked for lobbying” as opposed to “not allowed to be used for lobbying.” The only time a funder would need to prohibit a group from lobbying with its funds would be a private foundation making an expenditure responsibility grant to a non-501(c)(3) organization.



Funders frequently ask themselves How do I know what kind of advocacy will be effective? How do I know whether the grantee I'm thinking of funding has the ability to make a difference? To help funders answer these questions, the Alliance for Justice has created various capacity assessment tools. These tools break down advocacy and community organizing into component parts to help groups assess their strengths, identify where they want to grow stronger, partner more effectively, and increase their readiness to act. Funders may find these tools helpful when deciding what kind of advocacy investments they would like to make. 

Bolder Advocacy has also created a library of publications and resources – such as the Philanthropy Advocacy Playbook – in addition to operating a technical assistance hotline to help answer any specific questions funders might have about safely and appropriately engaging in advocacy work. 




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