To demonstrate that complexity, BoardSource cautions that while the law “strictly prohibits political activities” by charitable, tax-exempt nonprofit organizations, this does not make it illegal for individual board members to be involved in politics, or support certain candidates for office, so long as those individuals are not representing or attempting to speak for the board.
And though partisan “political activities” (defined by BoardSource as “activities intervening directly or indirectly in any political campaign on behalf of or in opposition to any candidate for public office”) are off-limits to nonprofit organizations, these organizations can conduct lobbying activities under certain circumstances. Lobbying (defined by BoardSource as attempting to “influence legislation”) by nonprofit organizations is permitted under the condition that the lobbying activities do not constitute “a substantial part of the organization’s total activities.”
BoardSource notes that the IRS puts a dollar amount on the term “substantial” to guide organizations in adhering to the tax-exempt statutes. For example, nonprofit organizations may allot up to 20 percent of their first $500 in expenditures for lobbying activities; 15 percent for the next $500,000; 10 percent of the next $500,000; 5 percent of the next $500,000, on up to $1 million total in lobbying expenditures.
The IRS further stipulates that only 25 percent of all non-profit expenditures can be devoted to grassroots lobbying (i.e., efforts to gain political support of the general public). Though it is highly unlikely that an area agency on aging would reach that 25 percent cap, it is critical that agencies carefully track their lobbying activities and funds –and all the more reason for boards of directors/trustees to consult legal counsel in areas of uncertainty related to lobbying. There will usually be many.