By: Denise DeBelle, Law Office of Denise M. DeBelle
In the last blog, I described certain traps for the unwary non-profit organization if you are politically active and want to avoid risking your 501(c)(3) tax exempt status. Staying non-partisan is key for any 501(c)(3) organization. What about lobbying public officials- can non-profits do that?

Most definitely yes. But because of the risks of violating specific rules of the IRS, some non-profit organizations get nervous about any lobbying at all. This is unfortunate because non-profit organizations have day to day experience with populations needing government assistance, and in-depth knowledge of issues of public importance. The input of non-profits concerning the action of government and the content of our laws, is sorely needed!

What should a non-profit know about lobbying?

First, IRS regulations do not prohibit lobbying by a 501(c)(3).
But second: the IRS does impose limits on the percentage of an organization’s budget that can be devoted to lobbying.

This post will lay out the general rules about lobbying for the 501(c)(3) organization: how IRS defines it, how much is permissible, and how to be able to do more of it and still preserve the tax exempt status of your organization.

Not all advocacy is lobbying. Educating the public, being an expert on a given public issue, or advocating for the enforcement of existing laws, are not, standing alone, lobbying as defined by the IRS.

What are the different types of lobbying?

There are two types of lobbying:

• Direct lobbying
• Grassroots lobbying, which is a “call to action” by your organization, in which you communicate to members or the general public to urge them to contact legislators with a specific view on legislation, and you provide them with a mechanism for this contact.

Why is it important to know when your organization is lobbying? Returning to our original point, the IRS limits the amount of lobbying if you are a 501(c)(3) – so you are required to keep track of the percentage of your budget in order to not exceed those limits.

There are two ways to compute limits on lobbying applicable to your organization.
The first is the old-fashioned test – an IRS Rule since 1934 – which says that lobbying must be an “insubstantial part” of the organization’s activity. You’re probably asking yourself, What is insubstantial? As you can imagine, this is hard to define. It typically would be stated as roughly 20%, but this is not a true benchmark. Please note that churches and religious non-profits must use this test when lobbying, as they do not qualify for the second rule.

Luckily, Congress enacted a different rule in order to allow more flexibility to 501(c)(3)s. This second test is called the 501(h) election or the 501(h) expenditure test. It is a simple matter to elect this approach. You must submit IRS Form 5768 (a short form which simply requires a signature of the organization’s officer). What it means is the lobbying your organization does must not exceed the applicable percentage of your budget depending upon the level of overall expenditures.

Under the 501(h) expenditure test, the organization may spend the following:

On Direct Lobbying
20% of the first $500,000 of its exempt purpose expenditures
15% of the next $500,000, and so on, up to one million dollars a year

On Grassroots Lobbying
5% of the first $500,000 of its exempt purpose expenditures
3.75% of the next $500,000, and so on, up to $250,000 a year

For non-religious 501(c)(3) organizations, the 501(h) election is definitely worth your consideration. It allows the voices of your constituents, your Board and staff to be heard and to influence the legislators and public officials deciding issues which affect those constituents.

Some of these rules can get very specific and detailed, and there are some other ways to increase your activism but still avoid falling into the lobbying definition. So it is best to consult an attorney in this area if you have more specific questions.

This posting is for information purposes only and is not intended as specific legal advice.

Law Office of Denise M. DeBelle

By: Denise DeBelle, Law Office of Denise M. DeBelle
Can you correctly answer these three questions about how the IRS views your organization’s – or your client’s – political activity?

1. TRUE/FALSE: While it is not okay for my organization to directly endorse a candidate on their website, it is okay for us to link to a site of an organization that does.
2. TRUE/FALSE: For our upcoming fundraiser, we can invite one political candidate to speak about issues of interest, as long as they do not speak about the upcoming election campaign.
3. TRUE/FALSE: We can legally distribute a voter’s guide intending to educate our members, clients, and the general public on issues relevant to our organization, as long as the Guide makes comparisons between the candidates’ positions and that of the organization.

Surprise! The answer to all three of these is FALSE. We’ll explore legal options to these issues at the end of this post.

At its most basic, the IRS prohibits any partisan political activity by a non-profit organization, its staff, Board or volunteers when acting in the capacity of the organization. Do you or your non-profit clients get political? If so, you should know something about the relevant IRS rules.

A non-profit organization incorporated under Section 501(c) 3 is organized primarily as a “charity.” This designation distinguishes this type of organization from other non-profits, entitling donors to these organizations to receive a tax deduction. Political activity is outside of the charitable function of the organization.

So any level of political activity, whether federal, state or local electioneering, is never OK.

What counts as political activity? Organizations should ask themselves: Do we lobby elected officials? Have we ever invited candidates to a forum around election time? Have we taken folks to Springfield or Washington D.C. to meet with legislators?

If the answer to any of these is yes, then the following rules are the basics you must know in order to avoid risking tax penalty or loss of tax exemption:
1. Do make your views known to legislators and candidates, but
2. Do not show favoritism to any candidate for election, or in any way participate or cooperate with any organization which endorses a candidate for public office.

This blog post addresses #2. In a subsequent post, I will discuss #1.

Let’s go back to the TRUE/FALSE questions from the beginning of the post. What is the problem with these practices? Let us modify the above examples to show what the organization can do differently.

1. When discussing issues of public concern on your website, simply do not make a reference to any particular candidate in an upcoming election.

2. It is perfectly permissible to host election or candidate forums. But the organization must invite all candidates for that particular office, and give each candidate equal access to your audience.

3. Voter Guides can discuss the issues in detail even if an election is looming. The key for your Voter Guide is to be sure not to describe the voting patterns of candidates in a way to suggest endorsement or approval of any particular candidate.

But wait: does this mean a 501c3 cannot take positions on issues which may imply criticism of an officeholder, during the height of an election campaign? No! A 501c3 organization, including religious organizations, may lobby to influence legislation and that lobbying need not stop merely because an election is going on.

The next article will explore the rules for lobbying, and how non-profits can “elect” to permit more lobbying.

This is general information and is not intended as legal advice. For more detailed guidance as to your organizations’ practices, an attorney should be consulted.

Law Office of Denise M. DeBelle

By: Diane C. Decker, Quality Transitions
We’ve all been in meetings that are productive, useful, and just the right amount of time. We have also all been in meetings that are, well, the opposite of those things. While meetings obviously help us get work done, they aren’t always efficient – it’s been estimated that 70% of the time spent in meetings is wasted. Meetings are here to stay – so it makes sense to use these five practical and easy strategies for meeting participants and leaders to increase meeting productivity.

1. Prepare, Implement, and Follow-up
Oftentimes, people devote the five minutes before a meeting to prepare by skimming the agenda or jotting down a few notes. This limited focus – rather than doing the work necessary before and after the meeting – can result in wasted time for everyone in the meeting.

Prepare. Before the meeting, determine its purpose, outputs, and participants. From the purpose, create a detailed timed agenda and send it with pre-work. Providing pre-work increases the quality and creativity of the meeting’s output because more thought has gone into it. Anticipate and plan for issues that may arise during the meeting.

Implement. At the start of the meeting confirm who will lead the group through the agenda and who will take notes. These roles can be rotated, to help build skills and ownership in the meeting. During the meeting, keep the agenda in front of people. Start the meeting with a review of any decisions and follow-up from the previous meeting. Use a set format for meeting notes. Avoid lengthy notes by documenting: 1) key decisions made 2) next steps and those responsible for implementation 3) information to be shared beyond the meeting and 4) pre-work for the next meeting.

Follow Up. Before leaving, evaluate the meeting and confirm decisions that were made, next steps, and owners of each of the action items. For groups with meeting guidelines, discuss which guideline was strong and which one needs to be improved. If you don’t have guidelines, then share what went well and what needs to be improved in future meetings.

After the meeting, distribute the notes for review. Everyone prepares for the next meeting and those with assigned tasks complete them.

2. Create a Realistic Agenda
Putting together an agenda is like cooking-we need to have the right ingredients and add the proper amounts in the correct order. From the meeting purpose, identify specific agenda items and put them in a logical order. Determine who owns each agenda item, which includes leading the discussion, and make sure they know what is expected. Finally, determine the amount of time for each item, working with the discussion leaders.

3. Stay on Track
For regularly scheduled meetings, establish meeting guidelines and keep them within view. The guidelines are a code of conduct developed by the group. Each person agrees to follow the guidelines, and say something when they aren’t being met. Example guidelines include:

Focus on moving forward, rather than overworking an issue
If you have a concern with a decision, say so in the meeting with everyone present
Strive for balanced participation
Another tool for staying on track is the use of a “parking lot” or “issues list.” Whenever anyone brings up an idea or issue that is not on the agenda, it is written in a place that everyone can see. At the end of the meeting, it is determined who will own follow-up on each item. Some items may no longer be relevant by the end of the meeting while others become agenda items for a future meeting.

4. Shorten Meeting Time
The use of the huddle format can shorten meetings. No one sits during these 5-20 minute meetings, which increases the sense of urgency and productivity. Huddles are ideal for information sharing and less complex decision making.

A common cause of wasted time is starting meetings late. Recently I attended a meeting that started more than 15 minutes late primarily because the meeting leader rushed in late and disorganized. She then decided to wait “a few more minutes” for others. If you are the meeting leader, whenever possible start a meeting on time even when there are people missing. Doing so motivates latecomers to come on time in the future so not to miss any part of the meeting.

5. Next Steps
If you are motivated to improve a meeting you regularly lead, send this blog to the meeting participants and suggest you take 10-15 minutes at the next meeting to agree on one step you will take as a group to cut the amount of time wasted in future meetings. If you are not the leader, send the blog to that person and express your interest in helping to improve the meetings further. For tips to address the unique challenges of virtual meetings: Four Ways to Vitalize Your Virtual Team

Learn more about Diane Decker on her ACN Member Profile and her website.

By: Laurel O’Sullivan, The Advocacy Collaborative, LLC.

Who does it better?
Consider two immigration-focused nonprofit organizations: “Nonprofit A” devotes their programmatic efforts to serving individuals on a case-by-case basis, helping them as they wade through the ocean of paperwork and red tape. The second organization, “Nonprofit B”, provides similar support, but also devotes a significant portion of their energy to advocating for policy changes that lighten the burden for immigrants trying to gain citizenship. Which organization helps more people?

Too often, the nonprofit sector either undervalues – or worse, avoids altogether – the power of advocacy. Time and again, nonprofits expect a CEO or other staff person to “do advocacy” in their spare time, relegating it as separate from the rest of the organization. This separatist approach – defining advocacy as an “add on” that continually falls to the bottom of the list – represents a significant missed opportunity because high-quality advocacy advances an organization’s mission while achieving impact on a scale not possible through direct service or programs alone. (Perhaps you’ve guessed the answer to our question, above — by adopting a systemic approach to changing policy, Nonprofit B can achieve far greater impact and serve far more individuals than Nonprofit A can by only serving individuals on a case by case basis.)

The separatist approach is also evident in most of the trainings for advocacy and policy. These tend to be narrowly focused on individual skills building – learning the legal rules of advocacy or how to talk to policymakers. Yet research suggests that when individuals are trained about policy and advocacy in isolation from their organization and its context, the organization’s overall effectiveness suffers. In turn, advocacy is further marginalized and organizations remain simply reactive to the policy landscape, rather than proactive.

The truth is, advocacy that is connected to the mission is the single most effective strategy a nonprofit can employ to have impact, because it has the potential to enhance all the things an organization does. By taking a public position on an issue, a nonprofit increases its likelihood of attracting funders, volunteers and garnering more public support for its work. It’s also an opportunity to demonstrate leadership to external audiences including policymakers and constituents.

Successful advocacy requires that an organization recognize that there are certain internal conditions that must be in place to support advocacy. And these conditions need to align with the multiple dimensions or facets of advocacy: the external dimension focuses on the broader policy environment; the internal dimension highlights the organizational, programmatic and individual-level components of policy work; and in between, there are linkages and alignments that must be made among the program, stakeholders, and the internal supporting functions of an organization like communications, finance, technology and fundraising.

What does an advocacy-forward organization look like?
Organizations with a strategic focus on advocacy routinely plan for and prioritize advocacy; it is built it into thee character and culture of their organization. How do they accomplish this?

1. A commitment to advocacy is firmly in place at the leadership level. This includes ensuring the board understands the value of advocacy and how it can advance the organization’s mission.

2. The mission, vision and values of the organization include advocacy as an intrinsic component. Research has shown that the most successful advocacy organizations are ones that have integrated it by sharing leadership, recruiting board members with advocacy knowledge, building a culture of support for advocacy

3. A plan and mechanisms for engaging stakeholders exists including communications devices such as newsletters and social media outlets, technology and databases for tracking and managing relationships with constituents, as well as resources and ready made materials for constituents to take action on specific bills.

In short, similar to any other strategy for achieving effectiveness, advocacy must be planned for in advance to ensure the organizational dots are connected and aligned to achieve maximum impact and the internal conditions for advocacy to take root, grow and be nurtured are in place. Only in this way will advocacy begin to be seen as part of the nonprofit business model.

For more on Laurel’s work, or to contact her directly, check out her website and her ACN profile!

By Laurel O’Sullivan, Principal and Founder, The Advocacy Collaborative, LLC.

By: Jim Heininger, Dixon|James Communications
The potential is so promising: a striking new name, a more relevant promise to customers, the greater ability to enter new markets. All these outcomes can be achieved with the rebranding of an outdated or past-its-prime image. We’re seeing an unprecedented number of companies, non-profits, destinations and even sports teams embarking on efforts to gain this differentiated edge. Assisted Living Concepts rebrands as Enlivant to show more promise in its aging services; the community of Buffalo, New York, rebrands itself as a hockey mecca; and the Washington Redskins football team are under increasing pressure to rebrand what many see to be an outdated and insensitive trademark.

Rebranding should be viewed as a strategic growth driver. The ability to reposition your business or organization to better capture new growth, attract better talent or more easily globalize is an investment in your future. Remember, when Steve Jobs returned to Apple Computer in 1977 he renamed the company simply Apple, enabling it to launch other technology advancements for consumers. Now it ranks as the globe’s most valuable brand. But the rebranding process, takes time, lots of energy and investment. Just look to Radio Shack whose valiant efforts to revitalize its retail brand are hampered by its struggling financial performance. It finally filed for bankruptcy earlier this year.

We recently rebranded a senior health care organization whose 90-year-old brand made it challenging to grow revenue in an increasingly regulated and margin-strained industry. The group’s wise strategic plan called for expansion of service lines to younger individuals beginning at age 55 that would support their aging process and develop relationships for a broader range of services. Rebranding the organization with an aspirational name allowed it to tell a contemporary and differentiating client service story. We also coined a new business category of “adult life services” that created context for more lifestyle (education, fitness and wellness) and in-home care services to be marketed over time. The business transformation’s success even surprised client leadership as fellow industry players came calling asking for advice on how they had reinvented themselves in what seemed like an industry stuck in old models. The client has since established a business consulting capability which helps similar industry players transform to better meet the needs of aging Americans. It stands as a good example of how rebranding can open new doors and accelerate growth.

Our experience with rebranding non-profit organizations suggests you follow these 10 fundamental principles if you want to create a forward-facing organization loaded with opportunity:

1. Use rebranding to accelerate growth. Big changes should deliver big outcomes. Plan strategically and opportunistically to revive your business and its growth.

2. Update your brand promise. True rebranding is not just refreshing your logo or adopting a new name, it’s the all-encompassing process of renewing your promise to customers and stakeholders, updating the core driver of your organization.

3. Revisit your mission statement and vision too. Every rebranding assignment we’ve led has included the update of the foundational statements of the organization. Refreshed organizational values will also need to align with the desired new brand behaviors that you want employees to embrace and convey in their work.

4. Give your new brand elasticity. This is the time to give your brand the ability to stretch and grow as the organization requires. Give it room to support your long-term strategic vision.

5. Engage leadership from the start. Change starts from the top. An aligned group of management must communicate the business case for change and carry your new banner forward.

6. Rebrand from the top down, and inside out. Leadership must first embody the new brand values and demonstrate them for employees who become your most important brand ambassadors. Involve and engage your employees in the process and they’ll more actively evangelize the new positioning. Only announce your rebranding once your internal ambassadors can confidently deliver it externally.

7. Instill the new brand into your culture. Seize the opportunity to initiate cultural changes that reinforce new on-brand behaviors. Rebranding is also one of the rare times that you can work to banish unproductive cultural dynamics and instill desired new cultural rituals and practices. This all-encompassing change presents the rationale to encourage employees to “let go” of long-held unconscious ways of behaving that limit your company success.

8. Utilize change management principles to align understanding and support. Businesses don’t change, individuals do. It’s important to use proven processes for gaining understanding, acceptance and participation in your brand change. In their 2008 assessment of rebranded companies, academicians Merrilees and Millers asserted that because rebranding is an incremental change process, as opposed to a radical change, it necessitates the use of change management considerations, especially at the initial design level of the new vision formulation.

9. Align all communications and actions behind the new brand. Every piece of communications, marketing and visual identify must reflect the new visual identity. Likewise there must be a noticeable link between your products and customer service with the updated brand promise for stakeholders to believe your new positioning. Once you’ve complete that, plan new signature events that uniquely activate your revitalized brand.

10. Formally launch your new brand. Set a date to flip all branding elements simultaneously for maximum impact. This helps you build anticipation internally and leaves little doubt that you’ve committed to this exciting, all-encompassing change.

Approach the process with this level of engagement and substantive change and you are more likely to set a solid foundation for future growth and expansion.

Best of Luck.