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Lobbying: Private Foundations vs. Public Charities

Private Foundations: Private foundations are NOT permitted to lobby except on issues relating to how they are regulated. Most of the lobbying done by the Council on Foundations falls under this so-called "self-defense" exception. It is a very important exception, but it is also narrowly drawn.

CAUTION: The self-defense exception applies only to direct lobbying; grassroots lobbying in self-defense is not protected by this exception.

Under this exception, a direct communication is not lobbying if it "is an appearance before, or communication with, any legislative body with respect to a possible action by the body that might affect the existence of the [private foundation or] electing public charity, its powers and duties, its tax-exempt status, or the deductibility of contributions to the organization...."¹ (emphasis added). A private foundation may also initiate legislation limited to the same self-defense issues.² Similarly, a private foundation may "communicate with an entire legislative body, with committees or subcommittees of a legislative body, or with representatives of the executive branch who are involved with the legislative process so long as such communication is limited to the prescribed subjects."³

Public Charities (including Community Foundations): Electing public charities ARE permitted to lobby on a host of issues related to their charitable work—not just self-defense issues. However, lobbying expenses on self-defense issues need not be reported on the Form 990. Expenses for lobbying on any other type of legislation must be collected and reported on this tax form.

Private foundations and electing charities should take care not to interpret this exception too broadly. For example, efforts to prevent tax legislation creating a cap or floor on itemized deductions would clearly qualify as self-defense because the purpose of these proposals is to limit the "deductibility of contributions. " However, efforts by a private foundation or a child care organization to prevent cuts in state appropriations for such care would not qualify as self-defense. The cuts might in fact terminate the existence of the organization, but the termination would be based on economic conditions not the right of the organization to exist legally.

¹ Treas. Reg. Section 56.4911-2(c)(4)(i), IRC Section 4945(e), and Treas. Reg. Section 53.4945-2(d)(3).

² Treas. Reg. 56.4911-2(c)(4)(v)

³ Ibid.