Navigating Lobbying and Risk: Insights From Our Consulting Attorneys

During AAFCPAs’ recent Nonprofit Seminar (April 2026), consulting attorneys Joshua England, LLM, Esq. and Chris Consoletti, Esq. shared practical guidance with more than 530 nonprofit leaders on navigating and lobbying activity while protecting tax‑exempt statuses. The session explored how public charities can engage thoughtfully in lobbying and policy conversations, understand where statutory lines are drawn, and make informed decisions that support both their mission and compliance.

Keeping your tax-exempt status is paramount for nonprofit organizations, and most nonprofit leaders are not looking to take unnecessary risks to put their status in jeopardy. They are focused on advancing their missions responsibly while staying on solid ground compliance wise. Lobbying plays an important role in that work, yet the rules that govern it can feel complicated even for experienced boards. Today’s political environment places greater emphasis on clarity and judgment—understanding what truly counts as lobbying and how lobbying can be structured to support mission goals with confidence and care.

Understanding IRS Lobbying Rules for Nonprofit Organizations

Lobbying is often discussed in broad, sometimes abstract, terms. The rules that govern it are far more specific. For nonprofit organizations, the distinctions among lobbying and political activity shape how organizations report, govern, and engage publicly. Leaders who want to participate thoughtfully in policy conversations benefit from understanding where those lines are drawn and how they apply in real situations.

At the center of this framework is the IRS’ definition of lobbying. Lobbying is limited to efforts to influence specific legislation, whether through direct communication with legislators or by encouraging the public to take action on a particular bill. Nonpartisan research, educational outreach, and broad discussions of public policy often do not count toward lobbying limits. For many nonprofit organizations, this clarity brings reassurance. It confirms that these activities, when approached thoughtfully, will not jeopardize their tax-exempt status.

The distinction between lobbying and political campaign activity is more rigid. Nonprofit organizations may engage in limited lobbying, but they may not support or oppose candidates for public office. This boundary is firm and long established. When leaders understand it clearly, they are better positioned to guide staff, boards, and communications teams with consistency, especially when policy issues and election cycles begin to overlap.

Taken together, these definitions provide a practical framework for decision‑making. They give nonprofits a shared language for evaluating lobbying choices, aligning expectations, and engaging publicly with intention. With that foundation in place, leaders can approach lobbying with steadier judgment, even as the policy landscape continues to evolve.

Choosing the Right Lobbying Compliance Framework

With clarity around where lobbying boundaries sit, attention naturally shifts to structure. How lobbying activity is measured has a meaningful impact on both confidence and consistency on the organization’s 990 reporting.

For many nonprofit organizations, that clarity begins with how lobbying activity is evaluated. By default, lobbying is measured under a broad ‘substantial part’ standard. While workable for organizations with limited engagement, this approach can feel imprecise as lobbying becomes more active without clear limits.

Choosing a defined measurement framework, such as the 501(h) election, introduces clearer reference points under the Expenditure Test. Expenditure‑based thresholds make it easier to track activity, communicate expectations to the board, and provide clear limits to protect the organization’s exempt status.

Organizational structure also shapes how lobbying is carried out. Some nonprofit organizations may determine that their long‑term goals are best supported through a combination of entities, pairing the nonprofit with a separate, affiliated 501(c)(4) organization designed to carry on unlimited lobbying activity. When used correctly, this structure can provide flexibility while preserving the organization’s tax‑exempt status. Its effectiveness depends on discipline: clear separation, accurate cost allocation, and consistent oversight.

Across these choices, the underlying principle remains the same. Lobbying is most effective when it is deliberate and well structured. Frameworks that emphasize clarity and transparency allow nonprofit leaders to engage in policy work with confidence, reinforcing trust with boards, funders, and regulators along the way. When structured correctly, lobbying becomes a steady extension of mission stewardship rather than an ongoing source of uncertainty.

Putting This Into Practice: Nonprofit Lobbying & Compliance

For more than 50 years, AAFCPAs has partnered with nonprofit organizations as they navigate complexity, steward resources, and advance their missions with confidence. Our nonprofit practice brings together audit, tax, outsourced accounting, fractional CFO, and advisory services to support organizations operating in increasingly regulated environments. We work alongside executive teams and boards to strengthen financial reporting, governance, and decision‑making across funding, compliance, and growth initiatives. With extensive experience across sectors including healthcare, education, human and social services, and affordable housing, our teams provide practical guidance grounded in how nonprofit organizations operate today. The result is clarity that supports stronger decisions and sustained mission impact.

These insights were contributed by Joshua England, LLM, Esq., Partner & Tax Attorney and Chris Consoletti, Esq., Consulting Attorney, Director.

Questions? Reach out to our authors directly or your AAFCPAs partner.

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