Well, this was a journey!
A couple of years ago when I returned to Bolder Advocacy, I remembered a little bit of tax law magic to preserve a 501(c)(3)’s unused lobbying capacity by granting it to a 501(c)(4). Surely someone had written that up as a fact sheet or something in my absence, right? Nope! So I set out drafting up something to make this easy for folks.
Well, the wheels sometimes turn a bit slowly on such things, but a couple years later here we are! Maximizing Your Advocacy: Eight Steps For Granting Unused Lobbying Capacity From a 501(c)(3) to an Affiliated 501(c)(4) is a guide on how to do it all. It’s complete with a simple guide, plus some supporting docs (sample agreement, sample board resolution and even a handy worksheet to run the numbers).
The short version… 501(c)(3)s often end their year with unused lobbying capacity that disappears when the ball drops in Time’s Square (yes, well, actually… person that IS only if it’s a calendar year org) and some money in the bank. Meanwhile, their affiliated (c)(4) sits there with less money in the bank and the capability to take that lobbying capacity and do some great work with it. A simple grant from the (c)(3) to the (c)(4) — along with a few required limiting clauses, because… tax law — and the (c)(3) maximizes its lobbying expenditures before the end of the year and the (c)(4) can use that anytime down the line for lobbying work. Rarely do you grab win-win’s (the Stefon Diggs trade for you Bills fans) but this one of them.