Public charities, social welfare organizations, religious groups, and other non-profit, tax-exempt organizations are not generally prohibited from engaging in all lobbying or public policy advocacy merely because of their federal tax-exempt status. These charitable organizations, which have the advantage of receiving contributions from private parties which are tax-deductible for the contributor under 26 U.S.C. § 170(a), are limited in the amount of lobbying in which they may engage if they wish to preserve this preferred federal tax-exempt status. The general rule for a charitable organization exempt from federal taxation under § 501(c)(3) is that such organization may not engage in lobbying activities which constitute a "substantial part" of its activities. Section 501(c)(4) Civic Organizations

Organizations which are tax exempt under section 501(c)(4) of the Internal Revenue Code are generally described as "[c]ivic leagues or organizations not operated for profit but operated exclusively for the promotion of social welfare ...." If a civic league or social welfare organization is tax exempt under § 501(c)(4) of the Internal Revenue Code, there is generally no tax consequence for lobbying or advocacy activities (as long as such expenditures are in relation to their exempt function). Section 501(c)(5) Labor Organizations and 501(c)(6) Trade Associations

Labor and agricultural organizations are tax-exempt under section 501(c)(5) of the Internal Revenue Code, and business trade associations and chambers of commerce are exempt from federal income taxation under section 501(c)(6). Neither labor or agricultural organizations, nor business trade associations or chambers of commerce, have any specific limitations upon their lobbying activities as a result of their tax-exempt status. This provision, which is commonly called the "Simpson Amendment," prohibits section 501(c)(4) civic leagues and social welfare organizations from engaging in any "lobbying activities," even with their own private funds, if the organization receives any federal grant, loan, or award. Under current federal provisions, no contractor or grantee of the federal government, regardless of tax status, may be reimbursed out of federal contract or grant money for their lobbying activities, or for political activities, unless authorized by Congress. These restrictions generally apply to attempts to influence any federal or state legislation through direct or "grass roots" lobbying campaigns, political campaign contributions or expenditures, but exempt any activity authorized by Congress, or when providing technical and/or factual information related to the performance of a grant or contract when in response to a documented request. In addition to these restrictions of general applicability on the use of federal contract or grant money for lobbying activities, there may be specific statutory limitations and prohibitions on particular federal moneys or on particular federal programs. That provision of law, at 18 U.S.C. Required Disclosures of Lobbying Activities

		Lobbying Disclosure Act of 1995, as Amended

Organizations which engage in a particular amount of lobbying activities (which must include more than one direct lobbying contact of a covered federal official) through personnel compensated to lobby on the organization's behalf will be required to register and to file disclosure reports under the Lobbying Disclosure Act of 1995, as amended. The Lobbying Disclosure Act also exempts from the definition of "lobbying contacts" the activities of lobbying state or local legislators or other state or local governmental bodies or units.
Public charities, religious groups, social welfare organizations and other non-profit organizations which are exempt from federal income taxation are not generally prohibited from engaging in all lobbying or public policy advocacy activities merely because of their tax-exempt status. There may, however, be some lobbying limitations on certain organizations, depending on their tax-exempt status and/or their participation as federal grantees in federal programs. Additionally, organizations (other than churches or their affiliates) which meet specified threshold expenditure requirements on lobbying activities and which engage in direct lobbying of federal officials must register employees who are paid to lobby, and must file reports on lobbying activities, under the Lobbying Disclosure Act of 1995, as amended.
As to the different categories of tax-exemption: charitable, religious or educational organizations which are exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code, who may receive contributions from private parties that are tax-deductible for the contributor, may not engage in direct or grass roots lobbying activities which constitute a "substantial part" of their activities if they wish to preserve this preferred tax-exempt status. "Civic leagues or organizations not operated for profit but operated exclusively for the promotion of social welfare ....," tax exempt under 26 U.S.C. § 501(c)(4), on the other hand, have no tax consequence expressed in the statute for lobbying or advocacy activities. (But note restrictions on 501(c)(4)'s receiving federal grants or loans). Labor and agricultural organizations, tax-exempt under Section 501(c)(5) of the Internal Revenue Code, and business trade associations and chambers of commerce, exempt from federal income taxation under Section 501(c)(6), also have no specific statutory limitations upon their lobbying activities as a result of their tax-exempt status. Private foundations are generally not allowed to lobby.
A provision of the 1995 Lobbying Disclosure Act, commonly called the "Simpson Amendment," prohibits section 501(c)(4) civic leagues and social welfare organizations from engaging in any "lobbying activities," even with their own private funds, if the organization receives any federal grant, loan, or award. Because of the definitions under the Lobbying Disclosure Act, however, the "Simpson Amendment" limitations do not appear to apply to any "grass roots" lobbying or advocacy, nor to lobbying of state or local officials, and the amendment also exempts certain other official communications or testimony.
Finally, federal contract or grant money may not be used for any lobbying, unless authorized by Congress. No organization, regardless of tax status, may be reimbursed out of federal contract or grant money for any lobbying activities, or for other advocacy or political activities, unless authorized by Congress. This applies to direct or "grass roots" lobbying campaigns at the state, local or federal level (but exempts providing technical and/or factual information related to the performance of a grant or contract when in response to a documented request). The provision of law at 18 U.S.C. § 1913, as amended, as well as the so-called "Byrd Amendment," would also generally prohibit the reimbursement or payment from federal grants or contracts of the costs for "lobby" activities.