When you think of nonprofits, what organizations first come to mind? You might initially think of Doctors Without Borders, the Bill and Melinda Gates Foundation, the Red Cross or UNICEF. According to the United States Internal Revenue Service (IRS), nonprofit organizations include any organization that is not organized or operated for the benefit of private interests, and does not promise any net holdings to the benefit of any private shareholders or individuals.1
Philanthropy and charity are a major component of many nonprofit organizations. However, advocacy, which, in the simplest terms, means broadly communicating about and providing education around the mission of an organization, is at the heart of most not-for-profit groups. Advocacy can be conducted to increase awareness of an issue, to encourage people to donate to a cause or to get involved with an organization. Sometimes, it’s even used to influence public policy.
Investigating Nonprofit Advocacy and Policy
Seeking to fill in gaps in the knowledge of nonprofit advocacy, Kent State University Master of Public Administration faculty members, Daniel E. Chand and Daniel P. Hawes, along with Maria Apolonia Calderon from the University of Maryland, decided to dig into when and how human service nonprofits seek policy change for marginalized groups to better understand the potential for nonprofits to cause changes in policy.
In the published paper, Final Lines of Defense: Explaining Policy Advocacy by Immigrant-Serving Organizations, the researchers explain that most prior research on nonprofit advocacy has not focused on politically polarized issues, such as contemporary immigration policy. 2 So using a nationwide survey of immigrant-serving organizations (ISOs), they investigated what makes ISOs more likely to engage in policy advocacy, how they advocate and how effective they are in changing policy.
According to Chand, the trio chose to use ISOs as a survey subject because the people they serve are largely a low-income, vulnerable group. Additionally, unlike members of other marginalized communities who can participate in many types of advocacy on their own, immigrants often need an organization to advocate on their behalf due to limitations of language, resources, legal vulnerability and others.
“Explaining how ISOs advocate,” says Chand, “Helps us to develop best practices for nonprofits that serve other low-power communities in society.”
The Impact of Funding on Nonprofit Policy Advocacy
There’s often a lot of concern among some in the nonprofit community, that service organizations that accept public funding will be less likely to engage in policy advocacy. “The thinking behind this fear is that groups will be worried about upsetting public officials who may decide to end public support for the programs these nonprofits receive funds to implement,” explains Chand.
However, based on their surveying, the researchers found this concern to be unwarranted in the case of ISOs.
“In fact, ISOs who received state and local funding were actually more likely to engage in policy advocacy,” Chand shares, “This is a very positive finding for immigrants served by these groups. Big corporations that receive government contracts, like Lockheed Martin or the private prisons who are contracted to detain immigrants, spend tons of money on policy advocacy every year.”
It’s important that the people behind ISOs, which play an important role in advocating for less punitive and more compassionate immigration policies, understand that they can and should continue to push for policy change without worrying about losing financial support from public sources.
“Big corporations spend billions each year lobbying Congress alone. That doesn’t even count the money they spend on state and local policy advocacy,” Chand explains, “Service organizations, like ISOs, obviously cannot match that level of advocacy. But it is important that they do speak to policymakers on behalf of their clients because there is no one else who can.”
Understanding the Power of the H-Election
Nonprofit budgeting can be a little tricky to explain. For the purposes of this research it’s important to know that nonprofits are legally allowed to spend some money on lobbying which allows them to participate in the public policy process on behalf of their beneficiaries.
According to the Council of Nonprofits, rather than imposing an absolute ban on all lobbying by charitable nonprofits, the IRS set a limit, providing that, “no substantial part of the activities” may be for “carrying on propaganda, or otherwise attempting, to influence legislation.” Thus all charitable nonprofits may freely engage in legislative lobbying as long as that activity amounts to only an “insubstantial” amount of the nonprofit's activities. Of course, determining what qualifies as “substantial” vs “insubstantial” is hazy, measured retroactively and therefore somewhat subjective.
The H-election, or filing Form 5768, allows nonprofits to be evaluated objectively based on the expenditure test rather than the imperfect measure of “substantial” activity. The expenditure test says that the extent of an organization’s lobbying activity will not jeopardize its tax-exempt status, provided its expenditures, related to such activity, do not normally exceed an amount specified in section 4911 of the tax code - a limit generally based upon the size of the organization.3
Chand says that there’s no drawback to taking advantage of the H-election but unfortunately, organizations continue to not take full advantage of the option. More than 60% of managers in the national survey of ISOs conducted by the researchers said they did not utilize the H-election, and 32% did not know if their organization used it.2 With this report’s publication, publicizing of the issue and further education of nonprofit leaders, the researchers hope that more organizations will realize the power of this option available to them.
The Critical Role of Advocacy in Policy-Making
One of the researchers’ conclusions is that advocacy in some form is a necessary function for the human service sector at-large. Chand explains that since the 1980s, federal, state and local governments have each increasingly relied on nonprofits, and even private business, to implement public policy.
“This trend is not changing,” Chand states, “There is a push to provide publicly supported legal aid to immigrants who cannot afford an attorney in removal hearings. The reality is that most states and localities that do provide some legal aid to immigrants are going to expect ISOs to provide that service. Very few will actually create the equivalent of a public defender’s office for immigrants. If we as a society expect nonprofits to provide public services, then nonprofits need to be able to speak out on public policies.”
Educating the Next Generation of Nonprofit Leaders at Kent State
Chand explains that it’s important for current and future nonprofit managers to learn that they can engage in policy advocacy to a further extent than they may realize. He says that his research will undoubtedly influence his role as an educator.
“All faculty involved in the MPA program integrate their research into the classroom,” Chand says, “The MPA program has a nonprofit advocacy course in which we teach about the H-Election option. I will certainly use the findings of this study to remind students how important it is for nonprofits to advocate on behalf of vulnerable clients and how important it is for nonprofit managers to know the law on policy advocacy.”
Additionally, Chand notes, MPA students at Kent State have the opportunity to get involved with faculty research. Kent State MPA graduate, Lauren O’Keeffe, helped the researchers conduct the survey of ISOs in addition to work she completed on a previous study on ISOs and legal aid and co-authored a paper in Voluntas alongside faculty.
“The opportunity to work with students is one of the best parts of our job.”
Learn How You Can Affect Public Policy as a Nonprofit Leader at Kent State
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- Retrieved on October 22, 2021 from irs.gov/charities-non-profits/political-organizations
- Retrieved on October 22, 2021 from degruyter.com/document/doi/10.1515/npf-2020-0023/html?fbclid=IwAR2-qUecr_PGNad0lzF1vgZbnamDfs8Z2qxBOsJvnHVnTnUTYyXE7LmTkyQ
- Retrieved on October 22, 2021 from councilofnonprofits.org/taking-the-501h-election