CNE Advocacy & Public Policy 3 — Questions and Answers
Question 1: A 501(c)(3) makes the 501(h) election. Under this election, the direct lobbying expenditure ceiling for an organization with $5 million in exempt-purpose expenditures is:
- $100,000
- $500,000
- $1,000,000
- $250,000 (Correct answer)
Correct answer: $250,000
Under 501(h), the direct lobbying ceiling is 20% of the first $500,000 of exempt-purpose expenditures, yielding $100,000 for the first tier, with a total cap of $1M; for $5M in expenditures the combined nongrassroots cap is $1,000,000 but the calculation yields $250,000 for the first $500K bracket — the actual ceiling depends on the sliding scale, with the total lobbying cap calculated per IRS table.
Question 2: A nonprofit executive testifies at a public legislative hearing about the impact of proposed budget cuts. This activity is generally classified as:
- Prohibited political activity
- Direct lobbying (Correct answer)
- Grassroots lobbying
- Nonpartisan public education
Correct answer: Direct lobbying
Testifying before a legislative committee about specific legislation is considered direct lobbying under IRS definitions.
Question 3: Which of the following best describes 'issue advocacy' as distinct from lobbying?
- Educating the public about a policy issue without calling for a specific legislative action (Correct answer)
- Urging constituents to call their senator about a specific bill
- Paying a contract lobbyist to represent the nonprofit at the statehouse
- Testifying before a legislative committee about pending legislation
Correct answer: Educating the public about a policy issue without calling for a specific legislative action
Issue advocacy raises awareness and educates about policy topics without expressly urging support or opposition to specific legislation.
Question 4: A 501(c)(4) social welfare organization is often used alongside a 501(c)(3) in an advocacy structure because the 501(c)(4) can:
- Accept tax-deductible donations in unlimited amounts
- Engage in unlimited lobbying as its primary activity (Correct answer)
- Endorse and contribute to federal political candidates
- Receive government grants without restriction
Correct answer: Engage in unlimited lobbying as its primary activity
501(c)(4) organizations may engage in lobbying as their primary activity as long as they operate for community benefit, unlike the substantial-part restriction on 501(c)(3)s.
Question 5: An effective power-mapping exercise in advocacy helps a nonprofit identify:
- The organization's annual lobbying budget
- Key decision-makers, their influencers, and the relationships between them (Correct answer)
- Compliance deadlines for lobbying registration
- The correct IRS form for lobbying disclosure
Correct answer: Key decision-makers, their influencers, and the relationships between them
Power mapping visualizes who holds decision-making authority and who can influence them, guiding advocacy strategy.
Question 6: Under the Lobbying Disclosure Act (LDA), which threshold triggers registration for a lobbying firm representing a nonprofit client?
- Any single lobbying contact
- Income of $3,000 or more for lobbying services in a quarter (Correct answer)
- Spending at least $25,000 on lobbying activities in a year
- Employing more than two registered lobbyists
Correct answer: Income of $3,000 or more for lobbying services in a quarter
Under the LDA, a lobbying firm must register if it receives $3,000 or more in income for lobbying activities in a quarterly period.
Question 7: What is 'earned media' in the context of nonprofit advocacy?
- Paid advertising placed in newspapers
- Coverage secured through relationships and newsworthiness rather than payment (Correct answer)
- Revenue generated from a nonprofit's newsletter
- In-kind advertising donated by media partners
Correct answer: Coverage secured through relationships and newsworthiness rather than payment
Earned media refers to unpaid press coverage obtained because the story or event is considered newsworthy by journalists.
CNE Advocacy & Public Policy 3
A 501(c)(3) makes the 501(h) election.
Under this election, the direct lobbying expenditure ceiling for an organization with $5 million in exempt-purpose expenditures is: