April 2017 Meeting: Lobbying vs. Advocacy: Massachusetts and Federal requirements

Dan O’Brien, Esq. and Karen Kent, CPA, gave a presentation about issues involved
with lobbying and advocacy by non-profit agencies in Massachusetts. Dan O’Brien,
Esq., is Vice President with The Brennan Group and has over twenty-five years of
public affairs experience in Massachusetts, including significant lobbying and lobbying
consulting experience. Dan has worked on a wide variety of issues in the areas of
higher education, financial services, and real estate and on behalf of Fortune 500
companies. He also served as a government relations professional in the Executive
Office of the Massachusetts Water Resource Authority for three years. Karen
Kent, CPA, is a Principal and a member of the Firm’s Executive Committee. Her
accounting and management consulting practice encompasses numerous clients in the
non-profit and real estate industries.  She also specializes in compliance-driven audits
and process implementation.

Some of the topics that they discussed are as follows: In this day and age — what do you
need to know about advocacy vs. lobbying to protect your organization’s 501(c)3
status?  Massachusetts vs. Federal rules reporting?    501(h) election vs. insubstantial
reporting on the 990? Tracking and reporting your staff, volunteers and organization’s
time costs? Do you, your staff, volunteers and consultants know how to manage your
advocacy to keep it separate from your lobbying efforts and stay within required limits?
The rules can be murky and the implementation of processes to manage, track, and
report your data can be messy.

First, it is important to define what acts constitutes lobbying and who is a lobbyist. On
the Federal level, a lobbyist is any individual who is either employed or retained by a
client for financial or other compensation, whose services include more than one
lobbying contract, and whose lobbying activates constitute 20 percent or more of his/her
time in services for that client over any 3-month period. Covered Federal officials
include members of Congress and their employees, committees, etc. and members of
the Executive branch. In Massachusetts, legislative lobbying is an act to influence
legislation including strategizing, planning, and research performed in connection to this
effort, and Executive lobbying is any act to influence the decision of any officer or
employee of the executive branch of the State. To be a lobbyist in legal terms, you
have to be compensated and you need to have direct contact with the official you are
trying to influence. Advocacy means speaking generally about an issues, but lobbying
involves try to advance specific legislation. If you have two or more communications
about an issue and meet the other thresholds (being compensated, etc.), then you need
to register as a lobbyist. If you write up a position paper for general education, then that
is not lobbying. If that activity is directed at advancing specific legislation, then it is
lobbying. If you or your organization belongs to an association or trade group that
lobbies, that does not make you a lobbyist.

If your agency directly hires a lobbyist, then both your agency and the lobbyist have to
register with the State or Federal government. There are hours worked and compensation
received thresholds which trigger the requirement to register as a lobbyist. The standards
are different for the State of Massachusetts and for the IRS. According to the IRS, there
are 2 types of lobbying: direct lobbying and grassroots lobbying. Direct lobbying is direct
communication concerning official action or legislation. Grassroots lobbying involves
asking the broader public to support certain causes or legislation. Reporting lobbying
activities to the IRS is not an easy task. You need to list exactly all of the costs
associated with the lobbying activities. There are different regulations for direct
lobbying and for grassroots lobbying. Check with the Secretary of State for the
Commonwealth, the Secretary of the State Senate, or the Office of the Clerk for the
U.S.House of Representatives for further information and clarification.