Technical Assistance Question of the Week

Q: Our non-profit is sponsoring state legislation and we also publish a quarterly newsletter. In that newsletter we discuss our plans for this legislation, however we do not devote the entire newsletter to this topic. If we encourage our members to support our legislation by contacting their lawmakers in such an article, does that mean the entire cost of producing the newsletter (printing and postage) must be considered as a lobbying expense?

A: The scenario you are describing involves allocating costs for a mixed purpose expenditure. A Mixed Purpose Expenditure arises when you have a communication which includes lobbying but might also solicit funds for an organization, or involve other issues not related to lobbying. The regulations provide complicated rules for allocating the costs of mixed purpose communications among their various functions. The applicable rules depend generally on the interplay of two sets of factors: (1) how you classify the message (that is direct lobbying versus grassroots lobbying, non- lobbying or a mixture) and (2) how you classify the audience (are they members, nonmembers, both). It sounds like the newsletter will go to only members and will include some grassroots lobbying expenses. As such, the regulations provide that you may make a "reasonable " allocation of costs between the non- lobbying and lobbying purposes. You may want to calculate the cost of creating and mailing the entire newsletter and then divide that cost by the number of pages in your newsletter. You can allocate the cost of the pages dedicated to grassroots lobbying for your grassroots lobbying expenses/expenditures. In other words, if the newsletter costs $100 to create and mail out (unlikely I know), and there were 10 pages total but only two pages were for grassroots lobbying, then $20 should be reported as grassroots lobbying expenditures for this communication.

Remember the Membership Rule however, if a communication asking individuals to contact their legislators to express a view about legislation with a call to action (normally grassroots lobbying) is to members only, it can be counted as direct lobbying. A Member is anyone who contributes more than a nominal amount of time or money to an organization.

To summarize, if the newsletter with the grassroots lobbying page was sent to members only, the cost of creating that page would be attributed as a direct lobbying cost. If however, the newsletter went to the general public, the cost of the page would be counted as grassroots lobbying.