Updated May 15, 2012  

Tax Status

More than 80% of the groups in the study (177) operate exclusively as nonprofit, tax-exempt organizations.¹⁵ According to Section 501(c)(3) of the Internal Revenue Code, these groups are restricted in the proportion of their activities and budgets they can devote to direct lobbying.¹⁶ These groups may not endorse or oppose particular candidates for public office, for example. These tax-exempt groups are not prohibited, however, from drawing on religious principles to conduct public education campaigns on issues or providing information from a religious perspective to policymakers. Donations to 501(c)(3) entities are tax deductible.

A relatively small number of the groups in the study (10, or 5%) are organized under Section 501(c)(4) of the tax code, which allows them to hire registered lobbyists and gives them greater leeway to engage in direct lobbying efforts in support of or against particular legislation. Donations to 501(c)(4) groups are not tax deductible.

Some 501(c)(3) tax-exempt organizations create companion 501(c)(4) entities that are allowed to engage in direct lobbying. However, the two organizations must remain legally distinct, and the 501(c)(3) may not fund activities of the 501(c)(4) that the 501(c)(3) would be prohibited from doing directly. Similarly, some 501(c)(4) organizations create companion educational foundations, which fall under section 501(c)(3) and can therefore receive tax-deductible donations. One-in-eight groups in the study (27, or 13%) have both 501(c)(3) and 501(c)(4) arms.

For a full list of groups and their tax status, see the online directory.

Footnotes: 

15 In June 2011, the Internal Revenue Service announced that it had revoked the tax-exempt status of approximately 275,000 organizations because the groups had not filed the required tax form for three consecutive years. Because the change in tax status occurred after the Pew Forum had completed its research, the report and online directory do not take these revocations into account. For more information, see the IRS press release at http://www.irs.gov/newsroom/article/0,,id=240239,00.html. (return to text) 

16 Groups that register as regular 501(c)(3) entities cannot devote a “substantial” part of their activities to “lobbying,” defined as activities in support of specific legislative acts or public referendums. Some nonprofit groups – but not churches or private foundations – can choose “h election” (501h), which is governed by an expenditure formula that allows greater lobbying effort as long as it meets specified limits and percentages. (return to text)