Alliance for Justice’s Bolder Advocacy team has decades of experience giving foundations and nonprofits confidence, tools, and resources for effectively advocating to advance their missions. To better answer a growing number of philanthropic advocacy questions, we recently revamped the “Focus on Foundations” section of our website. Philanthropic leaders let us know that two of our most helpful resources are our project specific and general support grant agreement templates.
In one of our signature “Focus on Foundations” fact sheets, we explain the downside of restrictive grant agreements. In this case, “restrictive” refers to grant restrictions that prevent 501(c)(3) grantees from lobbying (one form of advocating). Language that prohibits 501(c)(3) grantees from using grant funds for “any propaganda or attempt to influence legislation” is overly restrictive and may undermine grantees’ abilities to effectively and efficiently achieve goals.
Federal tax law does not require foundations to include such lobbying prohibitions in grants made to their public charity grantees. In fact, the law specifically allows foundations to make two types of grants that neither restrict advocacy and lobbying of grantees, nor create taxable expenditures. These two types of grants — general support grants and specific project grants — give grantees flexibility in the use of their funds (with general operating support grants providing the most flexibility). Therefore, restrictive grants are not necessary, because when these two safe harbors are applied properly, grantees can use foundation resources for their projects without sacrificing their ability to lobby and without exposing the foundation to tax liability. You can learn even more on this topic by reading our Philanthropy Advocacy Playbook.
Does your grant agreement prohibit lobbying? If so, do you know why, and do you want to continue that practice? Foundations often update their strategic plans, focus areas, and websites, but they do not always update their grant agreements.
Want to learn more? We can:
(1) Explain why a restrictive grant agreement is an option, not a requirement.
(2) Facilitate a conversation within a foundation, so everyone can be on the same page and have the confidence to use grant agreement language that is best for the foundation’s and grantees’ missions.
(3) Help foundations learn how word choice in grant agreements (as well as less formal documents and conversations) can subtly perpetuate a common — but incorrect — fear that advocacy and lobbying is off-limits or undesirable for nonprofits.
JOIN US & SHARE YOUR GRANT AGREEMENTS: Do you have grant agreements that do not restrict advocacy and lobbying of grantees? If so, can you share your language with us? Although our Bolder Advocacy grant agreement templates are helpful, foundation leaders appreciate peer-to-peer learning. So, we want to share real examples. That way, grant managers and other foundation leaders won’t need to reinvent the wheel on their own and can more easily support their grantees’ engaging in advocacy.
If you are interested in sharing grant agreement language, please contact our Director of Foundation Programs, Christine Reeves Strigaro, at email@example.com.
We also invite you to learn more about our work at Bolder Advocacy or schedule a training here.
Join us for a webinar on Tuesday, May 10 at 2pm ET to discuss unrestrictive grant agreement language.