Internal:Public Policy/Taking positions on public policy and nonprofit-charity status

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Revision as of 03:58, 28 February 2014 by Econterms (talk | contribs) (→‎Tax rules: link to Internal Revenue Code 4911)
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The Public Policy Committee has a role to report to the Wikimedia DC board annually to confirm that the chapter is staying within the proper bounds of a tax-exempt 501(c)3 organization, by allocating small enough fractions of its time, resources, and effort. On this page we discuss the various dimensions of this and our procedure for verifying that we are in-bounds.

Tax rules

See the rules of Internal Revenue Code 4911 here: Internal_talk:Public_Policy_Committee_resolution

  • 501(c)3s may lobby as long as lobbying is not "substantial": IRS doc see p.7 on legislative activities.
  • this source says "501(c)3 Public Charities, including Community Foundations, have every right to advocate on behalf of policies they believe in. But, when nonprofits advocate for specific legislation (i.e. lobby), it may trigger specific rules and limits."
  • This guidance says that "501(c)(3) organizations can, and often should, lobby at all levels of government. Federal tax law has always permitted some lobbying by nonprofits."
  • Perhaps the potential committee should provide an analysis or specific proposal on this topic if and when becomes relevant. An IRS tax attorney may be on the committee. We do not in the near run have a specific proposal to do it, or to budget a penny for it.
  • Wikipedia has a clear helpful paragraph on this point. The IRS guidance is very clear here. We have to file a trivial form, Form 5768, if we take positions. The "expenditure test" seems to say that if the org spends approximately zero on lobbying, it is not at any risk. If its lobbying is not "substantial" timewise, it is not at risk. We'll be fine. A possible step is to assign an analysis of the Corporation's limits here to the Public Policy Committee, once it exists. And perhaps a policy proposal on keeping the risk to a negligible level. -- Econterms (talk) 21:53, 26 January 2014 (EST)
  • Wikimedia DC made the 501(h) election a few years ago, so we should be in the clear as you say. Thank you for the research! James Hare (talk) 22:45, 26 January 2014 (EST)

The things we have to verify for the Board

Wikimedia DC's Advisory committee policy, Article IV, sections 6(d) and 6(e) say:

6. Public Policy Committee
. . .
(d) Lobbying. The Committee shall not advocate for the election or defeat of a political candidate, and no substantial part of the Committee's activities may be dedicated to advocating for or against legislation.
(e) Insubstantial Part Analysis. The Committee shall conduct an annual analysis of the Corporation's activities to ensure that no substantial part of the Corporation's activity is dedicated to advocating for or against legislation, pursuant to Section 501(h) of the Internal Revenue Code.

So, annually, this committee should send to the board a statement that in the most recent year it did not advocate for the election or defeat of a political candidate, and that no substantial part of Wikimedia DC's activity was dedicated to advocating for or against legislation. This is certainly true. Let's develop a simple easy recipe to make a strong, convincing statement with evidence each year on this point so we can get to our main line of business.

Expenditures on public policy matters in 2012-2013
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