All you need to know about C3/C4 money
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Chrissy
Aug 27, 2008, 8:01:29 PM8/27/08
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Pulled from the Sierra Club website
http://clubhouse.sierraclub.org/administration/chapter-funding/ineligible-eligible.asp0x
Ineligible vs. Eligible Activities
Those activities that cannot be funded by The Sierra Club Foundation
-- and those that can.
[ ineligible | eligible ]
Part 1: INELIGIBLE ACTIVITIES – FUNDS NOT COVERED BY CGEP
The following are funding types that CANNOT be funded by TSCF.
1.) Non-Tax Deductible Activities
This kind of revenue is also referred to as "501(c)(4) money," "(c)(4)
money," or "lobbying" funds. 501(c)(4) and (c)(4) both refer to the
section of the Internal Revenue Code that defines charitable
organizations and activities for which donations are not tax-
deductible. The Sierra Club is a non-profit, 501(c)(4) organization.
This means that the Sierra Club is exempt from paying federal income
tax, but contributions made to the organization by individuals,
foundations or corporations, and membership dues, are not tax-
deductible.
The Sierra Club is not limited in the amount of lobbying it may
conduct and can freely advocate a particular position even on
controversial issues, as long as the issues are related to the primary
purpose of the organization. 501(c)(4) organizations may also engage
in political campaign activities, through an affiliated Political
Action Committee fund, although this cannot be the primary purpose of
the organization. Private foundations cannot give contributions for
this type of work, and money from The Sierra Club Foundation (TSCF)
cannot be used for these purposes. While 501(c)(4) money can be spent
for both tax-deductible and non tax-deductible purposes, it is best if
the money is applied to 501(c)(4) work. The Sierra Club applies this
money to activities such as legislative lobbying, certain
administrative electoral activities (other electoral activities can be
only paid for with PAC funds), and Sierra Club internal business,
which cannot be funded with tax-deductible donations.
Please note that there is nothing wrong with spending 501(c)(4) funds
to further your 501(c)(4) goals. What is important is not to spend
501(c)(4) money on activities that can be paid for legally with 501(c)
(3) money.
How Non Tax-Deductible Funds Can Be Used:
LOBBYING
This is defined as any attempt to influence legislation through
either: a) direct communications with any member or staff of a
legislative body (direct lobbying); or b) efforts to educate the
general public about a legislative issue, expressing a position on
that issue, and urging them to contact a member or staff of a
legislative body (indirect lobbying). "Legislation" includes any act,
bill, resolution or similar item by Congress, a state legislature, or
local governing body or by the public, such as a referendum,
constitutional amendment or initiative. Actions to influence the
introduction of legislation, as well as support for or opposition to
any specific legislative proposal even when the bill has not yet been
introduced, constitute lobbying
Direct Lobbying vs. Indirect Lobbying
Direct Lobbying is an attempt to influence legislation by
communicating with members or staff of a legislative body (Congress, a
state legislature, or local council) or a government employee who
participates in the legislative process to encourage them to
introduce, support, oppose, repeal, or otherwise influence
legislation. The principal purpose of the communication must be to
influence legislation. Telephone calls, letters, and office visits to
a member of Congress, testimony at a public hearing (unless in
response to a written request by a legislative committee), or
publication of materials to encourage passage of a bill are lobbying
activities if they contain all three of the following elements:
1) reference to specific legislation;
2) reflection of a view on the legislation; AND
3) are addressed or given to a legislator, and employee of a
legislative body, or other government official participating in the
formulation of legislation.
These activities are considered tax-deductible if only two of the
above elements are included.
Definitions:
"Specific Legislation"– Specific Legislation includes both legislation
that has already been introduced in a legislative body and specific
legislative proposals that the organization either supports or
opposes. For example, reference to legislation proposed or adopted in
one state that urges its adoption in another state constitutes a
specific legislative proposal in the other state even though no such
bill has been introduced there. Legislation may be identified either
by its formal name or by a term that has been widely used in
connection with specific pending legislation, e.g. "the President’s
plan for a drug-free America." Legislation may also be identified
merely by its content and effect.
Ballot Measures – Communications with the general public to influence
the passage of initiatives and referenda that refer to the specific
ballot measure and reflect a view on the measure are also considered
direct lobbying.
Executive Appointments - Activity to influence a legislature’s vote on
an executive appointee such as a Senate confirmation of a judicial
appointment, is direct lobbying.
Indirect (Grassroots) Lobbying is communicating with the general
public, directly or through Sierra Club members, to encourage them to
take action with respect to specific legislation. For example, sending
letters to a senator’s constituents requesting that they write to the
senator to oppose a piece of legislation is indirect lobbying if the
letters contain all three of the following elements:
1) reference to specific legislation;
2) reflection of a view on the legislation; AND
3) a "call to action" such as:
encouraging recipients to contact legislators;
providing a legislator's name, address, and phone number;
providing a petition tear-off postcard to send to a legislator; OR
identifying a legislator as being opposed to a particular view,
undecided, the recipient's legislator, or a member of the committee or
subcommittee that will consider the legislation.
These activities are considered tax-deductible if only two of the
above elements are included.
REMEMBER: Identifying the major sponsor of legislation is NOT a call
to action.
TRAINING
Trainings which include activist training in lobbying or political
skills, encourage specific legislative action, or teach general
electoral skills are not eligible for tax-deductible funding. The
Sierra Club must use 501(c)(4) funds when training the public in
general lobbying skills, even when the training is not directed toward
a specific legislative action. Training of skills specific to the
Sierra Club such as a Chapter Chair training, must also be paid for
with 501(c)(4) funds.
MEMBERSHIP DRIVES, FUNDRAISING DRIVES AND ADMINISTRATIVE COSTS OF
501(C)(4) ENTITIES
Includes organizational meetings or other costs of running or
maintaining the organization; including pamphlets, advertising, or
newsletter articles whose primary purpose is new member solicitation
or solicitation of c4 funds for the Sierra Club.
MEMBER COMMUNICATION
Communicating with Sierra Club members regarding Sierra Club
endorsements.
OFFICE EQUIPMENT
Purchases and repairs must be paid for with 501(c)(4) funds because
equipment is used to conduct both tax-deductible and non tax-
deductible activities.
2) Voter Education
EVEC, or the Environmental Voter Education Campaign, is the Sierra
Club’s project to hold policy-makers accountable for their
environmental positions and to ensure that the public is aware of the
candidates’ positions as they prepare to vote. The goal is to educate
the American public about the importance of environmental issues, the
voting records and positions of candidates, and create demand for
environmentally responsible leaders. The campaign focuses on the
United States Congress and, when appropriate, the Presidency. For more
information, see Environmental Voter Education Campaign (EVEC)
Compliance Manual.
This manual is available upon request from OEP and is also located at
the following website: http://clubhouse.sierraclub.org/go/policies/compliance/EVECguidelines/
3) Sierra Club Political Committee (SCPC)
Because the Sierra Club, under federal law, cannot make political
contributions from its corporate account (Sierra Club funds), it has
established a Political Action Committee (PAC) to administer its
segregated funds. The PAC is called the Sierra Club Political
Committee (SCPC), and its segregated funds are held in a bank in San
Francisco. Sierra Club chapters may also set up a state PAC
administered by the chapter political committee to support state and
local candidates. These state PACs may not engage in ANY federal
election campaign activities.
This kind of revenue is a special form of non tax-deductible
contribution to a segregated fund. It is restricted for use in
electioneering activities and is managed by the SCPC. Careful
reporting and management of this money is particularly important as it
is governed by separate, and often very different, state and federal
campaign finance laws. Because of the complexity of campaign finance
laws, the level of scrutiny of such expenditures, and the potentially
serious consequences for mismanaging these funds (including criminal
penalties), only the Sierra Club Political Committee (SCPC) (for
federal campaigns) or the Chapter Director or Chapter Chair (for state
or local campaigns), may make spending decisions regarding these
funds. No electoral expenses may be incurred without their approval.
When in doubt about whether an expense item is an electoral expense,
contact one of these individuals.
How SCPC Funds Can Be Used
These funds can be used for election work that focuses specifically on
the support of or opposition to a specific candidate. This may include
speaking on behalf of or against a candidate, printing and/or
distributing literature about a candidate, holding a press conference
about the elections, or a variety of other election-related
activities.
It is the responsibility of each chapter to know and be in compliance
with its own state and local election laws. Therefore, all chapters
must obtain the services of an attorney who will ensure that the
chapter is in compliance with appropriate state and local election
laws. This person will function as the state and local "Compliance
Officer" for the chapter.
For more information, see Sierra Club Political Committee Compliance
Guidelines, Fall 2003. These guidelines can be found on the Internet
at: http://clubhouse.sierraclub.org/leaders/OEP/SCPC2001.asp.
PART 2: FUNDING 501(c)(3) REIMBURSABLE ACTIVITIES
The Sierra Club Foundation
The Sierra Club Foundation (TSCF) is a public charity whose mission is
to provide financial support to the Sierra Club and other
environmental organizations for tax deductible work. TSCF funds a
range of environmental projects which fall into the three general
categories of public education, litigation, and training.
Mission Statement:
"The mission of The Sierra Club Foundation is to advance the
preservation and protection of the natural environment by empowering
the citizenry, especially democratically-based grassroots
organizations, with charitable resources to further the cause of
environmental protection. The Sierra Club is the vehicle through which
The Sierra Club Foundation generally fulfills its charitable mission."
The CGEP works directly with TSCF to manage the tax-deductible funds
available to the chapters and groups through their advised funds with
TSCF. The following explains what tax-deductible funds are and how
they can be used to further the mission of TSCF.
Please note that there is nothing wrong with spending 501(c)(4) funds
to further your 501(c)(4) goals. What is important is not to spend
501(c)(4) money on activities that can be paid for legally with 501(c)
(3) money.
The following activities CAN be funded by TSCF
Tax-deductible Funds
Tax-deductible funds are also referred to as "501(c)(3) money," "(c)
(3) money," or "foundation money." 501(c)(3) and (c)(3) both refer to
the section of the Internal Revenue Code that defines charitable
organizations and activities which can be supported with tax-
deductible contributions. The Sierra Club Foundation (TSCF) is a non-
profit, charitable 501(c)(3) organization. This means that TSCF is
exempt from federal income tax; it engages in educational, religious,
scientific, or other charitable activities (environmental); and
contributions or grants by individuals, foundations, or corporations
to TSCF are deductible for federal income tax purposes under section
170(b)(1)(A)(vi) of the Code. The Sierra Club must apply to TSCF for
money to reimburse expenses of Sierra Club projects that qualify as
tax-deductible activity expenses. This money must be used only for
charitable/educational purposes and in furtherance of TSCF’s mission,
and these purposes must be documented in order to be reimbursed with
these funds.
How Tax-Deductible Funds Can Be Used:
ADMINISTRATIVE ADVOCACY/CONSERVATION ACTION
Conservation action activities are defined as efforts to implement
existing laws to protect the natural and human environment for the
benefit of the general public. This includes meeting and working with
government agencies charged with implementing environmental laws (for
example, members of the executive branch of the government) and any
activity that does not advocate the enactment or introduction of
pending (introduced) legislation or voter initiatives. This
administrative "advocacy" is not considered lobbying in the IRS sense
of legislative lobbying. The expenses for these visits, including
materials, travel, etc., can be paid for with 501(c)(3) dollars.
Examples of conservation action campaigns include:
Protection of human health from unclean air and water and from
exposure to toxic or hazardous chemicals in our communities;
The conservation of open space, fish and wildlife, and public lands
for recreational use and wildlife habitat;
Efforts designed to reduce the consumption of non-renewable resources,
such as oil and gas, as well as to increase the re-use and recycling
of materials;
Encouraging the development of urban and suburban sustainable models
to reduce resource use, consumption of valuable natural and
agricultural lands, and the use of automobiles; and
Relief of the disproportionate burden on poor and minority communities
to accept the siting of polluting industries and waste disposal sites
within their boundaries.
Examples of more specific conservation outreach activities include:
Planning of non-legislative conservation campaigns, including research
and reports. As the issues addressed become more complicated, an
effective tactic is for advocates to research the issues to be
addressed and to report the results to the news media, administrative
decision-makers, and to the public at large.
Participating in the administrative decision-making process. Direct
involvement by staff and volunteers ensures that administrative
decision-makers will be forced to consider an environmental
perspective in their process. Expert technical assistance is sometimes
needed to address complex topics.
Direct administrative agency lobbying. This includes one-on-one
meetings with administrative decision-makers to advocate the
implementation of environmental and public health laws. It can also
include addressing the concerns of administrative decision-makers and
urging them to meet the challenges outside of the formal agency
processes.
Citizen training, organizing, and mobilization. These activities
involve educating interested citizens about environmental issues and
how to most effectively become involved in administrative decision-
making; and alerting the public to opportunities to become involved in
non-legislative decision-making processes.
REMEMBER: Avoid meetings with elected officials where the topic either
does include or might include legislation or legislative proposals.
Conversations about legislation or legislative proposals are
legislative lobbying - which is not a tax-deductible activity. It is
okay to speak with legislators about implementing existing laws or
about issues of broad community concern. An example would be one could
meet with a legislator to explain the benefits of recycling. However,
one could not then urge the legislator to co-sponsor or introduce or
vote for a bottle bill.
PUBLIC EDUCATION
Educating members of the media or the general public about nature,
environmental problems, and the need to protect the human and natural
environment. Educational is defined as a "full and fair exposition of
the facts." Outings where significant training and/or learning occurs
are also activities that can be reimbursed with tax-deductible funds.
Public education can include education about the impacts of passing
new legislation, as long as this education does not include certain
prohibited components that constitute lobbying under IRS rules.
PUBLICATIONS OR PORTIONS THEREOF
Materials which serve to educate the public, but which do not advocate
support for a specific legislative proposal, can be funded with 501(c)
(3) money. If a publication contains any electioneering activities,
the entire publication does not qualify for 501(c)(3) funding (see
"Electioneering" below).
Public education ads or other mass distributed materials need to be
reviewed in advance of production by the Office of Environmental
Programs. Send e-mails to Compliance Review:
complian...@sierraclub.org. Turn around time is approximately 48
hours.
1 ) Brochures cannot contain any legislative lobbying, Sierra Club
membership solicitations, Sierra Club internal business, or
electioneering information.
2 ) Newsletters Copies of chapter and group newsletters should be
submitted for review and reimbursement. The newsletter may include
both lobbying and educational information, but only that portion which
is educational can be funded with 501(c)(3) money. When including the
cost of producing a newsletter in a budget, only a portion of the cost—
that percentage which is tax deductible (c3)—can be requested. In
order to be considered educational, a full and fair exposition of the
facts must be presented. Efforts which promote unsubstantiated views
and/or propaganda are not considered educational.
For more information see Newsletter Reimbursement Guidelines.
Electioneering Electioneering is a Sierra Club Political Committee
Activity (SCPC, page 11) that directly advocates for the election or
defeat of a candidate or political party. Words and phrases such as:
"vote for," "endorse," "support," "oppose," "defeat," "reject" are all
examples of electioneering when they are used in association with a
candidate for elected office at any level (national, state, local) or
political party. It also includes the use of phrases such as "vote pro-
environment" or "defeat the polluters" when accompanied by references
to clearly identified candidates and their positions. Click here for
more information on electioneering.
Same Specific Subject The IRS has determined that if a lobbying
article appears in an edition of a newsletter or publication, all
other articles on the same specific subject in that edition, even if
they are purely educational, will be considered lobbying
communications. For example, if an article appears on the
reauthorization of the Endangered Species Act, and it contains a
legislative call to action for the reader, all other Endangered
Species Act articles that appear in the same edition will be
considered lobbying communications and will be ineligible for
reimbursement with tax-deductible funds from The Sierra Club
Foundation (TSCF).
If legislative leader lists are included in a newsletter, these can
taint all articles regarding legislation and make them ineligible for
501(c)(3) funding even if there is no call to action. In that case the
same specific subject rule would still be applied to the remainder of
the newsletter.
REMEMBER: Materials that are originally created using 501(c)(3) funds
cannot subsequently be used for direct lobbying or other non-501(c)(3)
activities, unless the original material was distributed to a wide
market and made available to the general public. The original intent
must have been for public education. Please work with OEP before using
501(c)(3) produced materials for other purposes than originally
planned. 501(c)(3) distribution must be documented before any approval
will be given.
Articles Appropriate for Tax-Deductible Funding:
Wilderness/wildlife/conservation education, such as informational
articles on plant life and wildlife, geologic phenomena, recycling,
energy use, and transportation issues.
Federal agency news such as timber harvest, proposed development on or
near wildlife refuges or national parks, and water rights issues.
Photographs or artwork which convey an educational or otherwise
charitable message.
Articles that teach skills to readers.
Reviews of books and other publications of interest to the general
public.
Leadership lists which provide a resource to the reader, including the
names, addresses, and phone numbers of an organization’s leaders.
Reports of past and future service trips and Inner City Outings trips,
and educational conferences, workshops, etc. If meetings/workshops are
open to the public, announce it in the article.
Articles that encourage readers to contact an administrative body such
as a water district or agency regarding existing environmental laws.
Informational articles on legislative matters, which do not contain
lobbying elements.
See Newsletter Reimbursement Guidelines for more information.
RESEARCH
Includes the investigation and preparation of facts for objective
analysis and study, such as timber harvest data and geological
analysis.
PUBLIC INTEREST LITIGATION
Defined as researching, initiating, and prosecuting public interest
lawsuits to enforce the existing spectrum of environmental laws.
Enforcement actions brought by the Sierra Club at the state and local
level serve to protect the quality of life in local communities, air
and water, state and local parks and forests, and fisheries and
wildlife resources. They ensure that public entities honestly and
openly consider the environmental consequences of their decisions.
These lawsuits also force public agencies and private companies to
properly store, handle and dispose of hazardous and toxic materials.
The lawsuits also ensure that public utilities, when formulating their
energy policies, use the most rigorous scientific and economic
analyses and thereby fully consider the environmental costs of
proposed choices.
Charitable funds can be used to pay fees for legal services provided
by outside lawyers who represent the Sierra Club in litigation. In
some circumstances, funds are used to pay fees for legal services when
the Sierra Club is not a litigant but when the Sierra Club’s mission
and the goals of the Sierra Club are advanced as a result of the
particular case (Public Interest Litigation project approval
process).
SKILLS TRAINING, WORKSHOPS, CONFERENCES, PUBLIC EVENTS, MEETINGS, AND
SEMINARS
Includes issue education and training in leadership skills,
conservation skills, project planning and evaluation, and how to
conduct public campaigns where training is not how to work for or
against a legislative proposal. By agreement with TSCF, 501(c)(3)
funds cannot be used to train people in lobbying skills, even when
there are no instructions or information about a specific lobbying
campaign.
All presenters must adhere to the following guidelines:
The presenter/training may not refer to or provide any information
about the Sierra Club’s electoral (EVEC) and political program.
Specifically, there should be no discussion of SCPC, the Club’s
endorsements, or any electoral campaign activity. It is also important
not to link any 501(c)(3) work to upcoming elections. Such statements
as "we are doing x in January in order to influence the outcome of the
November election" are prohibited. Activities supported with 501(c)(3)
funding are never linked to election-related activities, so such
statements are incorrect as well as prohibited. If election related
questions arise during your session, politely explain that this
training is educational, not political.
When planning the event, be careful how you structure the meeting if
it will contain both 501(c)(3) and 501(c)(4) aspects. Set the agenda
to have a clear break between the 501(c)(3) and 501(c)(4) sections and
group the 501(c)(3) sections together. Don’t try a tag team approach–
this is when the host of an event educates the public about a
legislative matter avoiding a legislative call to action, and then
later arranges for a speaker or member of the audience to urge the
audience to contact their legislator. This tactic is considered
lobbying by the IRS. Ensure a definable break between public education
events and any other business of the Sierra Club, such as fundraising,
membership recruitment, and organizational business.
Run a general skills training workshop, not an organization-specific
workshop. If your workshop is on membership development, teach it as a
skill useful for any person and any organization, not just on how to
increase the Sierra Club’s membership.
REMEMBER: When distributing educational materials paid for with
charitable funds at a public event, i.e. tabling at a state or county
fair, Sierra Club Membership Applications cannot be displayed or
distributed if you pay for the event with 501(c)(3) funds. This would
be considered membership solicitation, which can only be sponsored by
501(c)(4) funds. You must use 501(c)(4) funds to pay for the booth
rental in order to be able to recruit membership and distribute
educational brochures.
It is important to give these guidelines to the presenters in writing
– click here for "Sample Speaker Memo."
GRANTS
To charitable 501(c)(3) organizations whose work furthers the mission
of TSCF.
SOCIAL WELFARE
Activities which promote social welfare and further the common good.
Activities such as Inner City Outings qualify for tax-deductible
funding under this category.
LAND PRESERVATION
The Sierra Club is not equipped to purchase land, but may assist other
charitable organizations in land preservation efforts such as
maintaining trails.
MEDIA
Press conferences, public service announcements, and other
communication vehicles that are educational and do not include a call
to action are eligible for tax-deductible fund reimbursement. Certain
rules apply to paid advertisements when a vote is pending. Contact
complian...@sierraclub.org if you have further questions.
CHARITABLE STAFF TIME
The work completed by Sierra Club staff on any activities related to
charitable activities is tax-deductible. For example, this may include
time spent on a non-legislative sprawl campaign or planning a
conference that focuses on alternative energy. Click here for more
information on staff time.
ADMINISTRATIVE EXPENSES
Both administrative staff time and office administrative expenses
(such as rent, phone, insurance, etc) related to program activities
that support c3 work can be paid for with tax-deductible funds. Please
see page 30 for more information on this process.
Sampler of 501(c)(4) vs. 501(c)(3) Work in the Sierra Club
http://clubhouse.sierraclub.org/administration/chapter-funding/ineligible-eligible.asp0x
Ineligible vs. Eligible Activities
Those activities that cannot be funded by The Sierra Club Foundation
-- and those that can.
[ ineligible | eligible ]
Part 1: INELIGIBLE ACTIVITIES – FUNDS NOT COVERED BY CGEP
The following are funding types that CANNOT be funded by TSCF.
1.) Non-Tax Deductible Activities
This kind of revenue is also referred to as "501(c)(4) money," "(c)(4)
money," or "lobbying" funds. 501(c)(4) and (c)(4) both refer to the
section of the Internal Revenue Code that defines charitable
organizations and activities for which donations are not tax-
deductible. The Sierra Club is a non-profit, 501(c)(4) organization.
This means that the Sierra Club is exempt from paying federal income
tax, but contributions made to the organization by individuals,
foundations or corporations, and membership dues, are not tax-
deductible.
The Sierra Club is not limited in the amount of lobbying it may
conduct and can freely advocate a particular position even on
controversial issues, as long as the issues are related to the primary
purpose of the organization. 501(c)(4) organizations may also engage
in political campaign activities, through an affiliated Political
Action Committee fund, although this cannot be the primary purpose of
the organization. Private foundations cannot give contributions for
this type of work, and money from The Sierra Club Foundation (TSCF)
cannot be used for these purposes. While 501(c)(4) money can be spent
for both tax-deductible and non tax-deductible purposes, it is best if
the money is applied to 501(c)(4) work. The Sierra Club applies this
money to activities such as legislative lobbying, certain
administrative electoral activities (other electoral activities can be
only paid for with PAC funds), and Sierra Club internal business,
which cannot be funded with tax-deductible donations.
Please note that there is nothing wrong with spending 501(c)(4) funds
to further your 501(c)(4) goals. What is important is not to spend
501(c)(4) money on activities that can be paid for legally with 501(c)
(3) money.
How Non Tax-Deductible Funds Can Be Used:
LOBBYING
This is defined as any attempt to influence legislation through
either: a) direct communications with any member or staff of a
legislative body (direct lobbying); or b) efforts to educate the
general public about a legislative issue, expressing a position on
that issue, and urging them to contact a member or staff of a
legislative body (indirect lobbying). "Legislation" includes any act,
bill, resolution or similar item by Congress, a state legislature, or
local governing body or by the public, such as a referendum,
constitutional amendment or initiative. Actions to influence the
introduction of legislation, as well as support for or opposition to
any specific legislative proposal even when the bill has not yet been
introduced, constitute lobbying
Direct Lobbying vs. Indirect Lobbying
Direct Lobbying is an attempt to influence legislation by
communicating with members or staff of a legislative body (Congress, a
state legislature, or local council) or a government employee who
participates in the legislative process to encourage them to
introduce, support, oppose, repeal, or otherwise influence
legislation. The principal purpose of the communication must be to
influence legislation. Telephone calls, letters, and office visits to
a member of Congress, testimony at a public hearing (unless in
response to a written request by a legislative committee), or
publication of materials to encourage passage of a bill are lobbying
activities if they contain all three of the following elements:
1) reference to specific legislation;
2) reflection of a view on the legislation; AND
3) are addressed or given to a legislator, and employee of a
legislative body, or other government official participating in the
formulation of legislation.
These activities are considered tax-deductible if only two of the
above elements are included.
Definitions:
"Specific Legislation"– Specific Legislation includes both legislation
that has already been introduced in a legislative body and specific
legislative proposals that the organization either supports or
opposes. For example, reference to legislation proposed or adopted in
one state that urges its adoption in another state constitutes a
specific legislative proposal in the other state even though no such
bill has been introduced there. Legislation may be identified either
by its formal name or by a term that has been widely used in
connection with specific pending legislation, e.g. "the President’s
plan for a drug-free America." Legislation may also be identified
merely by its content and effect.
Ballot Measures – Communications with the general public to influence
the passage of initiatives and referenda that refer to the specific
ballot measure and reflect a view on the measure are also considered
direct lobbying.
Executive Appointments - Activity to influence a legislature’s vote on
an executive appointee such as a Senate confirmation of a judicial
appointment, is direct lobbying.
Indirect (Grassroots) Lobbying is communicating with the general
public, directly or through Sierra Club members, to encourage them to
take action with respect to specific legislation. For example, sending
letters to a senator’s constituents requesting that they write to the
senator to oppose a piece of legislation is indirect lobbying if the
letters contain all three of the following elements:
1) reference to specific legislation;
2) reflection of a view on the legislation; AND
3) a "call to action" such as:
encouraging recipients to contact legislators;
providing a legislator's name, address, and phone number;
providing a petition tear-off postcard to send to a legislator; OR
identifying a legislator as being opposed to a particular view,
undecided, the recipient's legislator, or a member of the committee or
subcommittee that will consider the legislation.
These activities are considered tax-deductible if only two of the
above elements are included.
REMEMBER: Identifying the major sponsor of legislation is NOT a call
to action.
TRAINING
Trainings which include activist training in lobbying or political
skills, encourage specific legislative action, or teach general
electoral skills are not eligible for tax-deductible funding. The
Sierra Club must use 501(c)(4) funds when training the public in
general lobbying skills, even when the training is not directed toward
a specific legislative action. Training of skills specific to the
Sierra Club such as a Chapter Chair training, must also be paid for
with 501(c)(4) funds.
MEMBERSHIP DRIVES, FUNDRAISING DRIVES AND ADMINISTRATIVE COSTS OF
501(C)(4) ENTITIES
Includes organizational meetings or other costs of running or
maintaining the organization; including pamphlets, advertising, or
newsletter articles whose primary purpose is new member solicitation
or solicitation of c4 funds for the Sierra Club.
MEMBER COMMUNICATION
Communicating with Sierra Club members regarding Sierra Club
endorsements.
OFFICE EQUIPMENT
Purchases and repairs must be paid for with 501(c)(4) funds because
equipment is used to conduct both tax-deductible and non tax-
deductible activities.
2) Voter Education
EVEC, or the Environmental Voter Education Campaign, is the Sierra
Club’s project to hold policy-makers accountable for their
environmental positions and to ensure that the public is aware of the
candidates’ positions as they prepare to vote. The goal is to educate
the American public about the importance of environmental issues, the
voting records and positions of candidates, and create demand for
environmentally responsible leaders. The campaign focuses on the
United States Congress and, when appropriate, the Presidency. For more
information, see Environmental Voter Education Campaign (EVEC)
Compliance Manual.
This manual is available upon request from OEP and is also located at
the following website: http://clubhouse.sierraclub.org/go/policies/compliance/EVECguidelines/
3) Sierra Club Political Committee (SCPC)
Because the Sierra Club, under federal law, cannot make political
contributions from its corporate account (Sierra Club funds), it has
established a Political Action Committee (PAC) to administer its
segregated funds. The PAC is called the Sierra Club Political
Committee (SCPC), and its segregated funds are held in a bank in San
Francisco. Sierra Club chapters may also set up a state PAC
administered by the chapter political committee to support state and
local candidates. These state PACs may not engage in ANY federal
election campaign activities.
This kind of revenue is a special form of non tax-deductible
contribution to a segregated fund. It is restricted for use in
electioneering activities and is managed by the SCPC. Careful
reporting and management of this money is particularly important as it
is governed by separate, and often very different, state and federal
campaign finance laws. Because of the complexity of campaign finance
laws, the level of scrutiny of such expenditures, and the potentially
serious consequences for mismanaging these funds (including criminal
penalties), only the Sierra Club Political Committee (SCPC) (for
federal campaigns) or the Chapter Director or Chapter Chair (for state
or local campaigns), may make spending decisions regarding these
funds. No electoral expenses may be incurred without their approval.
When in doubt about whether an expense item is an electoral expense,
contact one of these individuals.
How SCPC Funds Can Be Used
These funds can be used for election work that focuses specifically on
the support of or opposition to a specific candidate. This may include
speaking on behalf of or against a candidate, printing and/or
distributing literature about a candidate, holding a press conference
about the elections, or a variety of other election-related
activities.
It is the responsibility of each chapter to know and be in compliance
with its own state and local election laws. Therefore, all chapters
must obtain the services of an attorney who will ensure that the
chapter is in compliance with appropriate state and local election
laws. This person will function as the state and local "Compliance
Officer" for the chapter.
For more information, see Sierra Club Political Committee Compliance
Guidelines, Fall 2003. These guidelines can be found on the Internet
at: http://clubhouse.sierraclub.org/leaders/OEP/SCPC2001.asp.
PART 2: FUNDING 501(c)(3) REIMBURSABLE ACTIVITIES
The Sierra Club Foundation
The Sierra Club Foundation (TSCF) is a public charity whose mission is
to provide financial support to the Sierra Club and other
environmental organizations for tax deductible work. TSCF funds a
range of environmental projects which fall into the three general
categories of public education, litigation, and training.
Mission Statement:
"The mission of The Sierra Club Foundation is to advance the
preservation and protection of the natural environment by empowering
the citizenry, especially democratically-based grassroots
organizations, with charitable resources to further the cause of
environmental protection. The Sierra Club is the vehicle through which
The Sierra Club Foundation generally fulfills its charitable mission."
The CGEP works directly with TSCF to manage the tax-deductible funds
available to the chapters and groups through their advised funds with
TSCF. The following explains what tax-deductible funds are and how
they can be used to further the mission of TSCF.
Please note that there is nothing wrong with spending 501(c)(4) funds
to further your 501(c)(4) goals. What is important is not to spend
501(c)(4) money on activities that can be paid for legally with 501(c)
(3) money.
The following activities CAN be funded by TSCF
Tax-deductible Funds
Tax-deductible funds are also referred to as "501(c)(3) money," "(c)
(3) money," or "foundation money." 501(c)(3) and (c)(3) both refer to
the section of the Internal Revenue Code that defines charitable
organizations and activities which can be supported with tax-
deductible contributions. The Sierra Club Foundation (TSCF) is a non-
profit, charitable 501(c)(3) organization. This means that TSCF is
exempt from federal income tax; it engages in educational, religious,
scientific, or other charitable activities (environmental); and
contributions or grants by individuals, foundations, or corporations
to TSCF are deductible for federal income tax purposes under section
170(b)(1)(A)(vi) of the Code. The Sierra Club must apply to TSCF for
money to reimburse expenses of Sierra Club projects that qualify as
tax-deductible activity expenses. This money must be used only for
charitable/educational purposes and in furtherance of TSCF’s mission,
and these purposes must be documented in order to be reimbursed with
these funds.
How Tax-Deductible Funds Can Be Used:
ADMINISTRATIVE ADVOCACY/CONSERVATION ACTION
Conservation action activities are defined as efforts to implement
existing laws to protect the natural and human environment for the
benefit of the general public. This includes meeting and working with
government agencies charged with implementing environmental laws (for
example, members of the executive branch of the government) and any
activity that does not advocate the enactment or introduction of
pending (introduced) legislation or voter initiatives. This
administrative "advocacy" is not considered lobbying in the IRS sense
of legislative lobbying. The expenses for these visits, including
materials, travel, etc., can be paid for with 501(c)(3) dollars.
Examples of conservation action campaigns include:
Protection of human health from unclean air and water and from
exposure to toxic or hazardous chemicals in our communities;
The conservation of open space, fish and wildlife, and public lands
for recreational use and wildlife habitat;
Efforts designed to reduce the consumption of non-renewable resources,
such as oil and gas, as well as to increase the re-use and recycling
of materials;
Encouraging the development of urban and suburban sustainable models
to reduce resource use, consumption of valuable natural and
agricultural lands, and the use of automobiles; and
Relief of the disproportionate burden on poor and minority communities
to accept the siting of polluting industries and waste disposal sites
within their boundaries.
Examples of more specific conservation outreach activities include:
Planning of non-legislative conservation campaigns, including research
and reports. As the issues addressed become more complicated, an
effective tactic is for advocates to research the issues to be
addressed and to report the results to the news media, administrative
decision-makers, and to the public at large.
Participating in the administrative decision-making process. Direct
involvement by staff and volunteers ensures that administrative
decision-makers will be forced to consider an environmental
perspective in their process. Expert technical assistance is sometimes
needed to address complex topics.
Direct administrative agency lobbying. This includes one-on-one
meetings with administrative decision-makers to advocate the
implementation of environmental and public health laws. It can also
include addressing the concerns of administrative decision-makers and
urging them to meet the challenges outside of the formal agency
processes.
Citizen training, organizing, and mobilization. These activities
involve educating interested citizens about environmental issues and
how to most effectively become involved in administrative decision-
making; and alerting the public to opportunities to become involved in
non-legislative decision-making processes.
REMEMBER: Avoid meetings with elected officials where the topic either
does include or might include legislation or legislative proposals.
Conversations about legislation or legislative proposals are
legislative lobbying - which is not a tax-deductible activity. It is
okay to speak with legislators about implementing existing laws or
about issues of broad community concern. An example would be one could
meet with a legislator to explain the benefits of recycling. However,
one could not then urge the legislator to co-sponsor or introduce or
vote for a bottle bill.
PUBLIC EDUCATION
Educating members of the media or the general public about nature,
environmental problems, and the need to protect the human and natural
environment. Educational is defined as a "full and fair exposition of
the facts." Outings where significant training and/or learning occurs
are also activities that can be reimbursed with tax-deductible funds.
Public education can include education about the impacts of passing
new legislation, as long as this education does not include certain
prohibited components that constitute lobbying under IRS rules.
PUBLICATIONS OR PORTIONS THEREOF
Materials which serve to educate the public, but which do not advocate
support for a specific legislative proposal, can be funded with 501(c)
(3) money. If a publication contains any electioneering activities,
the entire publication does not qualify for 501(c)(3) funding (see
"Electioneering" below).
Public education ads or other mass distributed materials need to be
reviewed in advance of production by the Office of Environmental
Programs. Send e-mails to Compliance Review:
complian...@sierraclub.org. Turn around time is approximately 48
hours.
1 ) Brochures cannot contain any legislative lobbying, Sierra Club
membership solicitations, Sierra Club internal business, or
electioneering information.
2 ) Newsletters Copies of chapter and group newsletters should be
submitted for review and reimbursement. The newsletter may include
both lobbying and educational information, but only that portion which
is educational can be funded with 501(c)(3) money. When including the
cost of producing a newsletter in a budget, only a portion of the cost—
that percentage which is tax deductible (c3)—can be requested. In
order to be considered educational, a full and fair exposition of the
facts must be presented. Efforts which promote unsubstantiated views
and/or propaganda are not considered educational.
For more information see Newsletter Reimbursement Guidelines.
Electioneering Electioneering is a Sierra Club Political Committee
Activity (SCPC, page 11) that directly advocates for the election or
defeat of a candidate or political party. Words and phrases such as:
"vote for," "endorse," "support," "oppose," "defeat," "reject" are all
examples of electioneering when they are used in association with a
candidate for elected office at any level (national, state, local) or
political party. It also includes the use of phrases such as "vote pro-
environment" or "defeat the polluters" when accompanied by references
to clearly identified candidates and their positions. Click here for
more information on electioneering.
Same Specific Subject The IRS has determined that if a lobbying
article appears in an edition of a newsletter or publication, all
other articles on the same specific subject in that edition, even if
they are purely educational, will be considered lobbying
communications. For example, if an article appears on the
reauthorization of the Endangered Species Act, and it contains a
legislative call to action for the reader, all other Endangered
Species Act articles that appear in the same edition will be
considered lobbying communications and will be ineligible for
reimbursement with tax-deductible funds from The Sierra Club
Foundation (TSCF).
If legislative leader lists are included in a newsletter, these can
taint all articles regarding legislation and make them ineligible for
501(c)(3) funding even if there is no call to action. In that case the
same specific subject rule would still be applied to the remainder of
the newsletter.
REMEMBER: Materials that are originally created using 501(c)(3) funds
cannot subsequently be used for direct lobbying or other non-501(c)(3)
activities, unless the original material was distributed to a wide
market and made available to the general public. The original intent
must have been for public education. Please work with OEP before using
501(c)(3) produced materials for other purposes than originally
planned. 501(c)(3) distribution must be documented before any approval
will be given.
Articles Appropriate for Tax-Deductible Funding:
Wilderness/wildlife/conservation education, such as informational
articles on plant life and wildlife, geologic phenomena, recycling,
energy use, and transportation issues.
Federal agency news such as timber harvest, proposed development on or
near wildlife refuges or national parks, and water rights issues.
Photographs or artwork which convey an educational or otherwise
charitable message.
Articles that teach skills to readers.
Reviews of books and other publications of interest to the general
public.
Leadership lists which provide a resource to the reader, including the
names, addresses, and phone numbers of an organization’s leaders.
Reports of past and future service trips and Inner City Outings trips,
and educational conferences, workshops, etc. If meetings/workshops are
open to the public, announce it in the article.
Articles that encourage readers to contact an administrative body such
as a water district or agency regarding existing environmental laws.
Informational articles on legislative matters, which do not contain
lobbying elements.
See Newsletter Reimbursement Guidelines for more information.
RESEARCH
Includes the investigation and preparation of facts for objective
analysis and study, such as timber harvest data and geological
analysis.
PUBLIC INTEREST LITIGATION
Defined as researching, initiating, and prosecuting public interest
lawsuits to enforce the existing spectrum of environmental laws.
Enforcement actions brought by the Sierra Club at the state and local
level serve to protect the quality of life in local communities, air
and water, state and local parks and forests, and fisheries and
wildlife resources. They ensure that public entities honestly and
openly consider the environmental consequences of their decisions.
These lawsuits also force public agencies and private companies to
properly store, handle and dispose of hazardous and toxic materials.
The lawsuits also ensure that public utilities, when formulating their
energy policies, use the most rigorous scientific and economic
analyses and thereby fully consider the environmental costs of
proposed choices.
Charitable funds can be used to pay fees for legal services provided
by outside lawyers who represent the Sierra Club in litigation. In
some circumstances, funds are used to pay fees for legal services when
the Sierra Club is not a litigant but when the Sierra Club’s mission
and the goals of the Sierra Club are advanced as a result of the
particular case (Public Interest Litigation project approval
process).
SKILLS TRAINING, WORKSHOPS, CONFERENCES, PUBLIC EVENTS, MEETINGS, AND
SEMINARS
Includes issue education and training in leadership skills,
conservation skills, project planning and evaluation, and how to
conduct public campaigns where training is not how to work for or
against a legislative proposal. By agreement with TSCF, 501(c)(3)
funds cannot be used to train people in lobbying skills, even when
there are no instructions or information about a specific lobbying
campaign.
All presenters must adhere to the following guidelines:
The presenter/training may not refer to or provide any information
about the Sierra Club’s electoral (EVEC) and political program.
Specifically, there should be no discussion of SCPC, the Club’s
endorsements, or any electoral campaign activity. It is also important
not to link any 501(c)(3) work to upcoming elections. Such statements
as "we are doing x in January in order to influence the outcome of the
November election" are prohibited. Activities supported with 501(c)(3)
funding are never linked to election-related activities, so such
statements are incorrect as well as prohibited. If election related
questions arise during your session, politely explain that this
training is educational, not political.
When planning the event, be careful how you structure the meeting if
it will contain both 501(c)(3) and 501(c)(4) aspects. Set the agenda
to have a clear break between the 501(c)(3) and 501(c)(4) sections and
group the 501(c)(3) sections together. Don’t try a tag team approach–
this is when the host of an event educates the public about a
legislative matter avoiding a legislative call to action, and then
later arranges for a speaker or member of the audience to urge the
audience to contact their legislator. This tactic is considered
lobbying by the IRS. Ensure a definable break between public education
events and any other business of the Sierra Club, such as fundraising,
membership recruitment, and organizational business.
Run a general skills training workshop, not an organization-specific
workshop. If your workshop is on membership development, teach it as a
skill useful for any person and any organization, not just on how to
increase the Sierra Club’s membership.
REMEMBER: When distributing educational materials paid for with
charitable funds at a public event, i.e. tabling at a state or county
fair, Sierra Club Membership Applications cannot be displayed or
distributed if you pay for the event with 501(c)(3) funds. This would
be considered membership solicitation, which can only be sponsored by
501(c)(4) funds. You must use 501(c)(4) funds to pay for the booth
rental in order to be able to recruit membership and distribute
educational brochures.
It is important to give these guidelines to the presenters in writing
– click here for "Sample Speaker Memo."
GRANTS
To charitable 501(c)(3) organizations whose work furthers the mission
of TSCF.
SOCIAL WELFARE
Activities which promote social welfare and further the common good.
Activities such as Inner City Outings qualify for tax-deductible
funding under this category.
LAND PRESERVATION
The Sierra Club is not equipped to purchase land, but may assist other
charitable organizations in land preservation efforts such as
maintaining trails.
MEDIA
Press conferences, public service announcements, and other
communication vehicles that are educational and do not include a call
to action are eligible for tax-deductible fund reimbursement. Certain
rules apply to paid advertisements when a vote is pending. Contact
complian...@sierraclub.org if you have further questions.
CHARITABLE STAFF TIME
The work completed by Sierra Club staff on any activities related to
charitable activities is tax-deductible. For example, this may include
time spent on a non-legislative sprawl campaign or planning a
conference that focuses on alternative energy. Click here for more
information on staff time.
ADMINISTRATIVE EXPENSES
Both administrative staff time and office administrative expenses
(such as rent, phone, insurance, etc) related to program activities
that support c3 work can be paid for with tax-deductible funds. Please
see page 30 for more information on this process.
Sampler of 501(c)(4) vs. 501(c)(3) Work in the Sierra Club
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