Nonprofit Advocacy in a Post-Election Year

Published on: by Gene Takagi Category:ADVOCACY & LOBBYING
Young woman outdoors with fist in the air facing sunrise

I moderated a session titled “Advocacy in a Post-Election Year” at the 2025 Western Conference on Tax Exempt Organizations (WCTEO) held in Los Angeles at the end of February. The panelists were Eric Gorovitz (Adler & Colvin) and Nona Randois (Alliance for Justice). This post covers some of our discussion and adds some additional resources that may be helpful to nonprofits as they consider their advocacy activities during these tumultuous times.

Introduction:

If we need anything at this time, it’s effective advocacy from nonprofits. While we must respect each organization and its unique circumstances, risk profiles, and risk tolerances, and the thoughtful decision-making by its leadership, collective resistance to bad policy is imperative and collective nonresistance would be disastrous.

Advocacy

Key points:

Additional resources:

HR 9495

Key points:

  • HR 9495 was a bill that would authorize the Treasury Secretary to designate a terrorist-supporting organization (TSO) with some due process, including 90 days’ notice which would include identification of the terrorist organization to which the TSO provided material support or resources. See H.R. 9495 (Congress)
  • While the bill did not pass in 2024, it may be re-introduced in the new Congress and would have a serious chance at passing now that both the House and the Senate are controlled by the Republicans. See H.R. 9495: What’s Next?
  • The failure of HR 9495 last year was an example of the power of nonprofit lobbying and advocacy causing many members of Congress to recognize the potential harm it could do to the nonprofit sector and the causes and communities it supports

Additional resources:

Memorial Hermann Case

Key points:

  • The 5th Circuit (covering Mississippi, Louisiana, and Texas) affirmed that the no substantial part test and not the primary purpose test is the right one to apply in determining whether an organization is operated primarily for the purpose of bringing about civic betterments and social improvements consistent with Section 501(c)(4). See Memorial Hermann Accountable Care Organization v. Commissioner of Internal Revenue, 120 F.4th 215 (5th Cir. 2024)
  • The no substantial part test, also referred to in the opinion as the substantial nonexempt purpose test, generally provides that the presence of a single nonexempt purpose, if substantial in nature, will destroy the exemption; it had been associated with 501(c)(3) tax-exempt status based on Better Business Bureau of Washington, D.C., 326 U.S. 279 (1945).
  • The primary purpose test is articulated in Treasury Reg. Sec. 1.501(c)(4)-1(a)(2)(i) and has been interpreted by many as greater than 50 percent of an organization’s operations was necessary to qualify as a 501(c)(4) tax-exempt entity, leaving 49 percent as a practical cap on nonexempt activities including electioneering. But following the Loper Bright decision, the court was not required to apply the Chevron deference standard to the IRS’s interpretation of 501(c)(4) in the regulation.
  • We’ll need to wait to see if other Circuits follow and how practitioners’ advice may change on how much political campaign intervention activities is permissible within a 501(c)(4) organization.

Additional resources:

Diversity, Equity, and Inclusion (DEI)

Key points:

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