Unlike public charities, private foundations like OSI and FPOS are strictly prohibited from engaging in or funding "lobbying" activities. Under the U.S. tax code, “lobbying” is defined as efforts to influence legislation, including laws, treaties, confirmations of executive appointments, appropriations, ballot initiatives and/or referenda.

For more information, please see the Lobbying Rules and Regulations That Apply to U.S. Private Foundations appendix below.

Every project-support proposal record in the system must include a Lobbying Checklist completed by a Program Officer.

Grants Officers should follow up with program staff if project related activities could be considered lobbying (as defined by the US tax code).

In requesting additional information regarding potential lobbying, GOs should be clear and concise, keeping their questions simple

Asking whether the project OSF will fund actually includes the suspected lobbying activity is a good place to start (sometimes the activity is mentioned in the proposal only to provide context of other work done by the organization), followed by attempting to determine whether the activity really is lobbying as defined by the U.S. tax code.

GOs can also request that a grantee submits an attestation letter stating that their project in fact contains no lobbying as defined by the U.S. tax code.

If the activity is determined to be lobbying, and if the potential grantee is a U.S. 501(c)(3) public charity or equivalent, request a bifurcated budget (see Lobbying Case Study in Appendix below). The grant amount must be equal to or less than the non-lobbying amount budgeted. If the grant is subject to ER, the bifurcated budget safe harbor is not permitted, but the grantee can submit a revised proposal and budget for the non-lobbying portion of the project (see below).

Documentation of lobbying concerns that have been addressed and resolved should be added to the proposal record in FC.

OSPC-Enabled Staff & Lobbying Concerns

Under grants sourced through our overseas grant making entities, such as FOSI, OSIAF, or regional or national foundations, grantees may engage in lobbying activities. OSF U.S. program staff who provide technical guidance during the implementation of grants that include lobbying must be “OSPC enabled”, meaning that they must go through a procedure whereby they are approved to charge to the Open Society Policy Center (“OSPC”), a 501(c)(4) tax-exempt entity, the time that they spend providing technical guidance/feedback to the grantee, reviewing grant reports from a grant that contains lobbying, or any other OSF work that meets the IRS definition of lobbying.

OSPC is a separate but affiliated organization from OSI-NY that "engages in policy advocacy on U.S. and international issues, including domestic civil liberties, multilateralism, economic development, civil rights, human rights, women's rights and criminal justice reform." OSPC makes grants in its own right but also serves as the vehicle through which OSF staff can work on grants that contain lobbying activity. The IRS allows affiliated 501(c)(3) and 501(c)(4) organizations, such as OSI and OSPC, to work together and to share facilities and staff members’ time as long as certain requirements are met that, among other things, prevent any subsidizing by OSI of any OSPC costs or expenditures. In order for OSI staff to engage in 501(c)(4)-related activities, they must keep contemporaneous records of the time they spend on lobbying and non-lobbying work. OSPC then reimburses OSI for any OSPC time.

OSF programs or initiatives that engage in lobbying activities through grants issued through our overseas grant making entities should consider which U.S. staff will be most involved in the implementation of these grants and should request that these staff become OSPC-enabled. The program is expected to possess a solid understanding of what activities constitute lobbying and the ability to identify such activities in proposals.

OSF has another 501(c)(4) affiliate, the Fund for Policy Reform, Inc. (FPR). FPR is used on a limited basis, as determined by the General Counsel’s office and OSF senior management. Any staff members working on a grant from FPR must be “FPR enabled.” (There is in fact yet another FPR entity that is organized as a trust instead of a corporation; it funds the corporation FPR.)

The Compliance Officer in OSI-DC office can be consulted on the process of becoming OSPC- or FPR-enabled.


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