Most Minnesota tax-exempt organizations are aware that their lobbying and political activities are regulated by the IRS. What they may not be aware of is that that are also regulated under Minnesota’s campaign finance laws and may have to register and report to the Minnesota Campaign Finance and Public Disclosure Board (MCFPDB). For organizations involved in ballot measures, I will not address those issues specifically here (although some of the below may apply equally), but you can see my prior post here. For organizations that are involved in state elections, or lobbying on state or local level legislation, the following is a very brief overview of reporting requirements that may apply to your organization.
Organizations Doing Electoral Work:
The MCFPDB regulates express advocacy by organizations. Express advocacy may be in the form of an “independent expenditure,” which includes any expenditure of funds resulting in a communication that expressly advocates the election or defeat of a clearly identified candidate, if the expenditure is made without any communication or cooperation with the candidate, the candidate’s principal campaign committee or agent. If a communication only discusses issues and does not mention candidates, or a communication that mentions candidates but does not expressly advocate for the election or defeat of that candidate, would not be regulated as an independent expenditure.
Those engaging in express advocacy activities (whether independent of the candidates and their committees, or not) are generally organized as a political fund, a political committee, an independent expenditure fund, or an independent expenditure political committee. All four of these types are required to register with the MCFPDB. Regular political funds and committees (vs. independent expenditure) are required to register within 14 days receiving $100 or more in revenue, or making $100 or more in expenditures, except during the reporting period cut-off before the primary and general elections, the registration must occur by the end of the next business day after receiving more than $1,000. Once registered, political committees and funds must make regular reports of all receipts and expenditures to the MCFPDB. Corporations (including nonprofits) can make contributions to independent expenditure funds or committees without themselves being a fund or committee (they are viewed as "unregistered associations"). Once those contributions reach $5,000 or more, the donating corporation must provide a disclosure statement to the fund or committee disclosing the underlying sources of the contribution. The law currently requires that any corporation wanting to make an independent expenditure of its own must do so through an independent expenditure fund or committee.* Corporations may choose to do this because they want to be able to retain the control over the communication, rather than ceding that control to another fund or committee.
Please be aware that there are certain restrictions on contributions, as well as disclaimer requirements, that are not the included in this summary.
Organizations Engaged in Lobbying at the State Level
Minnesota does not regulate lobbying by nonprofit organizations as the IRS does, but it does require registration and reporting by individual lobbyists and the organizations they represent. Lobbying in this context include attempts to influence legislative or administrative action, or the official action of a metropolitan governmental unit, by communicating with decision-makers or urging other to communicate with those individuals. Thus, this includes both direct and grassroots lobbying. Also note that the types of actions included are broader than the IRS rules as they include administrative actions and actions by a metropolitan governmental unit.
An individual is required to register as a lobbyist if they are either engaged to be paid more than $3,000 a year from all sources, or they are not compensated but spend at least $250 of their own funds in a year on lobbying or urging others to lobby. Lobbyists must submit a lobbyist disbursement report twice annually, on January 15th and June 15th.
Lobbyist principals (the organization engaging the service of the lobbyist) are required to report information in its disbursements to its designated lobbyists no later than five days before the lobbyist’s filing deadline.
Organizations should also note that there are gift bans that apply on both the state and federal level, as well as federal lobbying registration and disclosure laws that may apply.
*This area of the law is in flux at the moment, particularly as a result of the 8th Circuit Court of Appeals ruling in MCCL v. Swanson. See my post here for more information.