Can 501(c)(3)s call for oversight hearings?
On March 4, 2019, Democratic lawmakers in the House of Representatives announced a broad investigation into President Trump’s campaign, businesses, and transition team. This follows a trend in recent years in which many different types of organizations have demanded that Congress hold oversight hearings, probes, and investigations into a broad range of activities. So can nonprofit organizations join this chorus?
The short answer is yes: 501(c)(3) private foundations and public charities can call for oversight and investigative hearings and encourage Congress to fulfill its role as one of the three coequal branches of government. Oversight hearings are a mechanism for Congress to oversee the actions of the executive branch, while investigative hearings usually involve investigating official actions by public officials or actions by private citizens. These hearings differ from more traditional legislative hearings that discuss the merits of specific pieces of legislation.
The chair of a committee can launch an oversight or investigative hearing unilaterally, without needing a vote to do so. Furthermore, the hearings do not entail votes or address pieces of legislation. Therefore, calling for or participating in oversight or investigative hearings is unlikely to be considered lobbying.
In the event a hearing requires a legislative vote, public charities can lobby for or against the hearing, as long as they stay within their lobbying limits. A public charity’s lobbying limit is determined by the IRS test it uses, either the “insubstantial part” test or the “501(h) expenditure” test, the latter of which provides very generous lobbying limits. In contrast, a 501(c)(4), 501(c)(5) (frequently a labor union), or 501(c)(6) organization can engage in an unlimited amount of lobbying, although the lobbying must be related to the organization’s tax-exempt purpose.
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