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limits.2 A (c)(4) provides a safetyvalve for when there will be a lot ofgrassroots lobbying.It’s often necessary to employ amix of heightened lobbying andaggressive political activity toachieve policy wins. For instance,the Affordable Care Act wouldnot have passed without bothapproaches, which were part of anextensive campaign led by HealthCare for America Now (HCAN),a (c)(4), heavily funded by TheAtlantic Philanthropies. “HCANdeveloped and executed a comprehensive strategy during the 2008elections, which helped establishhealth care as a priority, framethe debate and build momentumfor reform efforts early in the nextCongressional session . . . . HCAN’sdynamic connection betweenlegislative advocacy and electoralstrategies exemplifies two of thekey attributes of effective advocacycampaigns: developing integratedstrategies and coordinating amongdifferent parts of the campaign.”3Aspart of its campaign, “HCAN targeted several competitive Houseand Senate races in districts wherethe coalition had a base of supportand knew the candidates’ positionon reform. The goal of the ads andfield work was to show that healthcare reform was a pivotal issue inthe decision of the election.”4 Dueto this multifaceted advocacy work,which blended lobbying and political engagement, voters felt morefavorable towards candidates whosupported affordable health care.While it may not always be enoughon its own, advocacy other thanlobbying is often essential to laythe groundwork for later lobbyingand political activity. For instance,the marriage equality ballot measures passed only after advocatesrealized that “the only way tomove forward was to implementa much more effective and trulymulti-dimensional public education, non-political strategy wellbefore a measure appeared on theballot.”5 Funders realized that theyneeded to provide significant fundsso advocates could focus on a keypublic education strategy of “changing hearts and minds . . . . ”6 (C)(3)2. AFJ Interview with Emily Martin3. HCAN Evaluation: A comprehensive qualitative evaluation of the Health Care forAmerica Now campaign, Grassroots Solutions and M R Strategic Services, 17–18.4. Id.5. Hearts & Minds: The untold story of how philanthropy and the Civil Marriage Collaborative helped America embrace marriage equality, Proteus Fund (2015), 9.6. Id.,11.501(c)(4) STR ATEGY AND DISCUSSION GUIDE5

funds—and (c)(3) funders—couldsupport the public education strategy, but funds available for lobbyingwere critical once the ballot measure campaigns were  underway.Similarly, efforts to establishfederal death penalty reforms required more than public educationefforts. For example, The AtlanticPhilanthropies funded The JusticeProject, a (c)(4), for a five-yeareducation and lobbying campaignto pass The Innocence ProtectionAct as part of the Justice for AllAct in 2004. As The Justice Projectreported, “Education is absolutely important to create the rightclimate . . . But if you want to bringabout social justice change, youmust engage the legislative andjudicial processes as well.”7As described by Kevin Wernerof Ohioans to Stop ExecutionsAction Fund, a (c)(4) ”helps ensure that the (c)(3) investment ineducation isn’t just left to chance.”8Essentially, a (c)(4) can help closethe deal. In fact, many advocatesand funders remarked that a(c)(4), with its increased lobbyingcapacity and ability to support(or criticize) candidates, is oftenneeded to move an issue across thefinish line.In recent years, the death penaltyreform and abolition movementcontinues to focus on lobbying, fornow eschewing efforts to supportcandidates in favor of focusing onlegislation. Advocates have decidedto focus their limited resourceson lobbying in state legislatures,where they see a window of opportunity to act before the SupremeCourt gets involved. Although the(c)(4) death penalty groups havefocused on lobbying, one fundersuggested a possible reason toexpand their scope into partisanpolitical activities: most deathsentences in this country are carried out in only 25 counties. If thegroups had added resources, it maybe effective to weigh in on stateand local judicial and prosecutorelections.You want a change inelected leadershipSome organizations decide theydo want to help elect (or defeat)candidates, because their mission depends on the right kindof leadership in the legislative orexecutive branch. In these cases,campaign intervention becomesa critical strategy to advance the organization’s cause. As described byNARAL Pro-Choice Virginia, it7. Atlantic Reports: Why Supporting Advocacy Makes Sense for Foundations, 6.8. AFJ Interview with Kevin Werner6ALLIANCE FOR JUSTICE ALLIANCE FOR JUSTICE ACTION CAMPAIGN

is important for the organization tobe able to talk about electing a prochoice majority. NARAL points outthat it does not work for the Democratic Party, or individual candidates. Rather, the group says, “wework for the women of Virginia But to even have this conversation,we need the (c)(4).”9Likewise, various immigrationreform groups have recognized thatto promote favorable policies, theyneed to encourage activists to runfor office. The Latino VictoryFund, for example, has prioritizeddeveloping a pipeline of Latinoleaders that can serve in municipal, state, and national legislativebodies and make better policydecisions.Your advocacy goals requirea public referendumor ballot measureFor a charitable organization,leading a costly ballot measurecampaign while staying within lobbying limits is extremely difficult.Consequently, most ballot measure committees are (c)(4)s. Forinstance, in 2014, the New JerseyWorking Families A lliance, a(c)(4), led a coalition of groups(including (c)(3)s and (c)(4)s) in acampaign to place paid sick dayson the ballot in Trenton and Montclair, New Jersey. Likewise, therecent success of a criminal justicereform ballot measure, Prop 47, inCalifornia was led by Vote Safe, a(c)(4).Some (c)(4)s intentionally keeptheir work on a ballot measure separate from their work on candidateelections. They see an issue, suchas paid sick days, raising taxes, orlegalizing same-sex marriage, asnonpartisan (or bipartisan) and/or want (c)(3)s to participate inthe campaign. On the other hand,the New Jersey Working FamiliesAlliance not only promoted the ballot measures calling for paid sickdays, but also endorsed candidateswho supported pro-working familypositions and paid for ads in support of such candidates. So too did Equality Maryland (along withother equality groups), when it defended a ballot measure permittingsame-sex Marylanders to marry,while simultaneously endorsingcandidates who shared these viewsand helping voters make informeddecisions about which candidatesto support.Your policy issue hasbecome politicizedWe live in a hyper-partisan environment. Politicians and parties9. AFJ Interview with Tarina Keene501(c)(4) STR ATEGY AND DISCUSSION GUIDE7

are taking more extreme stanceson issues like gun control, climatechange and immigration reform,and in their competition for control, are politicizing many issuesthat previously were nonpartisan.Reproductive rights, health, andjustice issues have been consideredpartisan for decades now; the IRShas actually identified words like“pro-choice” and “pro-life” (and“liberal” and “conservative,” amongothers) as “code words” deemed toimprove or diminish the prospectsof certain candidates based on theirviews, even when the candidates’names are not used. Consequently,discussing these issues in connection with voting or candidatescan be quite risky for a 501(c)(3).501(c)(4)s, on the other hand, canaddress these issues with morefreedom and in connection withpolitical parties or campaigns.A (c)(4) can be more direct whentalking about its issues, particularlywhen the issues divide candidatesor parties. As described by TishaReed, former deputy director ofWV FREE and WV FREE ActionFund, a “(c)(4) can much morestrongly endorse policies insteadof providing a balanced picture . . . For things like social mediaand for [talking with] reporters,it’s easier to have a side when youare working from the (c)(4) on [reproductive] issues.”10501(c)(4) status allows a group todiscuss its issues more aggressively and challenge the positions ofpoliticians. For instance, America’s Voice, the 501(c)(4) companion to America’s Voice EducationFund, seeks to “harness the powerof American voices and Americanvalues to enact policy change thatguarantees full labor, civil andpolitical rights for immigrants andtheir families.”11 In the 2016 Republican primary, candidate DonaldTrump made offensive statementsabout immigrants and Muslims.12America’s Voice responded to thecontroversial candidate statements by issuing press statementsand reports that cover the rise inanti-immigrant rhetoric within theGOP and the corresponding negative opinion of the GOP among Latino voters.10. AFJ Interview with Tisha Reed.11. About, America’s Voice. www.americasvoice.org12. When Donald Trump announced his intention to run for President of the UnitedStates, he made many controversial remarks including calling Mexican and Latino immigrants “rapists” and “drug dealers.” In December 2015, Trump suggested that the UnitedStates should ban all Muslims from traveling to the country.8ALLIANCE FOR JUSTICE ALLIANCE FOR JUSTICE ACTION CAMPAIGN

For a (c)(3), weighing the risks andrewards of a response to a candidate’s comment(s) can be a difficult decision. In the 24-hour, socialmedia-driven media cycle, takingtime to weigh the relevant factorsand craft a judicious statementmeans loss of valuable time andimpact. A 501(c)(4) does not havethe same constraints. Also, staffand volunteers of 501(c)(4)s candiscuss issues within the context ofvoting and the attitudes of voters.You need to protect thereputation of the 501(c)(3)An organization seeking to start a501(c)(4) that is connected to anexisting (c)(3) will need to considerwhat a (c)(4) may mean for thenonpartisan reputation of its501(c)(3). The goal of a charitableorganization is to serve its community and to advocate on thecommunity’s behalf, no matter thepolitics of the moment. For thisreason, a connected (c)(4) thataggressively addresses politicalmatters or constantly lobbies, evenif nonpartisan, could potentiallysully the nonpartisan reputationof its connected parent (c)(3) organization.After conducting several focusgroups and meeting with a varietyof grantees and other stakeholders,the Healthcare Foundation ofGreater Kansas City (HCFGKC)ultimately decided not to establishan affiliated (c)(4). While there wasgeneral agreement that a (c)(4)would create opportunities—theability to spend more money onlobbying, hold legislators accountable, build a pipeline of candidatesto run for office, and encourageother funders to support (c)(4)work—there was concern that thefoundation and its grantees wouldlose their credibility and reputations would be damaged if the(c)(4) was seen as partisan.From a strategy standpoint, groupsshould consider their issues andmissions in the context of thepolitical environment. For some,using the power of a (c)(4) toleverage advocacy is unnecessary.But for some organizations, a501(c)(4) provides maximumprotection of tax-exempt status,coupled with the flexibility toutilize several advocacy tools toaccomplish their mission and servetheir constituents.501(c)(4) STR ATEGY AND DISCUSSION GUIDE9

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Best Practices for Setting up aRelated (c)(3) and (c)(4)Given the ability of (c)(4)sto engage in extensive lobbying and some politicalactivities, a (c)(3) active on publicpolicy issues might consider establishing an affiliated (c)(4). Here aresome tips for how to do it smartly.Sufficiently separatethe entitiesThe (c)(3) and (c)(4) must belegally separate and distinct corporations. Despite having similarmissions and goals, an affiliatedsocial welfare organization is aseparate organization in the eyes ofthe IRS. The affiliated organizationshould have a separate EIN (tax IDnumber), separate bank accounts,a different name, and differentlogo. Often, the name and logosare similar to that of the (c)(3) foruniformity and recognition’s sake.The (c)(4) should have a board ofdirectors separate from that of the(c)(3). The organizations may haveboard overlap, but if the (c)(4)engages in partisan politicalactivity, complete board overlap isill-advised.When Save the Children recognizedthe need for a (c)(4) to carry outwork not allowed by the (c)(3), ithad a debate about whether the(c)(4) should be affiliated with the(c)(3) or a completely free-standingentity. Initially, there was concernabout confusion and damage to thereputation of the (c)(3) with anaffiliated (c)(4). Ultimately, Savethe Children decided to establishan affiliated entity, Save theChildren Action Network(SCAN), but hired mostly separatestaff that work out of separateoffice space. However, to maintainsome alignment between theorganizations, they share a fewoverlapping board members, theCEO of the (c)(3) chairs the (c)(4)board, and the organizations meetquarterly to stay in touchabout  activities.The National Employment LawProject established a (c)(4) largelyto allow it to discuss candidates501(c)(4) STR ATEGY AND DISCUSSION GUIDE11

and hold leaders accountablewhile minimizing legal or reputational risk. Only a few NELPstaff work on behalf of the (c)(4),the National Employment LawProject Action Fund. To makeit easier to manage and to reducecompliance burdens, it uses a fiscalsponsor, The Advocacy Fund.Healthier Colorado, a nonpartisan 501(c)(4) organization, wascreated and initially funded by theColorado Health Foundation,which at the time was a publicfoundation (although it has sincetransitioned to a private foundation). Due to the Foundation’stransition to a private foundation,it chose to create strong firewallsbetween the (c)(3) and the (c)(4).The names, logos, website staffs,and even office spaces are different.A 501(c)(3) organization and itsrelated 501(c)(4) organization mayavoid some problems by havingseparate websites. However, undercertain circumstances, it is possibleto maintain a joint 501(c)(3)/501(c)(4) website. First, if thewebsite is owned by the 501(c)(3)organization, and the 501(c)(4)does not engage in any politicalactivity, the 501(c)(4) may pay topost material on the 501(c)(3)’swebsite. Second, if the website isowned by the 501(c)(4), and the12501(c)(3) organization pays to postmaterial on the site, that activitymay be permissible. However, ifthe website is owned by the501(c)(3), and the 501(c)(4)conducts political activity, thepolitical material on the jointwebsite may be attributed to the501(c)(3), resulting in a violation ofthe 501(c)(3)’s tax status.Websites of many (c)(3) organizations, such as the ACLU ofMaryland Foundation and PlannedParenthood Federation of America,are very transparent when a sitevisitor is navigating away from the(c)(3) site to the (c)(4) site. Thesesites present a pop-up box thatinforms visitors they are jumpingto another site. For example, theACLU’s pop-up message reads,“You are leaving the ACLU of Maryland Foundation (c)(3) website andgoing to the ACLU of Maryland(c)(4) website.” The site visitormust then click “OK” to continue.This leaves the visitor with no confusion about which organization’swebsite they are visiting.While there are best practices forhow to operate, it is up to each“family” of organizations to determine how closely—or how farapart—the organizations operate.“My main piece of advice,” saysChristopher Hansen, president ofthe American Cancer SocietyALLIANCE FOR JUSTICE ALLIANCE FOR JUSTICE ACTION CAMPAIGN

Cancer Action Network, “is youwant to be very, very careful aboutmaking sure that you’re makingthe separation as distinct as possible. It needs to be able to withstanda rigorous audit trail.”13Set up good compliancesystems from the startRegardless of how groups decide tohandle recordkeeping, accounting,and other administrative tasks,several former Atlantic Philanthropies program officers encouragegroups to set up good legal compliance systems from the start.Although the affiliated organizations may have similar names andshare staff and office space, theyare legally separate entities. The(c)(3) cannot subsidize the activities of the (c)(4), so it is criticalthat the (c)(4) pays at least its “fairshare” of all expenses. Organizations that share office space,equipment, and staff, for instance,should execute a cost-sharingagreement that specifies thepayment terms, and have timesheets to allocate staff timebetween organizations. Likewise,affiliated organizations need toconsider how to manage lists,websites, social media, and evenprogrammatic activities. Oneprogram officer even recommendsthat funders provide support tohire a lawyer or other compliancespecialist to devise recordkeepingand financial protocols, hoping that“seal of approval” may encourageother foundations to fund the work.Train staff for complianceMaintaining and operating an affiliated (c)(4) requires knowledgeable staff. This doesn’t mean thateveryone on staff understands theins and outs of (c)(3)/(c)(4) interactions, but there must be a basicunderstanding of when to allocateone’s time to the (c)(3) and whento allocate time or activities to the(c)(4). Organizations should havea dedicated staffer to manage thecompliance issues and boundariesbetween the (c)(3) and (c)(4), andto develop policies and proceduresto ensure consistency.Additionally, administrative staffmust understand the reimbursement procedures when movingmoney from a (c)(3) to a (c)(4)and vice versa. Groups that decideto form a (c)(4) must understandthe importance of maintainingaccurate paperwork, and not allowing money to slush between theorganizations without accountabil-13. Advocacy for a Smoke-Free Nation, Bolder Advocacy Interview with ChristopherHansen.501(c)(4) STR ATEGY AND DISCUSSION GUIDE13

ity. While there are administrativecosts associated with this vigilance,advocates insist they should notbe seen as a barrier but as a cost14of d oing business—or advocacy— better.ALLIANCE FOR JUSTICE ALLIANCE FOR JUSTICE ACTION CAMPAIGN

For More InformationVisit these user-friendly onlineresources: Primer on Social WelfareOrganizations: Using 501(c)(4)Organizations for Good The Connection: Strategiesfor Creating and Operating501(c)(3)s, 501(c)(4)s andPolitical Organizations Influencing Public Policy in theDigital Age Alliance for Justice ActionCampaign Resources andSample Documents501(c)(4) STR ATEGY AND DISCUSSION GUIDE15

11 DUPONT CIRCLE NW, 2ND FLOORWASHINGTON, DC 20036PHONE: 202.822.6070 FAX: 202.822.

4 ALLIANCE FOR JUSTICE ALLIANCE FOR JUSTICE ACTION CAMPAIGN A good example of a (c)(4) organi-zation that has diversified its reve-nue stream is Equal Voice Action (EVA), founded by the Marguerite Casey Foundation as "an inde-pendent, family-led organization