California Law Would Redefine Activist Nonprofit Staff as Lobbyists

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March 14, 2014;


A San Francisco Board of Supervisors committee has heard legislation that would define community-based nonprofit staff as “lobbyists.” The measure, sponsored by Supervisor David Chiu, subjects nonprofits to the disclosure, filing, and training requirements of lobbyists hired by corporate interests like developers, vendors and franchisees. 

An opinion piece by Randy Shaw, the Director of the Tenderloin Housing Clinic, on the Public CEO website says, “It’s a mystery [how this] anti-nonprofit measure reach[ed] the Board. Progressive San Francisco is considering legislation that attacks nonprofits, even those serving the poor.”

According to Shaw’s posting, Chiu’s bill expands “lobbyist” to include every nonprofit employee who “makes five or more contacts in a calendar month” with a government official. He points out that would mean that nonprofit employees pushing Supervisors to support or oppose a proposal are deemed “lobbyists” if they contact five supervisors—“a logical plan given the need for eight votes to pass [anything]—and they are subject to extensive reporting requirements and ongoing lobbyist training sessions imposed by the measure.”

“What a great strategy for deterring nonprofit staff from urging legislators to provide more resources for the poor and disenfranchised,” says Shaw, who says that the legislation emerged from concerns about widespread circumvention of the city’s lobbying restrictions: “Although nonprofits were not identified among these offenders, the initial draft of legislation targeted them. When they raised objections to Chiu, he assured them that their concerns would be addressed prior to a Board hearing on the legislation.”

However, Shaw says that the draft legislation from the City Attorney’s office is “even worse than before.” He goes on to say that the law is unnecessary because “the public knows the difference between a corporate interest hiring an outside firm to lobby on its behalf and a nonprofit group pushing for [public policy changes], and that their agendas are completely transparent.

Shaw explains that the significant cost of compliance is an issue for nonprofits. As in most jurisdictions with similar regulations, lobbyists must file disclosure forms, attend trainings and keep records, and failure to do so will result in onerous fines. He fears that many nonprofits will not be able to implement its provisions, and will instead be forced to curtail their public advocacy: “This means that powerful real estate interests would face less opposition at City Hall, and nonprofits would push Supervisors for [their causes] at their peril.

Shaw dismisses Chiu’s proposal to exempt 501(c)(3) nonprofits from the lobbyist designation because it would still impact change-seeking 501(c)(4) advocacy groups. He makes a compelling argument:

“Amidst growing concern over economic inequality, San Francisco’s community-based nonprofits should be able to freely discuss proposals for remedying injustices with public officials without having to file reports on every one of those conversations or risk prosecution…. Nonprofits need to be more engaged with city government, not less.”—Larry Kaplan


  • Michael Wyland

    Interesting! Shaw’s concerns about lobbying restrictions on 501(c)(3)s, which are already limited in their lobbying activities under federal law, also extend to 501(c)(4) organizations which have no such federal lobbying limitations. One wonders what Shaw’s position on nonprofit lobbying registration would be if the 501(c)(3) were a nonprofit hospital or university and the 501(c)(4) were American Crossroads. Regulating lobbying disclosure based on the content of the lobbying would be legally offensive to the protections of the First Amendment. Varying lobbying disclosure requirements based on organization size might be possible, but presents legal challenges of its own.

    It’s notable that the bill’s original definition of “lobbyist”, objected to by Shaw, included only persons paid $3000 per month for three consecutive months for the purpose of influencing legislation. This would seem to exempt most staff and executives with program or enterprise responsibility and focus on people for whom lobbying is an integral part of their position description. The new “5 or more contacts a month” to government officials would still seem to exempt most episodic contacts (depending on what constitutes a government official).

    The article says the proposed legislation has no cost estimates attached, but it should be fairly simple to calculate based on current lobbying costs for registered municipal lobbyists in San Francisco.

  • Hilary Crosby, CPA

    Progressives in the San Francisco Bay Area have a tough time pushing for the reforms that our sibling activists in other parts of the country want. If you live where the Koch Brothers and Stanley Addelson have free rein, you could promote legislation putting roadblocks in the way of 501(c)(4)’s lobbying.

    But Supervisor Chiu lives in San Francisco. Just because all of us in the Bay Area rail against lobbying paid for by shadowy right wing funders doesn’t mean we want our team hobbled! David Chiu may be trying to counter the claims that he’s too cozy with big developers to serve as Assembly District 17’s representative in Sacramento. Is this legislation meant to prove he can play with the big kids?

    San Francisco is not Texas, it’s not Kansas, and it’s not Sacramento. Nonprofits in San Francisco don’t operate in secret cabals. This legislation is totally unnecessary and should be defeated by the SF Supervisors who plan to stay here and serve the people who elected them.

  • Sayla

    With all due respect, some non-profits in San Francisco do operate in secret cabals. While the Chinatown Community Development Center does great work for low income tenants, there are those within the organization who act as unregistered lobbyists advancing the political causes of Rose Pak, Willie Brown, and Enrique Pearce.

  • Hilary Crosby

    I’m not an SF voter, so I didn’t get too engaged in the Rose Pak, Willie Brown and Enrique Pearce issues so I don’t have your perspective. Which is interesting to me. Do you think this level of secret lobbying is worth putting all the nonprofits in San Francisco to the expense of filing lobbying reports and taking the continuing education?
    Is there some other way to counter that kind of behind the scenes lobbying that wouldn’t cause so much stress to organizations that don’t have even that level of lobbying activity?