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Nonprofit Newswire | Excessive Lobbying Results in $20,000 Fine from IRS

Ruth McCambridge
September 20, 2010

September 18, 2010; Source: Star Advertiser | The Hawaii Family Forum has been fined $20,000 for excessive lobbying in
2009, resulting from its work against House Bill 444, which would have allowed civil unions. The bill was passed on the last day of the session but then vetoed by Governor Linda Lingle.

HFF spent $125,695 on lobbying in 2009–and this article describes that as well over the IRS-mandated limit of 20 percent of its total expenditures. By the way, this limit only applies to nonprofits who have elected to come under the 501(h) category–otherwise the test is more vague, requiring that a nonprofit to show the expenditures are “insubstantial”. Please note CLPI for lobbying rules. The Forum spent only $87,955 on other activities. The president of the organization, Frances Oda says that it will now revert to its charitable activity, which, according to him “was focused on the adoption of children out of the Family Court system.”

But as we look at the website, there is little indication of that shift in focus although we would not imply that all of what they are doing and planning is strictly lobbying. The organization has coincidentally just changed executives as of the first of September, but a “welcome” letter [PDF] posted on the website from the new director does not indicate the shift that Oda says has occurred.

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According to the Star-Advertiser article, the organization has been as active legislatively this year, but when asked if the organization anticipated being fined again, Oda replied, “I hope not. I don’t know. The executive director will monitor it. We will definitely be addressing that issue.”

Note to Oda: At the point that you are being fined by the IRS for overspending on lobbying, it is the board’s responsibility to monitor the situation and adjust accordingly.—Ruth McCambridge

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About the author
Ruth McCambridge

Ruth is Editor Emerita of the Nonprofit Quarterly. Her background includes forty-five years of experience in nonprofits, primarily in organizations that mix grassroots community work with policy change. Beginning in the mid-1980s, Ruth spent a decade at the Boston Foundation, developing and implementing capacity building programs and advocating for grantmaking attention to constituent involvement.

More about: Nonprofit News
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