What is the maximum amount a 501(c)3 may spend on lobbying while still passing insubstantiality tests?

The maximum amount a 501(c)(3) organization may spend on lobbying while still passing insubstantiality tests is often connected to the specific criteria defined in tax regulations. In this context, the correct understanding relates to the fact that while 501(c)(3) organizations can engage in some lobbying activities, it must remain insubstantial in comparison to their overall activities.

Determining what constitutes "insubstantial" can vary according to interpretations, but it is widely accepted that a 501(c)(3) can spend a small percentage of its expenditures on lobbying. While there is no official cap established by the IRS that states a dollar amount like one million dollars universally applies, organizations that choose to use the "expenditure test" can safely spend up to a certain threshold, which could be around $1 million in a large context, but this is not explicit for all organizations.

Typically, when organizations use the expenditure test, they must keep their lobbying efforts below a specified percentage of their total expenditures (which may relate back to income). Thus, many organizations operate under the understanding that they can spend a certain amount, often articulated in communication sectors, and up to this guideline, their lobbying would not constitute a substantial part of their activities,