MCN provides input as Minnesota Campaign Finance and Public Disclosure Board considers rule changes

The Minnesota Council of Nonprofits (MCN) strongly encourages nonprofits to advocate to their elected officials on issues key to their work and communities, including lobbying. By doing so, nonprofits provide valuable, on-the-ground insight into communities across Minnesota. When nonprofits lobby, they are required to report that work to both the federal IRS and the Minnesota Campaign Finance and Public Disclosure Board (CFB).

The CFB is currently going through a process to formally clarify some of the rules around what constitutes lobbying activity. The CFB will provide a report with recommendations for the Legislature’s consideration in January. In addition, the CFB is making changes to its formal Rules.

MCN has been following and providing input to both of these processes. Specifically we have weighed in on the following items:

• MCN urged the CFB to work with us after the 2025 legislative session to create user-friendly practical guidance on what is lobbying activity, who needs to register, and how to report that lobbying activity.

• MCN suggested that the CFB consider aligning the definition of “lobbying” to match the definition used by the IRS, noting: “One specific challenge nonprofits face in reporting compliance is that the IRS and Minnesota define lobbying differently and ask for different data. We must track lobbying time and expenses under both definitions, distinguishing between legislative, administrative, or local lobbying, and whether it is direct or grassroots.”
  • The CFB has declined make this change, noting that aligning the IRS definition of “lobbying” with the Minnesota definition would require changing the scope of communications that define a lobbyist to exclude administrative rulemaking and other actions.

• The CFB included in the proposed Rules our proposed change to the definition of “compensation” to be used when calculating how to report lobbying time. MCN’s goal with this recommendation is to clarify the language.
  • In response to MCN’s comments, the CFB notes, “The Board shares the MCN’s concern regarding the need for clarity in how the word “compensation” is defined…The MCN’s comment illustrates the difficulty in defining the term “compensation” in a manner that is sufficiently inclusive while also being sufficiently easy to calculate.”

• MCN urged the Board to clarify that responding to a local government’s grant program request for proposals (RFP) is not lobbying activity. Unfortunately, the Board viewed this as a change in policy rather than a clarification of existing policy, and chose not to make the change in its final proposed Rules. MCN’s public policy director, Marie Ellis, spoke with the CFB during its December 4, 2024 meeting, and successfully explained why applying for a grant from a local government should not be considered lobbying activity, noting specifically that an RFP is the local government asking for partners in their work, not nonprofits asking the local government for fund for work. For-profit organizations have a clear exemption in bidding for local government projects, a process for which responding to an RFP is analogous. The CFB will note this issue in its recommendations the legislature, and we are hopeful the Legislature will make a change before the new Rules go into effect in June 2025.

MCN will continue to monitor the CFP rules review process as progresses and is eventually completed and will share insights as to the impact of any possible changes on Minnesota nonprofits.