Lobbying Restrictions for Federal Grant Recipients: What You Need to Know

Understanding Lobbying Restrictions for Federal Grantees

Organizations that receive federal grant funding are subject to strict restrictions on lobbying activities. These restrictions exist because Congress has determined that federal funds should be used for their intended programmatic purposes, not to influence legislative or executive branch actions. Violating lobbying restrictions can result in civil penalties, disallowed costs, and loss of future federal funding eligibility. Yet many grant recipients, particularly nonprofits that regularly engage in advocacy, are unclear about where the line falls between permissible activities and prohibited lobbying.

The lobbying restrictions that apply to federal grantees come from multiple sources, including the Uniform Guidance cost principles, the Byrd Amendment, and various appropriations riders. Understanding how these different authorities interact is essential for organizations that want to maintain an active public voice while remaining in full compliance with their federal awards. For a foundational overview of the ethical considerations that shape grant management, see our resource on the grant landscape, ethics, and foundations.

The Uniform Guidance Cost Principles on Lobbying

Section 2 CFR 200.450 specifically addresses lobbying as a cost item under federal awards. The general rule is straightforward: costs associated with lobbying activities are unallowable charges to federal awards. The regulation defines lobbying broadly to include attempts to influence legislation at the federal, state, or local level, as well as attempts to influence executive branch actions related to legislation, regulation, or policy.

Specifically unallowable costs include:

• Attempting to influence the introduction, enactment, or modification of any federal or state legislation
• Attempting to influence the introduction, enactment, or modification of any federal or state regulation
• Attempting to influence any federal or state executive order or similar executive branch action
• Engaging in activities designed to influence the outcome of elections, referenda, ballot initiatives, or similar procedures

These costs are unallowable both as direct charges and as components of the indirect cost rate. This means that even if your organization funds lobbying activities entirely from non-federal sources, you must ensure that none of those costs are included in your federally negotiated indirect cost rate.

The Byrd Amendment and Certification Requirements

The Byrd Anti-Lobbying Amendment (31 U.S.C. 1352) adds another layer of restriction. It prohibits recipients of federal contracts, grants, and loans from using appropriated federal funds to pay any person for influencing or attempting to influence an officer or employee of any federal agency, a member of Congress, or an employee of a member of Congress in connection with the awarding of any federal contract, grant, or loan.

Every applicant for a federal award exceeding $100,000 must submit a certification stating that no appropriated funds have been or will be paid to any person for influencing or attempting to influence a federal official in connection with the award. If the organization has used non-federal funds for such activities, it must submit a disclosure form (SF-LLL) identifying the lobbying activities, the individuals involved, and the amounts paid.

This certification is typically included as part of the grant application package. Submitting a false certification is a serious matter that can result in civil penalties of up to $100,000 per occurrence.

What Is Permitted: Advocacy vs. Lobbying

The restrictions on lobbying do not prohibit all forms of public engagement. Understanding the distinction between prohibited lobbying and permitted activities is critical for organizations that play active roles in their communities and policy environments.

Permissible Activities

Federal grantees may generally engage in the following activities without violating lobbying restrictions, provided they do not use federal funds:

• Providing technical assistance or information to a legislative body or government official when requested
• Communicating with government officials about the administration of an existing grant award, including programmatic and financial matters
• Engaging in non-partisan analysis, study, or research that is made available to the general public and to legislative bodies
• Responding to requests for information from legislative or executive branch officials about the organization's programs and expertise
• Self-defense communications on legislation or regulations that could directly affect the organization's operations, though strict limits apply

Activities Requiring Non-Federal Funding

Organizations may engage in direct lobbying and grassroots lobbying activities using non-federal funds, provided these costs are clearly segregated from federal award costs and excluded from indirect cost rate calculations. This requires careful accounting systems that can track and separate lobbying expenditures. Our guide on federal cost principles explains how to structure your accounting to maintain this separation effectively.

Compliance Strategies for Organizations That Advocate

Many nonprofit organizations that receive federal grants also engage in legitimate advocacy and lobbying activities funded through private donations, membership dues, or other non-federal sources. Managing both activities within a single organization requires deliberate systems and procedures.

• Establish clear cost accounting: Create separate cost centers or fund codes for lobbying activities to ensure that no lobbying costs are charged to federal awards or included in indirect cost calculations.
• Train staff on the distinction: Employees who work on both grant-funded programs and advocacy activities must understand which activities are permissible and which are restricted. Provide clear guidelines and real-world examples.
• Document time carefully: Staff members who split time between grant-funded activities and lobbying must maintain time records that accurately reflect the allocation of their effort.
• Review communications before release: Before publishing position statements, action alerts, or communications to legislators, verify that no federal funds supported their development or distribution.

For more on maintaining compliance across all aspects of your federal awards, see our comprehensive post-award grant management guide.

Consequences of Non-Compliance

Violations of lobbying restrictions carry significant consequences. Under the Byrd Amendment, civil penalties can reach $100,000 per violation. Under the Uniform Guidance, lobbying costs charged to federal awards will be disallowed and must be repaid. Repeated or egregious violations can lead to suspension or debarment from all federal awards, effectively cutting off an organization's access to federal funding. These consequences underscore the importance of building compliance systems before problems arise.

Learn more about grant writing strategies at Subthesis.

Navigate Lobbying Restrictions With Confidence

Understanding the boundaries between advocacy and prohibited lobbying is essential for every organization that receives federal grants. Enroll in The Complete Grant Architect course to master federal compliance requirements and build the knowledge you need to maintain an active public voice while protecting your grant funding.