SBA Guidance Answers 501(c)(6) Lobbying Questions

The Small Business Administration (SBA) issued guidance last Friday clarifying that Section 501(c)(6) organizations can calculate their “lobbying activities” under the same parameters as the Lobbying Disclosure Act (LDA) when determining their eligibility for a loan through the Paycheck Protection Program (PPP).

Since Congress passed legislation last December to expand the PPP to include many 501(c)(6) organizations, ASAE has urged the SBA to clarify qualifying conditions for associations and other 501(c)(6) groups seeking a PPP loan. The law stipulates that qualifying 501(c)(6) organizations must have not more than 300 employees; must not receive more than 15% of receipts from lobbying activities; must not have lobbying activities comprising more than 15% of the total activities of the organization; and must have the cost of lobbying activities not exceed $1 million during the most recent tax year of the organization that ended prior to Feb. 15, 2020.

In SBA’s long-awaited FAQ, the agency clarifies that, “For purposes of determining the eligibility of section 501(c)(6) organizations and destination marketing organizations for First Draw and Second Draw PPP Loans, ‘lobbying activities’ is defined in section 3 of the Lobbying Disclosure Act of 1995.”

“ASAE is pleased to see the SBA heed our calls for clear guidance defining lobbying activities under the same parameters as the Lobbying Disclosure Act for those 501(c)(6) organizations determining their eligibility for the Paycheck Protection Program,” said ASAE President and CEO Susan Robertson, CAE. “This necessary step will ensure as many deserving 501(c)(6) entities as possible can access federal relief to get back on their feet after this devastating, year-long pandemic and perform their vital missions in service of the industries and professions that will drive our economic recovery.”