Federal tax policies shape the tax status and treatment of nonprofits and foundations.

The act of advocating in the public policy space — whether on matters of tax policy, our workforce, or other issues confronting the communities we serve — is a key determinant of the ability of organizations to fulfill their missions. Advocacy is a core activity of high-impact nonprofits because it enables organizations to proactively shape their policy environments and strengthen their communities, not just react. Advocacy also strengthens other forms of civic engagement that support nonprofit work and a vibrant civil society: Individuals who advocate through nonprofits report higher rates of giving, volunteering, and voting.

Finally, it is not possible to make systems more equitable for all members of our community without advocating for change. Therefore, the capacity for nonprofits to advocate for solutions that align with their missions serves as a major indicator of the sector’s agency and impact, providing critical insight into its overall health.

Engaging With Public Policy Is Critical, but Fewer Nonprofits Say They Lobby or Advocate Than Two Decades Ago

Between 2020 and 2022, the number of nonprofits who say they lobby or otherwise do public policy advocacy decreased from 74% to 31% (Faulk et al., 2023). The shift in organizations reporting never doing advocacy occurred across various types of activities. For example, in 2020, just one-quarter (26%) of nonprofits said they had never lobbied on a policy proposal, but in the 2022 survey, three-quarters (75%) said they had never lobbied.

Over the same period (from 2020 to 2022) nonprofit leaders showed a decreased understanding of which advocacy activities are legally permissible for nonprofits (see Figure 25). For instance, the number of nonprofit leaders who knew that nonprofits are legally permitted to talk to elected officials about public policy decreased from 91% to 69% over that period. This indicates that possibly some of the decrease in advocacy activity is explained not by a considered decision not to do advocacy, but by the belief that advocacy is not allowed. Lack of awareness and education on legally permissible advocacy has been identified by nonprofit leaders as one of the two largest obstacles to engaging in policy advocacy along with a lack of resources and capacity (Faulk et al., 2023), themes that were reaffirmed in a follow-up qualitative study (MacIndoe et al., 2024).

Given the importance of public policy in shaping the work of nonprofits and the communities where we operate, Independent Sector has created recommendations to reverse these trends in decreased activity and knowledge based on the findings of our research on nonprofit advocacy and reached in collaboration with nonprofit advocates (Rogers & Miller, 2025). We intend to revisit data collection on advocacy to track future trends as well.

Ongoing data from the Urban Institute’s National Survey of Nonprofit Trends and Impacts confirm that most nonprofit organizations do not engage in various direct advocacy activities, with very few involved in mobilizing people to participate in rallies, protests, boycotts, or demonstrations (12%) or even conducting nonpartisan voter education (13%; Martin et al., 2024). More nonprofit organizations reported educating the general public about a specific policy issues and/or the interests of certain groups (71%) or conducting and publicizing research to the media, the public, or policymakers (55%; Martin et al., 2024). Of note is the discrepancy between the finding that just 31% of nonprofits say they do lobbying or advocacy and the larger portion who report doing more specific related activities (Faulk et al., 2023).

Whether organizational leaders say they do lobbying and advocacy may be driven in part by understanding some activities as unrelated to lobbying or advocacy, or unwillingness to report those lobbying or advocacy activities under some circumstances.

Nonprofits Walk a Fine Line with Public Perception of Advocacy

If nonprofit leaders are reluctant to acknowledge their advocacy and lobbying activities, there may be good reason. Data from Independent Sector’s trust report show that Americans, who generally have high trust in nonprofits, are less certain they can trust nonprofits when it comes to engaging in public policy advocacy (Independent Sector & Edelman DXI, 2025b). For instance, though 57% of Americans say they have high trust in nonprofits in general, just 33% say they have high trust in the sector to publicly advocate for policy issues. These attitudes were slightly more negative in 2025, a worsening of already low trust in 2024. This likely reflects general skepticism about the role and trustworthiness of government and relationship of nonprofits to government rather than a specific belief that nonprofits are likely to be worse at advocacy than others would be, given that a plurality of Americans believe nonprofits are making things better in America (see Trust & Governance section).

But nonetheless, low trust in nonprofits to act in the policy arena is a challenge for effective advocacy and maintaining public trust in the sector.

Public Policy Affects the Sector and Big Changes Are Coming

In addition to direct funding challenges nonprofits are already facing this year (see Economy & Finance section), the OBBB is expected to result in the largest cut to federal social services in history, reducing access to key supports for vulnerable Americans who also rely on nonprofit services. The OBBB is forecast to result in a loss of Medicaid for 10 million Americans while also making recordkeeping and cost-sharing more onerous for Americans who are enrolled (Congressional Budget Office, 2025). An estimated 22 million American families will lose eligibility for SNAP. Cuts to Medicare are also expected to be substantial (Wheaton et al., 2025).

These massive reductions to the safety net in the U.S. will directly increase demand on nonprofits providing funding and services related to health care and food. Ripple effects will likely impact social service, community, and advocacy-focused organizations throughout the sector as families and communities experience increased hardship.

Take Action

Nonprofits have a right and responsibility to engage in public policy advocacy, but many nonprofit leaders and staff struggle to understand the activities that they and their organizations can and cannot legally engage in. This causes needless anxiety and stress, and it discourages policy engagement. These rules and how they are communicated can be made clearer. Find out more about how we can clarify the rules.

In partnership with a group of outstanding nonprofit sector advocates, Independent Sector recently released recommendations to boost nonprofit advocacy, informed by groundbreaking research and the group’s own deep expertise.

Learn more and contact us if you want to partner on building the sector’s capacity and activities in public policy advocacy.