Lobbying is activity designed to influence legislation. A 501(c)(3) is attempting to influence legislation if it contacts, or urges the public to contact, a member or employee of a legislative body to propose, support, or oppose legislation, or if the 501(c)(3) advocates or opposes legislation.

If its lobbying activities are substantial, a 501(c)(3) may fail the operational test (discussed earlier) and risk losing its tax-exempt status.