On August 28, 2025, the White House issued a Presidential Memorandum directing the Attorney General “to investigate whether Federal grant funds are being used to illegally support lobbying activities.”¹ Then on September 29, 2025, the U.S. Dept. of Education issued a “Dear Colleague” letter (the “DCL”) titled: “Reminder Regarding Prohibited Use of Federal Grants Funds for Lobbying and Allowable Membership Costs.” Consistent with its title, the DCL addresses “the use of federal grant funds for lobbying, including membership dues that support lobbying activity.”² The DCL notes that federal law³ prohibits use of federal grant funds to pay for lobbying, but that it is nevertheless permissible to use grant funds to pay dues for membership in a business, technical, and professional organization as long as the organization’s primary purpose is not lobbying.⁴ The DCL then warns grant recipients to maintain documentation showing “that membership fees are not being used on lobbying and are reasonable and necessary.” Referencing a federal regulation that describes what indirect costs are allowable uses of grant funds, the DCL notes that grant recipients must not classify dues as allowable costs if paid “to organizations that cannot or do not report the proportion of their activities that are dedicated to lobbying.” There is then a reminder that non-compliance could result in termination of a grant or even civil penalties.

How does this affect associations with members that receive federal grant funds?

First, it is clear that these federal directives are aimed at grant recipients that pay dues to associations, not at the associations themselves. The DCL emphasizes that “it is the responsibility of the grantee to ensure that any membership fee funds are not used for lobbying, even when the membership organization’s primary purpose is not lobbying.” Recipients of government grants, as with the broader class of government contractors, are familiar with standard cost allocation requirements (for example, government funds also cannot be used for alcohol, fines, donations, costs of defending or pursuing claims against the Government, etc.).⁵ The DCL letter aims to give more specific direction to grantees on avoiding use of federal funds for lobbying.

Next, there is no suggestion by the White House or the DOL that federal grant recipients cannot use funds generated from other sources than federal grants to pay dues to associations, regardless of whether, and the extent, those associations legally engage in lobbying. The burden is on the grant recipient, not on an association to which the grant recipient belongs, to monitor costs for compliance with the terms of a grant. Read in the context of the federal regulations the DCL addresses, the DCL does not advance a sweeping view that federal grant recipients are prohibited from using non-grant monies to pay dues to associations engaged in lobbying

Finally, the DCL reminds grant recipients of the prohibition against using grant funds to pay dues for memberships in associations whose primary purpose is lobbying. And it goes even further to warn grantees against charging to the grant dues to associations that do not report the proportion of their activities dedicated to lobbying (to avoid, presumably, paying dues to an association for the primary purpose of lobbying). This suggests that, even if not legally required, associations that have members who receive federal grants may prefer to be open and transparent about the associations’ lobbying expenses; indeed, often disclosure is compelled. The Federal Lobbying Disclosure Act has detailed requirements for reporting lobbying expenses at the federal level; most states have similar laws. Tax-exempt associations are required to file annual informational tax returns, the Internal Revenue Service’s Form 990, on which they must also disclose lobbying expenditures. Moreover, many tax-exempt associations are required to provide notices to members, at the time of dues assessment or payment, of the percentages of the members’ dues that are not tax-deductible to the members because of the associations’ lobbying expenses.⁶

In short, the recent White House Presidential Memorandum and the Department of Education “Dear Colleague” letter are both useful reminders that recipients of federal grants may not use grant funds for lobbying; but they should not be read as discouraging in any way grant recipients from maintaining memberships in associations.

1. Use of Appropriated Funds for Illegal Lobbying and Partisan Political Activity by Federal Grantees – The White House. ↩︎
2. https://fsapartners.ed.gov/knowledge-center/library/dear-colleague-letters/2025-09-30/reminder-regarding-prohibited-use-federal-grants-funds-lobbying-and-allowable-membership-costs. ↩︎
3. 31 United States Code § 1352. ↩︎
4. 2 Code of Federal Regulations § 200.454(a), (e). ↩︎
5. 2 Code of Federal Regulations § 200.450. ↩︎
6. Internal Revenue Code § 162(e) applicable to social welfare organizations, agricultural organizations, and business leagues but not applicable to charitable, educational, scientific, etc. tax-exempt organizations; there is a proxy tax alternative if the organization subject to this rule does not use the dues non-deductibilty notice to members. ↩︎