10/08/2025

Association Dues Paid By Federal Grant Recipients

Recent announcements address grant funds use for dues paid to associations

On August 28, 2025, the White House issued a presidential memorandum directing the U.S. Attorney General "to investigate whether federal grant funds are being used to illegally support lobbying activities." Then, on Sept. 29, 2025, the U.S. Department 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." The DCL notes that federal law 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. 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?

Please select this link to read the complete article from Associations Now.