# Understanding Lobbying: Purpose, Mechanisms, and Real-World Examples

![architect's skethc of multi-level open lobby](https://www.investopedia.com/thmb/s-kYsRTdbaJrhBKjnNnkwh71O8U=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/2wtcBIG-FoxNewsLobby-5af4a823a474be00377b4fe8.jpg)

*Rendering of 2015 Proposed 2 WTC Office Lobby by Bjarke Ingels Group.*

> **Definition**
>
> A lobby is a special interest group that works to persuade government officials to act in ways that benefit their interests.

## What Is a Lobby?

The term "lobby" refers to a group of people who band together and try to influence politicians and other individuals in public office. A lobby is typically formed to influence government officials to act in a way that is beneficial to the lobby's or an [industry's](https://www.investopedia.com/terms/i/industry.asp) best interests, either through favorable legislation or by blocking unfavorable measures. Lobbyists are particularly active and well-funded by certain industries, notably pharmaceuticals, oil and gas, insurance, hospitals, banks, and real estate.

Lobbying includes both positive societal impacts and criticisms. The term is also used as a verb to describe the influence that a group of individuals exerts over other people.

### Key Takeaways

*   A lobby is a group trying to influence government officials to act in its favor, either by supporting beneficial legislation or blocking unfavorable measures.
*   Lobbying includes direct contact with politicians and grassroots efforts to sway public opinion to influence legislation.
*   Professional lobbyists are often funded by industries like pharmaceuticals, oil and gas, insurance, banking, and real estate.
*   While lobbying is often viewed negatively due to its influence over politics, some lobbying efforts, such as those for environmental causes, can benefit society.
*   Lobbying is legal and part of the democratic process in the U.S., but its ethical nature often depends on individual perspectives.

## Understanding the Function of Lobbies

The term "lobby" came into use in the American political landscape in the 1800s in U.S. state houses in the Northeast. The very first lobby in the United States [Congress](https://www.investopedia.com/government-and-policy-4689793) was the room outside the chamber, which was one of the easiest places to run into House Representatives. This was generally where people were able to meet with politicians, have their say, and try to persuade them to vote a certain way.

The term's meaning began to shift as people gave up meeting in this physical lobby. As mentioned above, a lobby is a group of individuals or companies that use their influence over public officials. It also means the action of trying to exert influence over other individuals.

Lobbyists are particularly active and well-funded by certain industries, notably pharmaceuticals, [oil and gas](https://www.investopedia.com/investing/oil-gas-industry-overview/), [insurance](https://www.investopedia.com/terms/i/insurance.asp), hospitals and nursing homes, utilities, [banks](https://www.investopedia.com/terms/b/bank.asp), and [real estate](https://www.investopedia.com/mortgage/real-estate-investing-guide/).

Lobbies and lobbyists are paid substantially by their clients to sway the decisions of lawmakers to pass legislation for the industries they serve. Lobbies are often seen negatively because of the influence they exert and the amount of power they hold. That's why they can circumvent the democratic process and conduct what most people call back-office deals.

It may not seem fair to the average citizen that an interest group can seemingly buy a vote, but [that is how it works in politics](https://www.investopedia.com/articles/investing/043015/why-lobbying-legal-and-important-us.asp). Despite anti-lobbying rhetoric spewed by many candidates on the campaign trail, the candidate, if elected into office, does little or nothing to put an end to special interest money. In fact, these politicians often expose themselves as hypocrites when they accept donations from lobbies.

> **Important**
>
> Although they are generally looked down upon, some lobbies can have a positive impact on society, such as those tied to environmental groups, education, and human rights.

## Important Considerations in Lobbying

Lobbyists may help clarify issues important to industries, but they are often viewed negatively as special interest groups.

It's important to remember that competing interests are natural in a democracy. However, issues considered harmful to most Americans are where lines are drawn.

For instance, there is a debate about whether guns and [tobacco](https://www.investopedia.com/top-tobacco-stocks-for-q2-2023-7504643) fit into this category. The same goes for processed foods, sugary drinks, and expensive drugs. Some do not like the lobbies that push their agendas. Also, if a lobby simply outspends a competing interest to get what it wants, the question of fairness arises.

There are lobbies, on the other hand, that are seen as positive where the public good is concerned. Some of them are even considered essential. These lobbies are tied to environmental groups, education, and human rights, to name a few. These lobbies may not be as well-funded as the industries and interest groups that oppose them, but at least they have a voice.

> **Fast Fact**
>
> Many citizens liken the actions of lobbies to bribery because they may promise politicians financial support and backing during their political campaigns in exchange for votes on legislation.

## Exploring Different Types of Lobbying

Lobbying can take on a few different forms. The two most common are:

*   **Direct lobbying:** This type of lobbying involves any direct communication and/or contact with a government official and/or a member of a legislating body. The purpose of this type of lobbying is to use this contact to influence legislation. For instance, special interest groups on both sides of the abortion debate may [donate](https://www.investopedia.com/terms/c/charitabledonation.asp) funds to politicians to try to influence legislation on the issue.
*   **Grassroots lobbying:** Rather than approach government officials directly, people involved in grassroots lobbying try to influence the public with respect to specific forms of legislation. This requires educating people and urging them to contact their elected representatives by phone or mail to sway them to their side. For example, healthcare advocacy groups commonly send emails to individuals on their mailing lists asking them to contact government officials about rising [healthcare](https://www.investopedia.com/terms/h/health_care_sector.asp) costs.

## Notable Lobbying Examples: The NRA Case Study

The National Rifle Association is one of the most well-known lobbies in the United States. The organization was founded in 1871. The organization had roots in the promotion of shooting sports and hunting. Over time, it expanded and became an advocacy group for gun owners around the country.

The NRA calls itself a "major political force" whose effectiveness is due to several factors, including:

*   A dedicated membership base
*   Avoiding issues that may divide its base
*   The support of law enforcement
*   A commitment to crime and punishment

The organization committed about $2.3 million to its lobbying efforts in 2023.

## What Is an Example of Lobbying?

For example, an oil company has found an oil well on land that is soon to be protected for environmental purposes through new legislation, which would prevent the oil company from drilling for oil. This new oil well could significantly boost the oil company's profits. The oil company lobbies politicians, through various communications, donations, and other methods, to change the upcoming legislation. When the time comes, the lobbying has influenced enough politicians, who decide against protecting the land the oil well is on, thereby allowing the oil company to drill for oil.

## Is Lobbying Ethical or Unethical?

Whether lobbying is ethical or unethical will depend on an individual's opinion. It is seen as part of the democratic process in the U.S., and to prevent abuse of the process, rules have been placed around lobbying.

## How Does Lobbying Actually Work?

Lobbying generally works when a group with a specific interest hires professional advocates, most often lawyers, especially those who are well-connected in the government, to influence legislation in Congress that will benefit the group.

## The Bottom Line

A lobby is a group of individuals or entities banded together to influence government decisions that will benefit their interests, typically through legislative means. Lobbying can result in positive changes like furthering environmental or human rights causes but can also lead to criticism for facilitating special interests to bypass democratic processes.

There are two major types of lobbying: direct lobbying, which involves direct communication with officials, and grassroots lobbying, aimed at influencing public opinion to sway officials indirectly.  
Lobbying is often seen in a negative light due to the potential to circumvent democratic processes, but some lobbies may work toward the public good, such as those focusing on environmental and educational issues.

> **Article Sources**
>
> 1.  United States House of Representatives. "[Lobbying in the Lobby](https://history.house.gov/Blog/2015/January/01-21-Lobby/)."
>     
> 2.  National Conference of State Legislatures. "[How States Define Lobbying and Lobbyist](https://www.ncsl.org/ethics/how-states-define-lobbying-and-lobbyist)."
>     
> 3.  Open Secrets. "[Lobbying: Industries](https://www.opensecrets.org/federal-lobbying/industries)."
>     
> 4.  Cornell Law School, Legal Information Institute. "[26 CFR § 56.4911-2 - Lobbying Expenditures, Direct Lobbying Communications, and Grass Roots Lobbying Communications](https://www.law.cornell.edu/cfr/text/26/56.4911-2)."
>     
> 5.  National Rifle Association. "[A Brief History of the NRA](https://home.nra.org/about-the-nra/)."
>     
> 6.  U.S. Department of Justice. "[Effect of the NRA (National Rifle Association) As a Citizens Special Interest Group Concerned With the Criminal Justice System](https://www.ojp.gov/ncjrs/virtual-library/abstracts/effect-nra-national-rifle-association-citizens-special-interest)."
>     
> 7.  Open Secrets. "[Client Profile: National Rifle Assn: Summary](https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2023&id=D000000082)." Select "2023."