National Council of Nonprofit Associations

Contents

SPOTLIGHT: Senate Appropriators Act to Fund More of the Serve America Act - including the Nonprofit Capacity Building Program | Nonprofit State Associations Meet with White House Office of Social Innovation and Advocate on the Hill | Federal Legislative and Regulatory Developments | Court Cases | Webinars and Resources | State Policy Developments

SPOTLIGHT: Senate Appropriators Act to Fund More of the Serve America Act - including the Nonprofit Capacity Building Program

After a significant slash in the Administration's request for the Serve America Act appropriation on the House side (HR 3293) - the House cut $90 million of the President's Budget Request for $259 million – the Senate Appropriations Committee acted this week to maintain that request and add more to grow the number of AmeriCorps volunteers and to launch new programs. A Senate floor vote is next, but not expected until September after Congress returns from its August recess.

Where appropriations stand for the Corporation for National and Community Service:

Program	Passed House	Passed Senate  Appropriations
Social Innovation Fund	$35 million	$50 million
Volunteer Generation Fund	-0-	$8 million
Nonprofit Capacity Building Program	-0-	$2 million
Total Corporation Budget	$1.059 billion	$1.157 billion

The National Council of Nonprofits, as well as the Alliance for Children and Famililies, Center for Lobbying in the Public Interest, Independent Sector, Points of Light Institute, the ServiceNation Coaliton, Voices for National Service, and others all have been actively engaged in ensuring appropriations for the Serve America Act. The National Council's State Association Members visited more than 100 members of Congress on their "Nonprofits Advocate!" lobby day in mid July, urging - among other items - funding for the Nonprofit Capacity Building Program. See below.

 

Nonprofit State Associations Meet with White House Office of Social Innovation and Advocate on the Hill

In an historic first, 80 nonprofit leaders from our State Association network, representing more than 20,000 organizational members from across the country, met July 14 with a senior White House official to explore ways government and nonprofits can best partner to serve local communities. Read our Press Release.

(PHOTO of us at WH)

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Federal Legislative and Regulatory Developments

In this Section: Health Care Reform Impasses | Restrictions on Legal Service Corporation | Tribal Charities Fairness Act | Discretionary Appropriations Growing | Task Force on Middle Class | Regulatory Developments

Health Care Reform Impasses Breaking Down as Difficult Negotiations Continue

Nonprofits can raise their health care reform issues with their members of Congress over the August recess, because the anticipated pre-recess votes will not occur due to reform discussions slowing down on Capitol Hill.  The slow-down has come in the House in the Energy and Commerce Committee where “Blue Dog” fiscally conservative Democrats are a force, and in the Senate Finance Committee (SFC) where the daily negotiations of six key Senators continues. Critical issues that dominate are how to bend the cost curve of health care in this country so that reform is fiscally meaningful, whether a public plan will be an option, and whether - and on what terms - an employer mandate to provide insurance coverage will exist. 

The Energy and Commerce Committee may report a bill out any time now on a compromise version of HR 3200 that would include Blue Dog amendments that would trim eligibility for subsidies for individual coverage, exempt more small businesses from a mandate to cover their employees, and make it easier for private insurers to compete with a new, government-run “public plan” – provided the more liberal members of the Committee who disfavor these changes are willing to agree.

The SFC has just received an encouraging “score” (budget projection)from the Congressional Budget Office on its latest proposals which reportedly may include a cooperative health exchange plan in lieu of a public plan. Its bill may not include an employer mandate for coverage, which would pit its provisions against those already approved by the Senate Health, Education, Labor, and Pensions (HELP) Committee in these two major areas. SFC Chair, Senator Baucus (MT-D) has stated that there will not be a markup before the August recess, although key negotiations among Senators will continue during the recess.

For nonprofits, especially small and midsize nonprofits, the specific reform issues relative to their participation as employers remain around the nature of the employer mandate, small employer exceptions to that, and possible use of a payment credit or subsidy to support providing health insurance to employees. And the issue of the cap on itemized deductions including charitable contributions remains in play to fund the reform. Read more details on the National Council's public policy page. CQ Online, 7/30/09; CQ Today, 7/30/09, 7/24/09, 7/23/09; CQ Politics, 7/30/09

Resources to Learn More:
• The Power of A website
• White House Office of Health Care Reform weekly updates

Restrictions on Legal Services Corporation Possibly Diminished

The Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies approved the FY 2010 appropriations bill covering the Legal Services Corporation (LSC) on June 30. Notably, it would remove restrictions on LSC grantees' state, local, and private funds. Currently, once LSC recipients receive their first dollar of LSC funds, they cannot use certain legal tools allowed by other lawyers to serve their clients. Meanwhile, the full House passed its appropriations bill for these agencies, removing the restriction prohibiting LSC grantees from seeking attorneys' fees, but leaving in all other restrictions on LSC and non-LSC funds. Once the full Senate passes its bill, the differences between the two will have to be reconciled in a Conference Committee. OMB Watch

Tribal Charities Fairness Act Introduced

Two California Congressmen, Representatives Becerra (D) and Nunes (R), have teamed up to introduce the Tribal Charities Fairness Act (HR 3085) while Democratic Representatives from Arizona, Connecticut, Michigan, Massachusetts, Minnesota, New Mexico and Oregon have joined them as co-sponsors already. The bill would amend Section 7871 of the Internal Revenue Code to allow Indian tribes to be treated the same as state and local governments when they provide funding to charitable nonprofits.  The current inequity is that while the tax code generally treats government funding as “public support” for classifying 501(c)(3)s as public charities, it does not treat tribal government funding the same – rather tribes are treated like corporations.  The First Nations Development Institute supports the bill.

Discretionary Appropriations for Labor, Health and Human Service, and Education Probably Increasing

Both the House and Senate versions of the Labor, Health and Human Services, Education and Related Agencies appropriations bills include major discretionary spending programs – in the $160 billion plus range -  administered by key departments that influence the health, education, and working opportunities of many nonprofit clients. The House in HR 3293 appropriated for these departments over $727 billion, which provides $53.9 billion more than in fiscal 2009, and significantly more than President Obama requested. Of that sum, $160.7 billion is discretionary spending which is $5.6 billion more than last year and very close to what the President requested. The Senate bill is not available yet for public review, but the Appropriations Committee July 30 Summary touts a $163.1 billion cost for discretionary programs that will help create jobs and train American workders, fund cutting-edge medical research and pandemic preparedness, and increase education opportunities.

The HHS portion of the House appropriation does not fund the Strengthening Communities Fund for FY 2010. The American Recovery and Reinvestment Act (ARRA) of 2009 provided $50 million for this fund for nonprofit capacity building grants – funding decisions on that stimulus money are to be made in September. The President had proposed continuing the fund at the same level in FY 2010 in lieu of the Compassion Capital Fund. CQ Today Online, 7/24/09; CQ Today Print, 7/16/09

White House Launches Task Force on Middle-Class Working Families

This Task Force is a major initiative targeted at raising the living standards of middle-class, working families in America. Comprised of top-level administration policy makers, it will conduct outreach sessions with representatives of labor, business, and the advocacy communities. The Task Force will be chaired by Vice President Joe Biden. The goals of the task force are:
• Expanding education and lifelong training opportunities
• Improving work and family balance
• Restoring labor standards, including workplace safety
• Helping to protect middle-class and working-family incomes
• Protecting retirement security
You can share your story with the Task Force and give them ideas for how to get the middle class going again. Visit the Strong Middle Class website to learn more.

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Regulatory Developments

• Stimulus Lobbying Disclosures Apply to Non-Lobbyists

The Office of Management and Budget issued a memorandum to heads of executive departments and agencies clarifying instructions on when and how government officials must document communications with registered lobbyists regarding stimulus funding under the American Recovery and Reinvestment Act. The memo formalizes changes announced in May that removed prohibitions on meetings and oral conversations between lobbyists and government officials, and imposes a ban on oral communications between government officials and interested parties – lobbyists and non-lobbyists – during the period between submission of formal applications for, and up through awards of, competitive grants.

• Section 403(b) Plans

The Department of Labor has now provided section 403(b) retirement plans with Form 5500 Reporting Guidance and Transition Relief in Field Assistance Bulletin No.2009-02. Plan sponsors will be required to file a more detailed annual reporting beginning with 2009 plan years. The guidance addresses reporting of 403(b) annuity contracts and the requirement for audited financial statements.

• 990-N Final Regulations

The IRS issued final regulations regarding the 990-N, the annual electronic notice for small tax-exempt organizations. The final regulations did not substantively change the temporary regulations. Read more information about the e-Postcard filing requirement.

• IRS Workshops Coming...

Indianapolis (September 15, 16, and 17)) and Philadelphia (October 6,7, and 8). You can register here for one-day workshops, designed for administrators or volunteers responsible for a nonprofit’s tax compliance.

Court Cases

In this Section: Wisconsin Court Upholds Property Tax Levy Against Nonprofit | Advocacy Groups File Suit over Violations of Voter Registration Law

Wisconsin Court Upholds Property Tax Levy Against Nonprofit

A Wisconsin circuit court judge has ordered a nonprofit health care group to pay property taxes on equipment and furnishings at its offices, saying it does not pass a litmus test as a “benevolent” organization. The court found that ProHealthCare could be taxed because it supports other for-profit ventures. Deborah Blanks, president of the Wisconsin Nonprofits Association, characterized the case as an example of governments turning to tax-exempt entities to replenish depleted public coffers, “something that a lot of nonprofits are going to have to look at.”  Milwaukee Journal Sentinel, 7/9/09

The National Council of Nonprofits invites readers of the Policy News to alert us to other threats against nonprofit tax exemptions.

Advocacy Groups File Suit over Violations of Voter Registration Law

A coalition of voting rights groups has filed lawsuits against two states, Indiana and New Mexico, for failing to adequately implement a section of the National Voter Registration Act, commonly known as the Motor Voter Law. The groups charge that the states' public assistance agencies and motor vehicle offices have not met their responsibilities to offer residents the opportunity to register to vote. Read more at the OMB Watch website.

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Webinars and Resources

Upcoming Webinars

• Finding More Value in Volunteers During the Recession - FREE webinar
August 3, 3:00 p.m. EDT. Register here. Dr. Lester Salamon from the John’s Hopkins Nonprofit Listening Post Project will discuss new findings indicating nonprofits are turning to volunteers to help fill the gaps during the economic crunch. Shannon Maynard of the Grameen Foundation’s Bankers Without Borders will join him to share strategies for increasing the value organizations get from each volunteer.  You can also read Dr. Salamon’s research brief.

•    "Nonprofits and the 2010 Census" - FREE webinar
August 4, 3:30 ET -  sign up today! Learn more about the special role nonprofits can play in the 2010 census. All participants will receive a 2010 Census "Starter Kit" with sample fact sheets and Census resources.

Applying for Federal Grants? Download a copy of our webinar.

New Resources

•   Is your nonprofit organization considering using pro bono and highly skilled volunteers? If so, the Nonprofit Readiness Toolkit for Pro Bono Volunteering will help to outline a process for building on your existing volunteer program and to anticipate how to best manage these specialized volunteers to enhance your organization’s work. Check out the many other resources available to help nonprofits be more strategic with their volunteers by visiting the Online Resource Center of the Corporation for National and Community Service.

•    Social Innovation Fund. The Corporation for National and Community Service has posted a fact sheet about the new Social Innovation Fund, which will provide grants to help nonprofit groups expand successful social projects.

•   Disaster Prep. The H1N1 flu threat is expanding and could dramatically increase workforce absenteeism. Check out the National Council’s website resource page on “Nonprofits and Disaster Preparedness.”

•    Visit the Center for Faith-based and Neighborhood Partnerships (The Partnership Center) website to find resources for nonprofits and community organizations seeking to increase their impact in their communities, make the most of what the U.S. Department of Health and Human Services has to offer.

•    Alliance for Justice has compiled free web-based state law resources on campaign finance and ballot measures, lobbying disclosure and voter registration issues. These resources are currently available for: Arizona, California, Colorado, Florida, Maine, Michigan, Minnesota, Missouri, Montana, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Virginia, Washington and Wisconsin. More states will be added in the coming months. If you are interested in accessing these resources, please request a free pass code here.

•    A new report by the American Civil Liberties Union (ACLU) documents how U.S. counterterrorism laws harm American Muslim charitable giving and negatively affect nonprofit organizations' ability to carry out their work. The report is based on over 100 interviews with charity officials, religious leaders, and former Treasury Department employees.

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State Policy Developments

In this section: Special State Focus: UPMIFA Update | New Bills Introduced

Special State Focus: UPMIFA Update

Congratulations to nonprofits in Illinois (HB 811), Massachusetts (SB 2078), Missouri (HB 239), New Jersey (S-2583/A-3871) and Wisconsin (SB 31) for recently getting the Uniform Prudent Management of Institutional Funds Act (UPMIFA) adopted in those states.

UPMIFA, the latest version of the uniform law governing management of funds in nonprofits, allows nonprofits more flexibility in spending endowment funds.  The predecessor to UPMIFA, the Uniform Management of Investment Funds Act (UMIFA), placed strict limits on nonprofits spending from endowments when the funds fall below their original amount. These restraints on spending were intended to insulate nonprofits from the dangers of irresponsible spending. However, many in the nonprofit sector are finding that the old laws hurt more than help.

Some nonprofits, particularly during the current economic downturn, have been constrained in the spending under the old law. UPMIFA helps nonprofits by setting the new standard at "good faith, with the care that an ordinarily prudent person in a like position would exercise under similar circumstances." The law provides a less rigid formula that is intended to require nonprofits to consider a number of factors when deciding whether or not to dip into their endowments, including the "duration and preservation" of their endowment funds, and the conditions of the economy.

According to the Uniform Law Commission, 41 states and the District of Columbia have adopted UPMIFA. For more information about UPMIFA, visit the UPMIFA Website.

 

New Bills Introduced

In this section: Fundraising and Solicitations | Taxes | Miscellaneous

State legislators regularly introduce dozens of bills that impact all nonprofits in their respective states. Below is a recent sampling of such bills, listed first by category, then alphabetically by state. Note that the National Council does not post comprehensive tracking of state legislative or regulatory changes. For more detailed information on public policy issues at the state level you can find your State Association's policy section here. Unless otherwise noted, the bills below have not become law.

Fundraising and Solicitations

CA | Procedures for Waiver of Regulations

AB 488 would amend existing law concerning agreements with nonprofit agencies to encourage innovation and development of children's services and the child welfare system. It would allow the State Department of Social Services to require an independent evaluation and report whenever regulations governing foster care payments or the operation of group homes in the implementation of the agreements are waived as permitted by law.

CA | Prompt Pay Act Amendment

SBX4 16, passed as part of a state finance bill, amends the California Prompt Pay Act by requiring late payment penalties to be paid to the claimant only when a payment is not issued within 45 calendar days from state agency receipt of the undisputed invoice, and the state agency fails to submit a correct claim schedule by the required date, or the Controller fails to make a payment within 15 calendar days of receipt of the claim schedule from the state agency.

CA | Online Raffle Advertisements

SB 200, passed on July 27, 2009, permits certain nonprofits to advertise raffles over the Internet under certain conditions. State law formerly prohibited such advertisements. For more information, visit member California Association of Nonprofits Website.

OH | Instant Bingo Dispensers

SB 153 would change the definition of "instant bingo ticket dispenser" and authorize certain nonprofits to purchase, lease, and use instant bingo ticket dispensers.

WI | Fund Created for Community Development

AB 75, passed on June 29, 2009, includes funding for a newly created Forward Innovation Fund (FIF) for the purposes of awarding grants or making loans to nonprofits and other organizations that specialize in economic or community development. The same bill, featured in last month's Policy News, also included important legislation preserving property tax exemptions for Wisconsin nonprofits. For more information, see our June Policy News and visit member Wisconsin Nonprofits Association's Website.

Taxes

AZ | Property Tax Exemptions for Nonprofit Charter Schools

HB 2346, passed July 10, 2009, amends existing law to provide a property tax exemption for property that is leased to a nonprofit charter school and used for educational instruction in any grade or program through grade twelve. The bill also provides a property tax exemption for property owned by a nonprofit and leased to a nonprofit educational organization if the property is used for educational instruction in any grade or program through grade twelve.

AZ | Tax Deductions for Charitable Contributions

HB 2286 would amend the law regarding tax deductions for charitable contributions by changing the deduction for a married couple from a maximum of $300 to $400, and by requiring itemization of deductions in order to qualify. The bill would also specify the required contents of a charitable organization's written certification for receipt of tax deductible contributions.

LA | Sales and Use Tax Exemption Clarified

HB 756, passed on July 8, 2009, clarifies the sales and use tax exemption applicable to the sales proceeds of a nonprofit sponsored event by providing that "necessary expenses" include expenses such as fees paid for guest speakers, chair and table rentals, and food and beverage utility related items connected therewith. Use of event proceeds to cover such expenses will not prevent the nonprofit from receiving the tax exemption.

Miscellaneous

DC | ARRA Job Creation

B18 362/PR18 398, passed on 7/20/09, requires all jobs created by the American Recovery and Reinvestment Act of 2009 (ARRA) to be listed on the Department of Employment Services website, and that the mayor quantify the number of District residents who are hired by contractors, groups, and nonprofit organizations receiving ARRA funding.

 

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