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Nonprofit Advocacy Matters | October 20, 2014

Posted: 
October 20, 2014

Federal Issues

Pressure Builds for Quick Action on End-of-Year Tax Bill

Nonprofit champions of improved tax incentives for charitable giving are receiving indirect, but powerful, support from an unusual source: the Commissioner of the Internal Revenue Service. John A. Koskinen, IRS Commissioner, is warning Congress that passing tax legislation reviving expired tax provisions, including three charitable giving incentives, in December or later could delay refunds for millions of taxpayers. The comments are seen by lawmakers as a challenge to act swiftly after the elections to pass a tax bill. Senate Finance Committee Chairman Ron Wyden (D-OR) is urging action on a two-year extension of the expired tax breaks, known as the EXPIRE Act, that passed out of his committee. Nonprofit advocates are pushing for inclusion of the components of the America Gives More Act as part of any end-of-year tax bill.

Sequestration Back in the News

Nonprofits that utilize the small-employer health credit to help pay for employee health insurance coverage will see a 7.3 percent reduction next year as the result of the automatic, across-the-board spending cuts known as “sequestration” that were enacted in 2011. The shrinking health credit is only one of thousands of arbitrary cuts that can adversely affect the work of charitable nonprofits. According to the IRS, these and other cuts will occur “unless and until a law is enacted that cancels or otherwise impacts the sequester.” Last December, House and Senate budget negotiators reached an agreement to avert another round of sequestration cuts, but that deal expires next year. White House officials revealed last week that President Barack Obama will propose sequester relief in his fiscal 2016 budget due to be released in February. 

Pastors Defy Ban on Politicking by Charitable Nonprofits, Again

More than 1,800 pastors from all 50 states have preached partisan politics from the pulpit this month, intentionally defying the ban on charitable nonprofits engaging in partisan political activities, according to CNS News, a conservative news source. The religious leaders are participating in the fourth bi-annual Pulpit Freedom Sunday, a project of the Alliance Defending Freedom, an Arizona-based Christian activist group. The participants are encouraged to preach messages “representing biblical perspectives on the positions of electoral candidates.” The protest is aimed at the law governing all charitable nonprofits, including churches, that permits 501(c)(3) tax-exempt status only if an organization “does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.” The Internal Revenue Service, which enforces the tax law, has not taken action against any of the preachers since Pulpit Freedom Sunday began in 2008.

State and Local Issues 

Recent Cuts to Child Welfare and New Initiatives

The resources that child welfare agencies and nonprofit organizations receive from federal, state, and local sources decreased by 8 percent between 2010 and 2012, according to the latest Child Trends analysis. Although federal spending was higher in 2013 compared to 2012, it has declined overall since 2010, the Urban Institute reports. The Urban Institute report further projects that outlays on children will drop as much as 10 percent through the next decade. All states experienced decreases in funding, with Connecticut, Louisiana, Nevada, New Hampshire, and Wyoming feeling the largest declines. In response to the cuts, states have turned to flexible federal funding sources, such as the Performance Partnership Pilots for Disconnected Youth, and a $650 million federal grant benefitting children and families programs in Maryland. 

Candidates Respond to Nonprofit Questionnaires

Nonprofits across the country are utilizing the election-year tool of nonpartisan candidate questionnaires to record the office hopefuls’ views on the issues of the day and to remind the candidates and the public of the important societal and economic impact that nonprofits have in their communities. The approach tends to be tailored to the individual states, but the response has been impressive. The North Carolina Center for Nonprofits invited all 263 candidates for the General Assembly to participate in its questionnaire, and sent along a fact sheet on the nonprofit sector to the candidates. The Maine Association of Nonprofits invited all candidates running for national or state office from the state to address questions about their own experiences with nonprofits and their views on some important policy issues. Likewise, the Massachusetts Nonprofit Network asked the gubernatorial candidates from all parties to respond to a survey and express their views on the importance of nonprofits in their policy agendas. The unedited responses returned to the nonprofits from the candidates in North CarolinaMaine, and Massachusetts can be found here.

How did the candidates respond and what do they think of the work of charitable nonprofits in their communities? Here are some notable responses from across these three states from would-be politicians of all political stripes:

  • “My experience with [nonprofit] organizations has made me realize that nonprofits partner with government to provide essential services to our communities.”
  • “Charities serve a very important role in my life and the life of our community and world. My policy positions will always be to benefit charitable organizations and keep the government out of their way.”
  • “I will continue to work to protect the tax exemptions for contributions to nonprofit organizations…. Donations to nonprofits are important solutions to help those who need help, to preserve important ideas and assets, and to improve quality of life for all.”
  • “I believe that nonprofits provide needed services and programs which enhance our lives while offering opportunities to network, build friendships, and volunteer in areas of our choice which also builds character and communities.”
  • “The work that nonprofits do is critical. These nonprofit organizations are comprised of amazing volunteers, supporters, and staff that provide exceptional services and programs.”
  • “As Governor, I am committed to being a partner with nonprofits and working diligently to increase their impact here.”

Taxes, Fees, PILOTs

  • Taxes: Residents in Urbana, Illinois are posting signs in opposition to Carle and Provena Covenant Medical Center’s new property tax exemption, claiming that other property owners are now forced to bear the tax burden. The medical center was granted tax-exempt status in recent years based on the amount of charity care it provides to the community, as permitted under a 2012 statute. A spokesperson for the hospital explained that its tax exemption resulted in a $6 million decrease in revenues for the city, while the hospital provided $7 million in free or discounted care to the residents of the community.
  • Fees: North Strand Housing Shelter in North Myrtle Beach, South Carolina, is facing a $40K bill for infrastructure improvements and impact fees from the local water utility. The shelter was not expecting an impact fee; the water company says it does not distinguish between for-profits and nonprofits in cost for service. The shelter has offered a payment plan to the nonprofit to not gut its annual $70K budget.

BP Challenges Settlements Made to Nonprofits after Oil Spill

BP is attempting to claw back payments made to nonprofits hurt by the 2010 oil spill in the Gulf of Mexico. Nonprofits received payments for damages after experiencing decreases in grants and donations following the spill. Damages were awarded to nonprofits in the affected area based on a court-ordered formula with no cap on funds. London-based BP is now claiming a misinterpretation by the claims administrator resulted in BP covering claims it never agreed to. Lawyers for the nonprofit claimants worry that this case, if it is picked up by the Supreme Court, will be a test case that could open the door to challenges of hundreds of thousands of damage-claim awards. 

Advocacy in Action 

Advancing Nonprofits' Boards Toward Every Day Advocacy

Tim Delaney, President and CEO of the National Council of Nonprofits, will tell you – actually, he’ll tell anyone who will listen – that one of the most persistent and pernicious barriers to effective advocacy by nonprofits is the misperception by nonprofit board members that they cannot or should not advocate for the organization. As he tells it, and as most of us know, many board members see their job as to focus just on internal governance issues, such as reviewing financial reports and setting the general direction of the organization. Getting board members to connect their passion for the nonprofit’s external mission and engaging actively in advocating on behalf of that mission has been a difficult and frustrating task. Until now.

Stand For Your Mission is a new campaign launched to raise awareness – specifically among nonprofit board members – that being an external advocate for the nonprofit’s mission is an important and expected role for every board member. The campaign is designed to unleash the full potential of nonprofit organizations to advance their missions in their local communities by engaging board members more directly as advocates on behalf of their organizations.

The specific goals of the Stand for Your Mission campaign are to:

  • Bring about a sustainable shift in the understanding and expectations around board engagement in advocacy;
  • Move advocacy from an ancillary to a key board leadership role; and
  • Strengthen the nonprofit sector’s ability to advance the public good.

The National Council of Nonprofits has been collaborating with BoardSource, the Alliance for Justice (with its Bolder Advocacy initiative), the Forum of Regional Associations of Grantmakers, the Campion Foundation and the John S. and James L. Knight Foundation, to curate a set of core resources for board members, CEOs, and grantmakers. Please share the Stand for Your Mission discussion guide as a useful resource with your board.

The Stand For Your Mission campaign advances the Council of Nonprofits’ mission of changing the culture around nonprofit advocacy so it is embraced as an effective, everyday tool for advancing nonprofit missions. Advocacy is not an add-on activity; it is core mission work. Advocacy is not just legislative lobbying, but also standing up and promoting your nonprofit’s mission with business leaders, government officials, news reporters, and even your neighbors. It moves the nonprofit community toward the simple concept of advancing mission through every day advocacy.

Nonprofit Advocacy Matters | October 6, 2014

Posted: 
October 6, 2014

Federal Issues

OMB Webcast Provides Clarity, Highlights Need for Collaboration with Nonprofits

The Uniform Guidance from the White House Office of Management and Budget will be binding on most of the contracts and grants between state and local governments and nonprofits when federal discretionary funding is utilized, according to government officials during an OMB webcast conducted on October 2. Presented as a “conversation” among stakeholders, the webcast provided opportunities for various interests affected by the Uniform Guidance to raise questions and seek clarity on key topics that have caused confusion. OMB officials kicked off the event by discussing how the new Uniform Guidance, among other things, is intended to lower barriers to entry for smaller nonprofit organizations to perform services in communities on behalf of governments.

Matt Hammoudeh, Assistant Secretary at the Illinois Department of Human Services, discussed the steps taken in Illinois to implement numerous requirements of the OMB Uniform Guidance and to change state policies to ensure consistency across government programs. In responses to questions from David L. Thompson of the National Council of Nonprofits, Hammoudeh confirmed that the requirement in the Uniform Guidance for governments to pay nonprofits their indirect costs is binding on governments at all levels of contracting and grantmaking, and that nonprofits cannot be asked to waive their reimbursement rights. The Illinois official also made a strong statement against arbitrary caps to indirect costs, pointing out that caps undermine nonprofit innovation and hurt service delivery. Hammoudeh stressed the importance of the lesson learned by the state of collaborating with nonprofits at the beginning of the process to develop the changes needed to implement the OMB Uniform Guidance. He note that nonprofits are the experts who can identify in advance the positive and negative impacts that new policies will have on delivering services in communities. Other panels during the webcast addressed questions related to audits and internal controls, procurement, and innovative funding. OMB will post a recording of the webcast within a week. 

Public Supports Clear Rules on What Counts as Politicking 

A large majority of American voters (60 percent) believe that having clear rules defining political activity for social welfare organizations is important, according to a recent public opinion poll. Eight in 10 voters believe that political operatives and donors take advantage of vague rules and blurry lines defining what is and is not permitted. Among voters who had an opinion, a majority favored changing the way that activities of social welfare nonprofits organized under Section 501(c)(4) of the tax code are regulated to establish clearer and fairer rules for what counts as partisan political activity. The poll, which was conducted for Public Citizen and released in conjunction with the Hudson Institute, comes at a time when the Internal Revenue Services is seeking to clarify the rules for 501(c)(4) social welfare nonprofits (as opposed to charitable nonprofits) and recover from a scandal involving alleged targeting of various groups based on presumed political leanings.

Communications Challenge: When Technology Meets Regulation

Calls and texts to old cellphone numbers could result in significant liability, according to legal pleadings in numerous federal class-action lawsuits. Briefly stated, nonprofits and other callers could potentially be liable if they make calls or send texts to cellphone numbers that they previously received authorization to call but, unbeknownst to the caller, had been reassigned to a new person who has not given “prior express consent” to receive communications. According to one report, more than 37 million cellphone numbers have been reassigned in the past 10 years, so the likelihood of organizations having old numbers on their records is great. The National Council of Nonprofits filed comments with the Federal Communications Commission (FCC) asking for an expedited declaratory judgment confirming that “callers who obtain prior express consent from a called party are not liable for phone calls and text messages to telephone numbers for which the caller has obtained prior express consent, but that have been reassigned without the caller’s knowledge, or for other types of ‘wrong number’ calls.” The FCC may rule on the issue this fall.

State and Local Issues

Candidate Forums Connecting Office Seekers with Nonprofit Missions

This election season several state associations of nonprofits are using candidate forums in non-partisan ways to educate the voting public about the candidates and their positions. Providers’ Council in Massachusetts recently hosted the Human Services Gubernatorial Forum where four candidates addressed 700 attendees on human services topics. Significantly, all four candidates expressed their support for a 2008 statute that was designed to bring human services reimbursement rates up to market value, but whose full implementation has been delayed. The video of the event can be found here. Connecticut Association of Nonprofits co-sponsored the state’s second 2014 Gubernatorial Debate last week. Big topics of the debate included economic growth in the state and education reform. Go here for a recording of the Connecticut debate.

The “No Vote No Grumble” campaign, of which the Hawai`i Alliance of Nonprofit Organization is a partner, will hold a gubernatorial candidate forum on Wednesday, October 8th. The mission of No Vote No Grumble is to “increase civic engagement, including registering and educating voters, especially with the underrepresented/underserved communities.” HANO stresses that this is an important opportunity for nonprofits to share their community’s concerns with candidates. The Colorado Nonprofit Association will be holding a forum during its 2014 conference that will focus on the races for Secretary of State and Attorney General. Colorado’s PBS station will record and air the forum, giving the public the opportunity to learn more about the candidates in these “down ticket” races that often get overlooked. Each forum gives nonprofits the opportunity to educate policymakers on the work and impact of the nonprofit community to their respective states and the ways in which lawmakers can work with nonprofits to identify and promote solutions in communities.

Taxing Student Housing on the Rise

The tax-exempt status of student housing facilities is under attack in the courts, at city hall, and in the ballot box. The Texas Supreme Court agreed last week to decide whether the Texas Student Housing Authority must pay property taxes on a dorm facility on the campus of Texas A&M University. County tax assessors had determined that the use of the facilities during summer months by high school students disqualified the dorms under Texas law. In Waleska, Georgia, the City Council is considering a tax on student residence halls at Reinhardt University, a local nonprofit. The Mayor said that the idea for the tax on the small Methodist university was proposed by the state Department of Community Affairs. The city would base the tax on the state’s hotel-motel tax, but is awaiting comment from the Attorney General on the legality of the proposal. Georgia voters in November will also be voting on whether to tax student housing across all public institutions in the University System of Georgia.

Taxes, Fees, PILOTs

  • Taxes: A bill in Pennsylvania would impose real estate taxes on nonprofits owning property valued at more than $200,000. The bill’s sponsor has repeatedly introduced measures to tax tax-exempt nonprofits in the Commonwealth based on the common misconception that taxpayers end up paying more, but without recognizing the numerous community benefits of nonprofits, including the lower cost to governments.
  • PILOTS: Pittsburgh’s Mayor has proposed his budget for 2015 that assumes $24 million annual contributions, or payments in lieu of taxes (PILOTs), from the city’s largest nonprofits. Large landholding nonprofits, such as University of Pittsburgh Medical Center, have expressed a willingness to negotiate on contribution size, as long as they are allowed some say in how the funds will be allocated.

California Adopts Paid Sick Leave Employment Policy

Governor Brown has signed the law requiring nonprofits and other employers, starting in July 2015, to pay employees one hour of sick leave for every 30 hours worked. In an alert to nonprofits, CalNonprofits reports that the amount of sick time used can be capped by employers at 3 days per year (24 hours) and any unused sick time at the end of the rolling-12-month period must be rolled to the next 12-month period. 

Southern Voters Consider Income Tax Restrictions

Voters in Georgia and Tennessee will have the opportunity on November 4 to alter their states’ constitutions to significantly restrict the power of their legislatures to levy personal income taxes. Voters in Georgia will decide on Amendment A, which would permanently cap the top income tax rate at six percent. Polls show that the ballot measure has broad popular support. If approved by voters in Tennessee, Amendment 3 would prohibit the legislature from levying, authorizing, or permitting any state or local tax upon payroll or earned personal income. Critics of both measures argue against removing taxation from the tools the legislatures have to address economic downturns and unforeseen challenges.

Tax Approved to Fund Philadelphia Schools

Pennsylvania passed a cigarette tax intended to provide additional funding for Philadelphia city schools. The new tax comes in time to avoid layoffs of more than 1,000 employees. Public schools in the area had been looking into alternative funding streams, such as fundraising through social media, as the vote on the tax loomed. However, a bill is still advancing in the state Senate that would lock in education cuts and result in future funding challenges that could result in appeals to nonprofits and the public to fill resource gaps.

North Carolina Budget Cuts Demanded

The North Carolina Office of State Budget and Management has instructed state agencies that their FY2015-17 budgets must be at least 2% lower than their current budgets. According to the North Carolina Center for Nonprofits, state agencies in the past imposed disproportionate cuts on programs affecting populations and communities served by nonprofits through state contracts and grants. 

Advocacy in Action

Because Now is When Candidates are Paying Attention

The people and communities served by charitable nonprofits “win” elections when all the candidates learn about the significant impact of nonprofits, look to nonprofits as community problem solvers, and agree with the policy priorities of nonprofit organizations. It’s not a partisan matter of who gets elected, but about using the elections to inform candidates and the public about the value of the contributions of nonprofit organizations. The non-partisan election-related activities performed by state associations of nonprofits and many other organizations across the country this election season are helping to educate voters and promoting good policy results.

The lead state article, above, highlights effective non-partisan advocacy actions in Colorado, Hawai’i, and Massachusetts in using candidate forums to focus on the work of nonprofits in communities. Other organizations, like the North Carolina Center for Nonprofits, are engaging candidates through questionnaires that address a broad array of issues that will help voters gauge the priorities of each public office hopeful. Still other nonprofit advocates are sharing their public policy and legislative agendas with all of the candidates with the expectation that some will recognize the value, adopt the priorities, and give public voice to the needs of the communities that nonprofits serve. In all of these cases the same strategy is at play: communicate with the candidates about policy priorities while they are most interested in what constituents think – from now until election evening.


Worth Quoting

“The cost principles are designed to provide that the Federal awards pay their fair share of the costs recognized under these principals.”

- Frequently Asked Questions, U.S. Office of Management and Budget, August 29, 2014, explaining the underlying reason for the mandate in the OMB Uniform Guidance that pass-through entities (typically state and local governments) reimburse nonprofits for their indirect costs. 

Worth Reading

Federal Grant and Contract News for Nonprofits, Venable LLP, September 2014, highlighting new procurement standards that federal grantees and subrecipients will be required to follow under the OMB Uniform Guidance.

Worth Studying

Income Growth Varies Widely Across States, Governing, September 19, 2014, providing state- and county-specific data on personal income growth since 2000 through 2011, utilizing three interactive maps. 

Numbers in the News

On November 4, voters will decide the following:
435 seats in the U.S. House of Representatives
36 U.S.Senate seats
36 Governorships
31 Attorneys General races
6,049 state legislative seats in 46 states
136 statewide ballot measures in 41 states

Nonprofit Advocacy Matters | September 22, 2014

Posted: 
September 22, 2014

Celebrate National Voter Registration Day

Join Nonprofit VOTE, the National Council of Nonprofits, the National Association of Secretaries of State, and more than 1,500 organizations (and counting) in celebrating the nonpartisan National Voter Registration Day on September 23rd. National Voter Registration Day is a time to promote voter registration and register voters ahead of registration deadlines. National Voter Registration Day falls 6 weeks before Election Day and is the time to ensure our communities are registered and ready to participate. Why nonprofits? Because we reach audiences no one else does and because our community has always been about promoting democracy, engagement, and community building.

Taking action is easy. Pick and choose what information you would like to share with your staff, board members, clients, family, and friends from the free Voter Information Toolkit such as the online voter registration tool, and find a National Voter Registration Day event near you. Learn more at www.NationalVoterRegistrationDay.org and use #CelebrateNVRD on social media to spread the word!

Federal Issues 

Congress Heads Home for the Elections, Much Left Undone

The House and Senate adjourned last week and are not scheduled to return until the week after the November 4 elections to finish the business of the 113th Congress. Despite the calls for action from many Senators, nonprofits, and foundations, Senate leaders did not take up the America Gives More Act, a bill that would make permanent and expand several charitable giving incentives, streamline the foundation excise tax, and extend the time that individuals have to make tax-deductible donations to their favorite charities. Before leaving town, Congress approved the Iraq/Syria military plan and temporarily funded the government into December. The “lame duck” session is expected to address a short “must-do list” that includes a spending bill that runs through the fiscal year (until September 30, 2015), a tax bill containing several policy provisions including extension of expired tax provisions collectively known as “extenders,” and, depending on effective advocacy efforts by the nonprofit community, the components of the America Gives More Act. Learn more about what nonprofits can be doing now.

Consensus on Social Impact Bonds Remains Elusive

Social Impact Bonds remain a hot topic of debate on both sides of the Atlantic with no clear consensus on whether the new funding mechanisms will actually increase the level of resources going to promising social interventions or result in increased costs to governments/taxpayers due to the added layers of activities. On September 9, a House subcommittee held a hearing to discuss the merits of Social Impact Bonds in relation to federal SIB legislation. The bill’s sponsor and several witnesses hailed SIBs as a new, innovative tool to improve social and public health outcomes, s tating that SIBs are a preferable model for funding social programs since they fund results rather than intentions and success is measured by outcomes not inputs. A witness opposed to SIBs, Dr. David Juppe, who conducted an in-depth review for the Maryland Legislature, expressed concern that the funding mechanisms often overstate the cost savings and likelihood of success. He pointed to his research indicating that SIB-financed projects actually increase the costs to government even if the projects succeed. The hearing took place before disparaging words were expressed by British MP Nick Hurd, who previously had expressed support for SIBs when he served as Charities Minister for the conservative government. Hurd stated that social impact bonds are “clunky, take too long and are too expensive to set up,” and that they needed to be improved before pursued in the future.

State and Local Issues 

New York Establishes Nonprofit Coordinating Unit

The State of New York is taking a significant step toward strengthening relationships with nonprofit organizations by creating a new unit within the Division of Budget dedicated to nonprofit issues. The Nonprofit Coordinating Unit will focus initially on addressing late payments and late contracting matters, as well as promoting compliance, presumably including implementation of the federal OMB Uniform Guidance that goes into effect at the end of 2014. The new unit is overseen by Fran Barrett, the Governor’s Interagency Coordinator for Not for Profit Services, who also co-chairs the National Council of Nonprofits' National Task Force on Government-Nonprofit Contracting Reform. “We are excited that this will become a hub for dealing with nonprofit issues,” Barrett said. “As issues surface, they can be resolved more quickly. It strengthens the lines of communication and gives us dedicated resources. We can test new ideas and put new systems into place. This unit will have the clout and capacity to bring some of these ideas to fruition. This shows that the nonprofit sector is a priority for the governor and his administration.”

More States Reinstate Work and Volunteer Requirements for Food Stamp Recipients

Seventeen states will soon see the end to temporary waivers that allowed able-bodied adults without dependents to access SNAP benefits (food stamps) without proof of work or volunteerism, Stateline reports. According to federal law, these individuals may receive SNAP benefits for only three months in a three-year period unless they are actively working or participating in a job-training or volunteer program. The 2009 economic stimulus package allowed states with high unemployment rates to seek waivers for this requirement; almost every state chose to do so. The waiver has been phased out in other states over the past two years due to either improving economic conditions or state preferences. The change to requirements can affect up to 4.6 million SNAP recipients. Nonprofits could see an increase in requests for volunteer opportunities from these individuals. Generally, the National Council of Nonprofits opposes the conditioning of statutory benefits on performance of volunteer or community service, terming the policy “mandatory volunteerism,” because forcing people to "volunteer" imposes increased costs, burdens, and liabilities on nonprofits by creating an influx of coerced individuals.

Government-Nonprofit Contracting Update
New York Salary and Administrative Caps Still Uncertain

Governor Cuomo’s 2012 Executive Order directing state agencies to adopt rules to limit the use of state funds in executive compensation and organizational administrative costs continues to be challenged in the courts. The Executive Order has resulted in two conflicting rulings from trial level courts so far. Last month, a court declined to dismiss a suit filed by several healthcare associations. It is likely that all of this will eventually be decided by the Court of Appeals. The Executive Order caps at $199,000 the amount the state will reimburse for executive salaries at for-profit and nonprofits performing work under contracts/grants with the state. The E xecutive Order also seeks to limit reimbursement for administrative costs (initially capped at 25 percent, declining to 15 percent over the next three years). Nonprofit contractors are recognizing that this arbitrary limit on administrative or indirect costs appears to conflict with the new OMB Uniform Guidance, which expressly requires state and local governments to reimburse nonprofits for their true costs when performing work for the state that is funded using federal grant dollars.

Puerto Rico Increases Charitable Giving Through Tax-Law Change

Puerto Rico’s tax treatment of charitable donations was changed in 2010, resulting in almost 20,000 more residents making a charitable deduction the next year and generating $5 million more in giving to the work of nonprofits across the commonwealth, the NonProfit Times reports. In 2010, Puerto Rico changed its deduction policy to match federal law in the U.S., allowing individuals to deduct 100 percent of donations up to 50 percent of adjusted gross income. Previously, Puerto Rico imposed a 15 percent cap on deductions and a 3 percent income floor. 

Philadelphia Schools Look to New Funding Schemes, Wait for Legislative Action

Continuing a trend of schools seeking new funding streams, Philadelphia public schools are hoping to spark a viral giving trend seeking school supplies, such as paper, for the year. Philadelphia schools opened this year with an $81 million deficit, which some policymakers intend to fill through a $2-a-pack cigarette tax. The Philadelphia school superintendent has said that if the tax isn’t passed by the beginning of October, he will be forced to lay off more than 1,000 employees, including teachers. For the time being, schools are turning to a start-up called Leadnomics to provide everyday necessities, such as paper. 

Additional State and Local Issues

Advocacy in Action 

Advancing Mission through Voter Engagement

So, if a nonprofit works to remain scrupulously nonpartisan as the law and good sense require, why should it get involved in voter registration efforts, such as National Voter Registration Day, and other election-related activities? Good question. Let’s ask some experts:

Nonprofit VOTE will tell you that “Voter engagement is a critical part of nonprofit work because it not only empowers the people and the communities we serve, but it also helps us further our missions. Voter engagement makes our nonprofits relevant both during and after elections, helping to make us part of critical public policy discussions and allowing us to weigh in on our issues.”

The National Council of Nonprofits’ president and CEO Tim Delaney observes: “Nonprofits helping people register to vote so they can have a say in the future of their communities are honoring the noble quest that President Lincoln challenged us all to do – ensure ‘that government of the people, by the people, for the people, shall not perish from the earth.’”

The Colorado Nonprofit Association views voter engagement in terms of what nonprofits give and get back from the community: “Nonprofits play various roles in building healthy communities. Nonprofits rely on our communities to provide support for our causes, volunteer for our events, and keep us informed on how we can best help. Community involvement is also vital for ensuring elected leaders govern wisely on behalf of the people they represent.”

CT Nonprofits, the state association of nonprofits in Connecticut, goes for the two-pronged approach, explaining that the two most important roles of nonprofits while engaging in nonpartisan election-related work are: “educating candidates about the critical work your organization does in the communities the candidates represent; and encouraging all of your organization's constituents to vote - your staff, volunteers, customers, clients, and all other stakeholders.”

The Vote with Your Mission campaign of CalNonprofits is firmly committed to these principles, stressing, “When nonprofits use our voting power, we advance our causes, make our voices heard and change the world for the better.” Equally strong statements of purpose have been registered by state associations of nonprofits across the country, including Arizona, Minnesota, North Carolina, and Pennsylvania.


Worth Reading

A Board Member's Guide to Nonprofit Overhead, by Jan Masaoka and Steve Zimmerman, Blue Avocado, September 1, 2014, explaining what “overhead” costs are and what nonprofit board members need to know. Here’s a significant quote worth repeating: “overhead costs are crucial costs: liability insurance, staff training, computers and fundraising staff are all necessary costs. Overhead is necessary for credible financial statements, quality services, safe facilities, and the costs of fundraising.”

Nonprofits: Bill would free more funds, Sherri Welch, Crain’s Detroit Business, September 21, 2014, quoting Rob Collier, president of the Council of Michigan Foundations as saying that the America Gives More Act, H.R.4719, is "the biggest thing for the charitable sector since the introduction of the IRA charitable rollover in 2006."

Take Away Harvard’s Nonprofit Status, Annie Lowrey, Slate, 9/10/2014, arguing that “mega-rich schools hoard funds and real estate, tax-free, to the detriment of local communities or federal coffers,” and proposes treating some nonprofit higher-education institutions differently by imposing “a wealth tax on endowments over $1 billion, property taxes, or a tuition sales tax.”

Numbers in the News

Focus: Charitable Giving

$17 and $34 billion less, annually

The estimated reduction in charitable giving by individuals if Congress were to adopt the tax reform proposals of Ways and Means Committee Chairman Camp (R-MI).

Source: Preliminary Estimates of the Impact of the Camp Tax Reform Plan on Charitable Giving, Urban Institute Center on Nonprofits and Philanthropy and the Urban-Brookings Tax Policy Center, August 2014, which determined that the total impact of the tax reform discussion draft would reduce individual giving in the range of 7 to 14 percent.

Worth Studying

Tax Revenue Recovery Varies Widely; 26 States Still Behind, Pew Charitable Trusts, August 19, 2014. See whether your state’s tax revenues have recovered from the Great Recession, when adjusted for inflation. Hint: Some states are doing very well, but most have not yet fully recovered.

Worth Quoting

“The Denver Office of Strategic Partnerships (DOSP) was created in January 2004 to serve as a liaison between the City of Denver and the nonprofit sector. DOSP serves as a catalyst to leverage the best of Denver's public and nonprofit sectors to engage in innovative and collaborative work. DOSP believes that by working collectively, the public and nonprofit sectors can be even more efficient and effective in strengthening Denver's communities.”

- Denver Office of Strategic Partnerships website, quoted here to show that partnerships between governments and nonprofits is a way of life in Denver, and can be elsewhere by embracing the truth that both sectors can better serve the public through collaboration.

Nonprofit Advocacy Matters | September 8, 2014

Posted: 
September 8, 2014

Federal Government Clarifies New Grant Reforms

The federal government has taken steps to deliver on its recent promise that nonprofits will be paid the true costs for performing work on behalf of governments. In recently published Frequently Asked Questions (FAQs), the federal Office of Management and Budget (OMB) removes much of the gray area in the mandate that pass-through entities (typically state and local governments) using federal funds must pay federally negotiated rates for indirect cost or, if such a rate doesn't exist, pay at least a 10 percent rate to eligible nonprofits. The FAQs also provide preemptive instructions on what governments may not do to avoid complying with federal grantmaking reforms that take effect in December. See the September 2 special edition of Nonprofit Advocacy Matters for a brief analysis of the FAQs and related information.

Nonprofits with government contracts and grants should review the new FAQs in detail and adjust their practices accordingly. Nonprofit leaders can help in the development of tools to turn the new reforms into reality for their organization and others by completing this short survey and by encouraging colleagues at other nonprofits to fill it out as well. 

Federal Issues 

America Gives More Act Update
A Short Shrift Senate Session, Unless …

Congress is scheduled to return to Washington today with a goal of passing spending legislation to fund the federal government through the elections, address a few other pressing matters, and leave town as quickly as possible. Earlier calendars showing that the House and Senate will be in session for 15 days this month may get tossed, as congressional leaders are now predicting a shorter, rather than longer, work period in order to enable politicians to return to their campaign trails. A Washington Post editorial today expresses the dissatisfaction of many: “Instead of passing bills into law and allowing voters to judge their work, the legislators appear to be pushing hopes of any serious lawmaking off into the safety of a post-election, lame-duck session." Unless Senators can be convinced to immediately take up and pass the House-passed America Gives More Act (H.R.4719) in September, many of the incentives for giving to the work of nonprofits in communities will be lost.

State associations of nonprofits and their members have been making calls, writing letters, and meeting with policymakers, all with the goal of motivating Senators to take up the legislation. The foundation community is mobilizing in support of the bill as well, by, among other things, joining forces with their state associations of nonprofits in sending letters to their Senators and encouraging colleague organizations to contact their Senators. Many foundation leaders across the country are taking public positions both in support of the legislation and urging immediate action. See last week’s op-ed by Vikki Spruill of the Council on Foundations, and articles by foundation leaders in Utah, New Mexico, and West Virginia. The National Council of Nonprofits takes the position that conventional wisdom – the view that the Senate doesn’t have time to take up the America Gives More Act – can be overturned if everyone committed to the mission of nonprofits, be they board members, volunteers, donors, clients, or employees, calls their Senators to deliver a clear message: “Don’t leave Washington in September until the Senate passes the America Gives More Act; our communities are counting on you.Learn more about what individuals can do to support the America Gives More Act.

Partisanship Splits Investigation on IRS Political Bias

The Internal Revenue Service inspector general improperly omitted a finding that there was "no evidence of political bias” when he issued a May 2013 audit alleging that the IRS engaged in political targeting of applicants for 501(c)(4) nonprofit status, according to a new report from the Democratic members of the Senate Permanent Subcommittee on Investigations. In a detailed dissent, Republicans on the subcommittee assert that the IRS was indeed biased against conservative-leaning applicants for social-welfare status. Both sides reviewed over 800,000 pages of documents and reached polar-opposite interpretations of the facts. Read the full subcommittee report, majority statement, and minority statement.

State and Local Issues 

States Consider Performance-Based Budgeting

More states are turning to “performance-based budgeting,” an approach for allocating budget funds based on measurable program successes or outcomes. As Stateline reports, the idea is to use specific measures of past performance to assess whether a particular budget item, such as a child nutrition program or a new road, is worth the expense. Eleven states have shifted to a “Results First Initiative,” which planners believe will bring accountability and cost-outcome analysis to all levels of state government. However, the results of this and similar performance-based approaches have been mixed so far. Since the process relies heavily on accountability, its success depends as much in how compliant state leaders and agencies are in implementing the approach as it does in how well successes can be measured and economic conditions can be anticipated. A 2014 analysis by the National Association of State Budget Officers concluded that “despite widespread interest and growing use of performance budgeting practices, the process of actually tying performance information to funding decisions in an effective, meaningful and practical manner continues to be a major challenge for all levels of government.”

Billions Pour Into State Campaigns

Money flowing into state political campaigns and ballot initiatives may exceed $3 billion this year, reflecting the growing recognition that the real policy action is happening in the states, not at the federal level, according to Stateline. The projections for this year are 50 percent higher than six years ago when state candidates, legislative caucuses, and state political parties raised $2 billion in the 2007-2008 election cycle, according to figures compiled by the National Institute on Money in State Politics. Observes Professor Paul Brace of Rice University, there is “more power and influence on policy at the state level than 30 years ago,” which is one reason for the rapidly increasing amount of money being spent on state races. Another reason is “the fact that a wide array of hot-button issues, such as educational standards, the Affordable Care Act, immigration, gay rights and gun control, are being shaped and implemented in the states because of political gridlock in Washington.” Further, the Citizens United decision of the U.S. Supreme Court removed limits on independent expenditures levels by corporations and unions at not only the federal, but also the state level. 

Taxes, Fees, PILOTs

  • Taxes: The city council in Nome, Alaska is considering eliminating sales tax exemptions for the city’s nonprofit charities and churches in an attempt to increase city revenues. While other options for filling city coffers were evaluated at an August meeting, stripping nonprofits of their tax exempts was touted as the “easiest to implement” by city administrators.
  • Fees: Nearly 80 churches, schools, and other nonprofits in Oahu, Hawai’i will now have to start paying for trash collection after the city decided to discontinue its free refuse collection service for nonprofits that had been in place for decades. 

New Jersey City to Pull Grants from Nonprofits

City administrators in Paterson, New Jersey recently announced plans to rescind over $800,000 in grants to a dozen nonprofits providing food and assisting the elderly and instead use the funds to pay for street repairs. The grant money, which the City had previously awarded to the nonprofits for various community programs through the federal Community Development Block Grant program, comes after a change in administrations and may result in staff layoffs and shuttering of certain community centers, such as the Grandparents Relatives Care Resource Center. The grants had been awarded and approved by the City Council, and in reliance of those official actions nonprofits may already have incurred costs. But the city’s new administrators claimed that the money did not yet belong to the nonprofits since the formal contracts had not been signed.

Nonprofit Commercial Activities Undermine Property Tax Exemption in North Carolina

A conservation nonprofit in Western North Carolina has been denied property tax exemption because the state Court of Appeals ruled that some limited commercial activities on the property were not operating "wholly and exclusively" for charitable or educational purposes. The court decided the case based on a strict construction of the term "wholly and exclusively" and noted that commercial activities such as the operation of a gift shop and a restaurant and the presence of administrative offices were not appropriate for a nonprofit receiving property tax exemption. North Carolina nonprofits have expressed concerns that broad application of the court’s decision to all types of nonprofit property tax exemption could affect many organizations that engage in some commercial activities to offset mission-related operational costs. The North Carolina Center for Nonprofits is exploring whether nonprofits should challenge the court's decision.

Advocacy in Action 

Never Say Never

Supporters of the America Gives More Act can take inspiration from environmental and conservation groups in New Jersey which have proved the nonprofit advocacy adage: “never say never.” The groups are now promoting public support for a state constitutional amendment on the November ballot, a proposal that was declared by many to be dead when the General Assembly adjourned for the year in June.

The proposed constitutional amendment would create a permanent funding stream for preservation of open spaces, farmland, and historic structures by tapping at least $70 million in revenues generated by the state’s corporate business tax. The proposal was widely supported by state Senators, but some Assembly members had expressed concern over the cost of the measure and the need to get New Jersey’s fiscal house in order.

Although the constitutional amendment seemed dead in June, the coalition of environmental and conservation groups did not give up. They continued to promote the measure despite the apparent lack of an opportunity for the Legislature to place the proposal on the ballot. Yet, in a rare August session, and on the last possible day for a vote, the Assembly passed the amendment with enough votes to ensure that the question would be on the ballot this November.

Those expressing conventional wisdom talked about “next year.” Dedicated advocates continued to advocate for immediate action, however, and prevailed. 


 

Worth Reading

Push the Senate to Pass the America Gives More Act, Vikki Spruill, president & CEO, Council on Foundations, Chronicle of Philanthropy, August 29, 2014.

W.Va. needs U.S. Senate to act on charitable giving, Paul Daugherty, Philanthropy West Virginia, and Becky Ceperley, Greater Kanawha Valley Foundation, Charleston Gazette, August 24, 2014, expressing their view that, "West Virginia's itemized charitable giving has not returned to the pre-2008-09 Great Recession levels,” and that the “America Gives More Act makes it possible for more people to give for local needs.”

OMB, Nonprofits and Social Impact, Elaine Carpenter, ZeroDivide blog, August 22, 2014, explaining the impact of the requirement in the new OMB Uniform Guidance that governments pay nonprofits for their indirect costs, stating, “governments using federal funds will no longer be able to say ‘we don’t pay for administrative or overhead costs; your nonprofit will have to eat those costs or raise the money on your own.’ … No longer will nonprofits need to postpone investments they require to do their work, nor will they have to continue subsidizing their work with government agencies.”

Business as usual for business tax breaks?, Korey Clark, StateNet, September 8, 2014, analyzing developments in making businesses more accountable for the $80 billion in tax breaks that states and local governments grant annually.

Worth Quoting

"We also realize that if somebody's not there to speak out, that [legislators] take the silence as agreement and so we need to speak out as well as any others that might be impacted,”

- Eddy Aliff, executive director of the Virginia Assembly of Independent Baptists, in a WVIR-TV interview referring to the need to speak up for all nonprofits at a public hearing in Virginia on nonprofit tax exemptions.

“Members of Congress tend to act like harried undergraduates, leaving their hardest assignments till the end of the term and then finishing with a blizzard of activity.”

- Drew DeSilver, writing in Congress continues its streak of passing few significant laws, Pew Research Center, July 31, 2014, pointing out that among “the past seven Congresses, between 39% and 59% of all the substantive laws they passed came in the last five months of their respective two-year terms; the average was 49%.”

Worth Studying

The Distribution of Select Federal Tax Deductions and Credits Across the States, Pew Charitable Trusts, September 4, 2014, providing an interactive map and tables with state-specific data for 2012 on taxpayer deductions for charitable giving, state and local taxes, mortgage interest, and tax credits.

Nonprofit Advocacy Matters Special Edition | The Promise of Grantmaking Reforms Moves Closer to Reality

Posted: 
September 2, 2014

The Promise of Grantmaking Reforms Moves Closer to Reality

Nonprofit organizations that perform work on behalf of governments moved several steps closer to securing reimbursement for their true costs with the publication by the White House Office of Management and Budget (OMB) of its clearest statement yet of how governmental entities must comply with pro-nonprofit reforms published last December. Those reforms (discussed below) are incorporated in the OMB Uniform Guidance, which presents a comprehensive overhaul of the federal grantmaking process designed to ensure consistency across governments and the entities to which they provide resources. Styled as answers to Frequently Asked Questions (FAQs), OMB addressed multiple areas of confusion and inconsistency arising from the Uniform Guidance. The FAQs provide answers that are binding on federal agencies and pass-through entities – typically states and local governments receiving federal funding.

How governments interpret and implement the OMB Uniform Guidance (also called the SuperCircular or OmniCircular) is critical, particularly in dealing with the new rules related to payment to nonprofits of their indirect costs (sometimes called administrative or overhead costs). The OMB Uniform Guidance explicitly requires pass-through entities and all federal agencies to reimburse a nonprofit for its indirect costs by applying the nonprofit’s federally negotiated indirect cost rate, if one already exists. If a negotiated rate does not yet exist, then nonprofits are empowered to request negotiating a rate or elect the default rate of 10 percent of their modified total direct costs (MTDC). 

Key Clarifications

Based on past experiences with state and local governments, many nonprofits have expressed concern that governmental entities passing federal funds through to nonprofits will ignore, avoid, or implement new policies and practices that have the effect of denying nonprofit organizations the benefits of the reforms dealing with indirect and other costs promised in the Uniform Guidance. The National Council of Nonprofits and many other organizations posed questions to OMB seeking clarification on how governments can and, importantly, cannot interpret the Uniform Guidance. The answers by OMB should help nonprofits protect their rights under the Uniform Guidance.

Following the Money: The OMB Uniform Guidance applies the new rules to federal funding streams. Observers recognized that if a pass-through recipient could break the connection with federal funds or blur the lines, then the new mandates may not apply. The FAQs provide this clarity: (1) The new requirements follow the federal money through every layer of grantmaking, meaning that the protections for nonprofits stay in place even through several layers of subawards; (2) governments cannot erase the nonprofit protections by using non-federal funds to pay for a grant and later seek reimbursement from the federal government; and (3) pass-through entities cannot eliminate the nonprofit protections in the Uniform Guidance merely by blending several federal funding streams and following a common set of rules; the obligation to follow the specific rules for each funding stream remains intact unless all participating Federal awarding agencies agree to a common set of rules.

Indirect Cost Rates: The FAQs remove any gray area in the mandate that pass-through entities must pay federally negotiated rates for indirect cost. The FAQs provide direct instructions to state and local governments:

“If the subrecipient already has a negotiated F&A [facilities and administrative] rate with the Federal government, the negotiated rate must be used. It also is not permissible for pass-through entities to force or entice a proposed subrecipient without a negotiated rate to accept less than the de minimis rate. The cost principles are designed to provide that the Federal awards pay their fair share of the costs recognized under these principals. (See section 200.100(c).)…” (emphasis added)

Commentators had expressed concern that governments may demand that nonprofits waive their rights to a federally negotiated rate or take less than a ten-percent indirect cost rate. The OMB made clear that this will not be allowed.

However, the FAQs appear to undercut the significance of the mandate when a nonprofit seeks to reach agreement in setting an indirect cost rate with a state or local government. The document states, “Pass-through entities may, but are not required, to negotiate a rate with a proposed subrecipient who asks to do so.” This language appears to contradict the Uniform Guidance and may apply only at the initial grantmaking or contracting stage when the nonprofit may otherwise be entitled to the ten percent MTDC specified in the Uniform Guidance. More clarity from OMB is still needed here.

Enforcement: Federal grantmaking rules are typically enforced after performance under a grant is completed and after government inspectors and auditors issue reports. This approach, of course, provides little comfort to nonprofits that have been denied their rights from the outset of the grantmaking process. Acknowledging that current law is insufficient, the FAQs state that federal officials are “working with a Coalition of non-Federal entities to evaluate the effectiveness of implementation and the overall impact of the guidance.” Elsewhere in the FAQs, OMB states that it is working with this same group, in which the National Council of Nonprofits participates, to ensure that the Uniform Guidance will be consistently interpreted across all of the states. Combined, these answers demonstrate both a desire by OMB to promote full compliance by governments from the outset and the need for nonprofits to identify challenges and misinterpretations that need to be corrected.

Other Provisions: The Uniform Guidance merged eight existing Circulars into one set of rules designed to provide consistency and certainty. Yet confusion arose as new definitions were applied to existing practices and as rules from one Circular were applied to nonprofits and other organizations for the first time. The FAQs clarify that in most cases OMB did not intend for changes to alter the way in which pass-through entities structure agreements with nonprofit subrecipients. For instance the FAQ clarifies that the change in terms from “vendor” to “contractor” does not require government to stop contracting for services with nonprofits. The FAQs also provide a one-year grace period for nonprofits to implement new procurement requirements, which, among other things, will require nonprofits to prepare written procurement policies. OMB further clarified that procurement does not apply to purchases of items or services that are indirect costs and that during the transition period, nonprofits must document in writing whether their old or new policies apply to each purchase. Despite detailed language in the FAQs regarding fixed amount awards, grants that often apply to human service work, it remains unclear whether the current agreements used by pass-through entities and fixed amount awards are synonymous and requiring adjustments in the future. Further clarification is needed.

Effective Dates

Federal agencies must implement the new requirements on December 26, 2014 and apply the Uniform Guidance to new funding on or after that date. Incremental funding is not considered new unless modifications are made to the terms and conditions to the award as well. Nonprofits should follow the new requirements when submitting an application this year for funding expected to be approved after December 26, 2014. New audit requirements will apply to funding beginning with the nonprofit’s fiscal year that starts after December 26, 2014. 

Next Steps: What You Can Do Now

We encourage nonprofits to review the new FAQs in detail and adjust their practices accordingly. Here are three steps nonprofit leaders can take to help ensure that the Uniform Guidance benefit their organizations and all nonprofits:

  1. Take the Nonprofit Survey: You can help in the development of tools to turn the new reforms into reality for your organization and others by completing this short survey and by encouraging your colleagues at other nonprofits to fill it out as well.
  2. See Something, Say Something: These FAQs clarify some questions and take away some potential ways in which pass-through entities could deny nonprofits their rights to indirect and other cost reimbursements. But new techniques to avoid or evade the costs mandates could emerge in the coming months and years. Nonprofits working with governments under grants or contracts should be alert to potential challenges to their rights under federal policies. When you see something that doesn’t look appropriate, say something, whether to the government program officer, to the state or local government agency, to an official at the federal awarding agency, or to the network of the National Council of Nonprofits.
  3. Stay updated through your State Association: The law and practices in this area are changing rapidly and your state association of nonprofits is part of a national network that is actively engaged with federal, state, and local government partners in ensuring full and fair compliance, as well as successful implementation and utilization by nonprofits. Find your State Association and get active in these advocacy and capacity building efforts.

About the Government-Nonprofit Contracting Reform Project

The National Council of Nonprofits works through its network of state associations of nonprofits to proactively promote reforms to government contracting and grants such as these being implemented by the federal government. Readers are encouraged to contact their state association of nonprofits to learn more about efforts to streamline and improve contracting and grants in your state. Learn more about ongoing government-nonprofit contracting reform efforts across the country and find practical resources at www.govtcontracting.org


 

OMB Grants Guidance Resources

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Office of Management and Budget, December 26, 2013.

Frequently Asked Questions, Office of Management and Budget, August 29, 2014, providing answers to 78 frequently asked questions regarding the OMB Uniform Guidance and incorporating previously issued FAQs.

Worth Reading

National Council of Nonprofits Statement, December 19, 2013

New OMB Guidance on Indirect Costs: What It Does and Why It Matters, National Council of Nonprofits, updated May 20, 2014.

Investing for Impact: Indirect Costs Are Essential for Success, National Council of Nonprofits, September 30, 2013.

Changing the Conversation about Overhead, by Rick Cohen of the National Council of Nonprofits, in NTEN: Change, June 2014, making the case that old thinking about overhead or indirect costs is undermining the ability of nonprofits to be effective and demonstrating ways to communicate the connection between investments in technology and greater mission impact.

Nonprofit Finance Fund Social Currency Blog by Beth Bowsky, National Council of Nonprofits

Who Has the Time, and Other Questions on Nonprofit Advocacy, by David L. Thompson in the Summer 2014 edition of Nonprofit Advantage (pp 3-4), a publication of CT Nonprofits, making the case for everyday advocacy using government-nonprofit contracting data and the new OMB Uniform Guidance on mandatory reimbursement of nonprofits’ indirect costs.

Find your State Association 

While Nonprofit Advocacy Matters can be a source of information on policy issues affecting nonprofits in your state, don't miss out on the benefits of being connected locally with your state association of nonprofits. These groups, which serve as the backbone of our national-state-local network, connect your nonprofit with training and resources on everything from the basics of effective governance to the latest trends in fundraising, and they serve as your advocacy voice in the state capital. Find your State Association and join this powerful nationwide network of more than 25,000 community-based nonprofits.

Nonprofit Advocacy Matters | August 25, 2014

Posted: 
August 25, 2014

Federal Issues

The Push Is On to Pass the America Gives More Act in September

If the Senate votes to pass the America Gives More Act in September, it will be thanks to the voices of tens of thousands of nonprofit board members, employees, volunteers, clients, and donors who have joined in the nationwide call to action on this legislation to promote giving to the good works of charitable nonprofits. Conventional wisdom in Washington, DC, which is often proven wrong, holds that there isn’t time in September to take up the bill and that a possible post-election, lame-duck session will at best adopt another temporary extension of tax incentives. This approach, which some Senate staffers are repeating to many nonprofits demanding action, would deny communities the benefits of permanent extensions of the IRA rollover, enhanced deductions for donations of food inventories, and land conservation easements, as well as frustrate efforts to streamline the foundation excise tax and extend the deadline for making charitable donations up to April 15 each year.

In a concerted effort to overturn conventional wisdom and secure support for communities, nonprofit leaders are making extraordinary efforts. State associations of nonprofits are informing and mobilizing their members through action alerts, articles, and tweets. Trisha Lester of the N.C. Center for Nonprofits made the case clearly in a blog message to members: “Proving Conventional Wisdom Wrong (Again) on Charitable Giving Tax Incentives,” using success in recent legislative challenges in North Carolina as a guide.

Similarly, members of the Forum of Regional Associations of Grantmakers are speaking up through action alerts, blog posts, and news updates. This op-ed by leaders of Philanthropy West Virginia articulates the reason for action: "The substance of America Gives More Act is sound and undisputed. Nonprofits and philanthropy are telling Congress to set aside their partisan bickering, solve this problem Congress has created, and do something for their communities before leaving town in September to focus solely on the mid-term elections.” 

A broad spectrum of the nonprofit and grantmaking community is uniting to demand that the Senate vote on the America Gives More Act in September. For instance, the Land Trust Alliance is asking its members to take time in August to attend Senators’ town hall meetings, as well as to invite their Senators to visit preserved land sites. The organization has also provided tools for securing local publicity as well as guides to how to secure your Senator’s support for these tax incentives. Independent Sector has a take action page that provides numerous communications tools, and the Council on Foundations is offering an Activate in August toolkit designed to promote direct advocacy on the legislation. See more background information on the America Gives More Act and learn what nonprofit leaders, staff members, and volunteers can do to help.

Positive News on Charitable Tax Deduction Life Expectancy

The deduction for charitable contributions is “the one area where I believe we should not have a top cap,” Rep. Paul Ryan (R-WI) said on a television interview last week. He went on to say, “I think that is what feeds civil society, which is a very, very important part of American life and society.” The statement is noteworthy mainly because of who said it. Ryan is currently chair of the House Budget Committee. He appears to be the leading contender to become next chair or ranking member of the House Ways and Means Committee starting in 2015. That is the committee in the House that will do the heavy lifting in crafting a comprehensive federal tax reform package that may or may not alter the tax incentives for giving to the work of charitable nonprofits in communities.

Nonprofits Payroll Tax Debt Has Declined

Nationally, nonprofit employers owe $875 million in payroll tax debt, down from over $1 billion in 2007, according to a report from the Treasury Inspector General for Tax Administration (TIGTA). The report found that about 64,000 nonprofits, or 3.8% of tax-exempt organizations, failed to remit payroll taxes to the IRS as required by law. Most of those entities owed minor amounts but approximately 1,200 owed more than $100,000 each. The report is a useful reminder that while nonprofits generally are exempt from paying federal income tax, they still must pay payroll and other taxes. 

State and Local Issues

Nonprofit Sales Tax Exemption, Land Conservation Credits Under Review in Virginia

Virginia legislators are scheduled to review the nonprofit sales tax exemption and tax credits for land conservation this week as part of an ongoing re-evaluation of many tax credits, deductions, exemptions, and exclusions contained in the Virginia Code. Nonprofits from across the Commonwealth are either submitting comments in support of the exemption or planning to attend a public hearing on Tuesday, August 26. Some may be calling on the General Assembly to repeal a provision in current law that limits a nonprofit's administrative and fundraising expenses to no more than 40 percent of its annual gross revenue as a condition for receiving tax exemption. Multiple studies reveal that in nonprofit and for-profit organizations, the usual range of overhead rates is approximately 25 percent to 35 percent, meaning that arbitrary caps like the one in Virginia law have the effect of discouraging essential investments in education, infrastructure, and efficiencies that have been shown to improve performance. A separate hearing on the land conservation tax credit is scheduled for Friday, August 29. All interested nonprofits are encouraged to participate and express their views to the Joint Committee to Evaluate Tax Preferences.

Oregon Challenge to Property Tax Exemption

Cultural nonprofits may be denied exemption from property taxes in Oregon if a recent decision in the state’s Tax Court is upheld. The dispute involves the Salem-based nonprofit Newspace Center for Photography, which opens its gallery to the public and charges fees for classes and use of facilities. “Photography education and public awareness are culturally enriching, not necessarily charitable” as that term is defined in Oregon Law, according to a decision of the state Tax Court.

Health Insurance Coverage and Charity Care

The expansion of health insurance coverage as a result of the Affordable Care Act is causing hospitals to re-evaluate their policies on charity care and community benefit. Many health care systems reportedly are continuing to provide free or reduced cost care but are also requiring uninsured patients seeking medical treatment to apply for insurance coverage. At least one hospital in New Hampshire is taking a harder line, publicizing a policy that “applicants who refuse to purchase federally-mandated health insurance when they are eligible to do so will not be awarded charitable care.” In California, groups continue to push for legislation that would expand the definition of the care provided to satisfy “community benefit” standards and impose a mandate on how much community benefit care must be provided by nonprofit hospitals.

New York City Regulates Clothing Donation Bins

New York City’s City Council is considering a proposal to expedite the process for removing illegal clothing donation bins from city streets. The donation receptacles purport to support charities, but typically generate revenue for private companies that are not permitted to place bins on public property. Other cities have banned for-profit collection bins as well: in April, Ypsilanti, MI ordered the removal of all clothing bins from city streets, and earlier this month Evanston, IL began requiring permits

Advocacy in Action

Everyday Advocacy Starting on Day One

Stories in this segment of this newsletter frequently reinforce the message that advocacy, like the mission of a charitable nonprofit organization, deserves attention every day. Jeffery Duplessis of the Mississippi Center for Nonprofits applies this perspective not just every day, but from Day One.

A recent interview in the Mississippi Business Journal illustrated Duplessis’ philosophy, and passion, for nonprofits. “I can’t tell you how many people have called me over the years and said they need a job and want to start a nonprofit.” His advice: “That is not the right way to begin. You have to be passionate about your cause — to make a difference in your community.”

The point isn’t purely idealistic, Duplessis points out. “You are going to have challenges. If you are not committed, those challenges can become brick walls.” Therefore, people dedicating themselves to the public good must be doing it for reasons that will help them overcome adversities. “You have to be passionate, persistent, and patient,” the Mississippi Center’s Duplessis concludes.

Not surprisingly, passion, persistence, and patience are the key ingredients both for advancing nonprofit mission and for nonprofit advocacy. And they are needed from Day One and every day in the life of a nonprofit leader.

 


 

Worth Reading

Don’t let tax reform undermine charitable giving, byJeramy Lund and Fraser Nelson, Salt Lake Tribune, August 16, 2014, highlighting the philanthropic spirit in Utah and calling on Congress to pass the America Gives More Act.

First Social Impact Bond Fails to Meet Halfway Mark Performance Target, Rick Cohen, Nonprofit Quarterly, August 13, 2014, commenting on the failure of the world's first Social Impact Bond project in Great Britain to meet its early performance targets. 

Worth Quoting

“For public officials, the law of unintended consequences should need no introduction.”

- Joseph A. Curtatone and Mark Esposito, writing in “Systems Thinking: a Better Way to Make Public Policy,” Governing, August 18, 2014, explaining how applying the holistic way of thinking, known as “System Thinking,” is a practical way to develop solutions to real-world problems that anticipate potential consequences.

Worth Studying

Hunger in America 2014

This 2014 study reveals that each year the Feeding America network of food banks provides service to 46.5 million people in need across the United States, including 12 million children and 7 million seniors. The survey data find that each year 1 in 7 Americans use a food bank, including 5.4 million individuals in any given week. 

Numbers in the News

Spotlight: Arkansas

93,000

Arkansans employed by nonprofits in 2010

6.8

Percent of the Arkansas workforce employed by nonprofits

Source: Arkansas - Where Bold Nonprofits Work, Arkansas Economic Development Commission.

See economic impact reports from other states.

Nonprofit Advocacy Matters | July 28, 2014

Posted: 
July 28, 2014

Take the Survey, Share the Survey

In less than five months, new reforms governing payments to nonprofits for their indirect (overhead) and other costs will go into effect. Learn what the reforms do and why they matter to nonprofits.

You can help in the development of tools to turn the promise of the new reforms into reality for your organization and others by completing this short survey and by encouraging your colleagues at other nonprofits to fill it out as well. 

Federal Issues

House Passes Charitable Giving Tax Provisions

The House of Representatives approved a package of charitable tax provisions on July 17 by a vote of 277 to 130. The bill (American Gives More Act of 2014) would permanently extend three expired charitable giving incentives – food inventories, conservation easements, and the IRA rollover – as well as permit taxpayers to claim charitable deductions from the previous year up through April 15. The bill also would simplify the current two-tiered excise tax to a flat rate of one percent. The underlying substance of the package appears to have strong bi-partisan support, although a majority of Democrats voted against it because the bill did not include provisions to offset the $16 billion cost. The Senate, due to a separate partisan dispute, has not been able to advance legislation to renew for two years several expired tax provisions, including the charitable giving incentives. Without significant advocacy efforts by the nonprofit community, the Senate is unlikely to take up the House-passed bill before adjourning for the mid-term elections.

Winter Optimism Turns to Summer Doldrums on Federal Budget

Seven months after an historic deal on the federal budget, Congress has failed to enact any of the dozen spending bills that fund the federal government and a stopgap funding measure, known as a Continuing Resolution or “CR,” is already being discussed as a likely solution to continuing partisan gridlock. At the end of 2013, Congress reached agreement on a budget that set spending levels and was supposed to allow the appropriations committees to approve annual spending legislation prior to the start of the next fiscal year on October 1. However, both the House and Senate are scheduled to start a five-week recess on Friday without addressing n umerous policy and political disagreements. For example, the bill to fund the Treasury Department next year has drawn strong opposition from the White House partly because the House-passed version cuts the budget of the Internal Revenue Service by more than $550 million. The cuts reportedly are intended as punishment for perceived obstruction of congressional investigations into the IRS’s allegedly partisan handling of applications for tax-exempt status. Many in the nonprofit community are concerned that the reduced funding will divert the IRS diverted from its assigned duties of enforcing against fraud, lawfully screening applications for tax-exempt status, and providing help to the public and charities about appropriate stewardship of donor resources.

State and Local Issues

National Voter Registration Day Proclaimed

The fourth Tuesday of September is officially designated National Voter Registration Day for the next five years, according to a resolution adopted this month by the National Association of Secretaries of State. The bipartisan endorsement from top state election officers puts this celebration of voting and democracy firmly on the election calendar through the rest of the decade and reinforces the commitment to expand the electorate and engage thousands of new voters in the democratic process as the deadlines to register and vote approach. The third annual National Voter Registration Day takes place this year on September 23, 2014. In its first two years, over 1,000 organizations and 10,000 volunteers registered more than 300,000 people to vote. Readers are encouraged to check out Nonprofit VOTE's 501(c)(3) Permissible Activities Checklist, visit its webpage on Staying Nonpartisan, and register for a national webinar on National Voter Registration Day on Thursday August 7th at 2pm Eastern. 

Human Service Providers Assess Progress on Government Contracts and Grants

Nonprofit human services providers continue to struggle with challenges presented by government contracting and grantmaking policies and procedures, according to a new report from the Urban Institute which compares the experiences reported in its surveys conducted in 2010 and 2013. The analysis found that significantly more nonprofits reported decreases in the percentage of government contract and grant dollars that could be used for organizational overhead costs. Fifty percent of nonprofits reported limits on how the amount of funds that could be used for organizational overhead, and of those, three-quarters said the amount was limited to 10 percent or less. This important finding reinforces the need to protect the new federal requirement that state and local governments pay nonprofits their legitimate indirect costs.

The new Urban Institute report also found that nationwide late payments showed a slight improvement from 2009 to 2012 in terms of the length of time payments are delayed, with fewer being reported more than 90 days late. Yet 42 percent of nonprofits surveyed still reported problems in their states with late payments. Complex and time consuming application and reporting requirements continue to be reported as the biggest problem by nearly three-quarters of survey takers. Go to the National Council of Nonprofits' website dedicated to contracting/grantmaking reforms for more information.

Additional Government-Nonprofit Contracting Reform News

Taxes, Fees, PILOTs

  • Taxes: The New Orleans City Council President has blamed nonprofits for crumbling public roads. She contends the city is “missing out on” tax dollars that she believes the 15,000 nonprofit property owners in the city should have to pay. The idea of imposing a property tax onto nonprofit property owners has been brought up before by the Council President, but may gain more traction now that she has suggested that the extra revenue could be put toward the politically popular use of repairing city roads.
  • Fees: The City Commission in Helena, Montana is considering whether to levy a fee on nonprofit property owners to help fund the city fire department, which is currently funded by property tax revenues. The plan being considered by the Commission would allow the city to create a methodology to levy a fire protection fee on tax-exempt properties, mainly government entities such as the VA hospital, and local nonprofits including churches and schools.

Maine to Allow Volunteerism as One Requirement for Food Benefits

Maine will, once again, start requiring recipients of the supplemental nutritional assistance program (SNAP, or food stamps) to work a certain number or hours or volunteer with nonprofits to be eligible for the benefits. This requirement is federally mandated, but the state had received a waiver due to high unemployment. In response to protests that the jobless rate still remains too high in the state to assume that recipients could easily find work, the Department of Health and Human Services Commissioner claimed that volunteer work was an easily accessible alternative to receive the benefits. 

Privately Funded Detroit

Detroit is turning to private funding sources to support the arts as well as political priorities. The Detroit Institute of Arts has secured an additional $26.8M in corporate donations towards its total $100 million pledge to the “Grand Bargain.” The museum has now raised over $80M towards paying down Detroit’s pension liability and transferring ownership of the museum from the city to a nonprofit. Separately, Detroit Mayor Mike Duggan is raising private funds for his new 501(c)(4) organization, the Detroit Progress Fund. The new nonprofit, which is tax-exempt under the “civic league, social welfare organization” portion of the federal tax code, was formed in February to support the “Mayor of Detroit’s agenda.” The Mayor’s spokesperson has said the fund can also be used to “pay for some city-related needs that we don’t currently have the budget for.” It is unclear what those needs are, but some suggest it may be to provide travel budgets for out-of-state job candidates, and not to supplement funding for services provided by nonprofits on behalf of the government. Mayor Duggan says he will disclose funders and spending of the Detroit Progress Fund.

Milwaukee Nonprofit Sector has Grown and Will Continue to Do So

Milwaukee has a “growing, robust nonprofit sector supported by a donor base willing to fund its endeavors,” according to a report from the Public Policy Forum. The report, titled “Give and You Will Receive,” also finds that the growth of the nonprofit sector in the city outpaced that of the city’s GDP, but observes that the increase in the number of nonprofits may have also led to a decrease in overall revenue in all nonprofits. The study suggests that the nonprofit sector in Milwaukee is healthy and will continue to be so, yet individual nonprofits may want to consider more collaboration to maintain or increase capacity.

Advocacy in Action

And the Beat Goes On

Nonprofit advocacy is about advancing nonprofit missions, every day. You win one day, you lose another, and you show up the next day and keep trying. And that’s a good thing because nonprofit missions need and deserve the effort.

Over the years, the Center for Non-Profits in New Jersey has identified complex contract and grant applications processes with the state as barriers to nonprofit efficiency and effectiveness. The state association of nonprofits in the Garden State has successfully advocated with others for numerous reforms, such as increased acceptance of electronic submissions and ensuring that the new e-procurement portal, www.NJSTART.gov, is “nonprofit-friendly.” Recognizing that advocacy works on a continuum, the Center’s advocacy efforts aren’t limited to just legislative lobbying and they don’t stop with the administrative “win” of new regulations written into law or e-systems gone live; the Center regularly surveys its members to ask what has gotten better and what has gotten worse with contracting/grantmaking with the state of New Jersey. 

The latest survey results showed positive and negative attitudes about various changes and provided valuable insights that can be shared with government officials to help streamline processes even farther. Seeing the results of past efforts, nonprofits know that their survey response can make a difference. So it is not surprising that one nonprofit official took the opportunity to raise a “very important point” even though it “doesn’t fit any of your questions” on the survey. The person wanted to challenge the state’s “use it or lose it” policy through which unspent funds from government contracts or grants must be returned to the state rather than applied to the next year’s contract or grant. The comment was imminently reasonable from a nonprofit’s perspective: “I would like to be able to move money forward for the next year since I know that rent, insurance, health, etc. will continue to rise and I can’t count on additional funding from the government contract.”

Because the nonprofit official used his or her voice to broach the issue, the Center received a crucial reminder of its continued significance to organizations. Making the point that every communication provides the opportunity to advance a nonprofit mission, every day.

 


 

 

Worth Reading

Social Impact Bonds: Phantom of the Nonprofit Sector, Rick Cohen, Nonprofit Quarterly, July 25, 2014, providing an extensive analysis and critical review of social impact bonds and pay-for-success initiatives at the federal level.

Worth Quoting

“We depend on these nonprofit organizations, which in many cases operate on tight budgets in their mission to help needy and vulnerable people. A government that expects the rest of us to pay our taxes on time needs to also pay what’s due, when it’s due.”

- “State Should Pay Up Now,” editorial in the Albany (NY) Times-Union, July 14, 2014 urging state officials to start complying with prompt payment and prompt contracting laws designed to protect nonprofits.

“There is no virtue in self-imposed austerity that leads to mediocrity in our programs, and constant turmoil in our finances.”

- Kurt Clotz, “Value, cost, and price: a nonprofit dilemma,” blog posting for Nonprofits Assistance Fund, July 17, 2014 addressing the challenge that merely covering costs is a meager measure of success.” 

Worth Studying

States Recording the Largest Job Gains, Losses in June, Governing, July 18, 2014, providing an analysis of state-specific employment data, showing that 33 states added jobs last month, while 17 lost them.

Nonprofit Advocacy Matters | July 14, 2014

Posted: 
July 14, 2014

The Promise of Government-Nonprofit Contracting Reforms

In less than six months, new reforms governing payments to nonprofits for their indirect (overhead) and other costs will go into effect. To prepare, and to benefit all nonprofits (not just those with government contracts and grants) and grantmakers (that historically often have been forced to subsidize government shortfalls), we're dedicating space in Nonprofit Advocacy Matters and on Twitter at hashtag #NPFullCosts to talk about recovery of full costs and how nonprofits and governments can work together toward more effective service delivery. Learn what the reforms do and why they matter to nonprofits.

You can help in the development of tools to turn the promise of the new reforms into reality for your organization and others by completing this short survey and by encouraging your colleagues at other nonprofits to fill it out as well. Thank you.

Federal Issues 

House to Consider Charitable Giving Incentives

The House is expected this week to consider a package of nonprofit-related tax provisions that would permanently extend three expired charitable giving incentives – the IRA charitable rollover, food inventories, and conservation easements – as well as permit charitable deductions for the previous year up to April 15 and streamline the excise tax for foundation investment income. Five separate bills will likely be combined into one piece of legislation, the Fighting Hunger Incentive Act of 2014 (H.R. 4719). As when the measures came before the House Ways and Means Committee in May, votes are expected to be cast along partisan lines, but for reasons other than the substance of the underlying provisions, which remain popular. Specifically, Democrats continue to object that the proposed permanent renewal of the expired provisions are not being paid for with offsetting revenue increases elsewhere in the tax code. 

Tax Reform Draft Proposal Reduces Tax Incentive for Charitable Giving

A much-discussed comprehensive tax reform plan contains a combination of provisions that would reduce the tax incentive to make charitable contributions, according to extensive analysis by the Tax Policy Center. In February, House Ways and Means Committee Chairman Dave Camp (R-MI) issued a “discussion draft” tax reform plan that, among other things, called for imposing a floor on how much a taxpayer must give before taking an itemized deduction, raising the standard deduction, and restricting how much individuals may deduct each year. Several of these factors and lower tax rates proposed in the draft “would reduce the tax incentive to make charitable contributions,” the Tax Policy Center concluded. The report specifically found that the after-tax cost of making charitable deductions is increased, and thus the incentives are reduced, in every tax bracket and earnings quintile. Overall, the effective cost of giving a dollar would rise under the Camp plan from 77¢ to 88¢.

State and Local Issues 

Nonprofits Facing New Regulatory, Other Changes in New (Fiscal) Year

July 1 marked the beginning of the new fiscal year for most state governments and ushered in several new laws dealing with nonprofit operations, regulations, and fundraising. Many provisions of New York’s Nonprofit Revitalization Act went into effect July 1, raising audit thresholds and simplifying the procedures for forming, dissolving, and merging nonprofits in the state. The law requires nonprofits to alter many of their governance documents; as a result, the Governor’s office has suspended for 90 days the enforcement of prequalification requirements in the New York Grants Gateway, the State’s online contracting website, to provide nonprofits more time to update their internal documents without being penalized.

Significant changes to charity registration and disclosure requirements are taking place in Florida and soon in Maine. The new law in Florida, reportedly drafted in response to the Tampa Bay Times series on “America’s worst charities,” requires all nonprofits, including those based outside of Florida and those reporting less than $25,000 in donations, to register with the state to solicit funds. Significantly, the law empowers charity regulators to revoke the sales tax exemptions of nonprofits that spend less than 25 percent on program costs for three consecutive years and creates new audit requirements for nonprofits receiving higher amounts of donations. Nonprofit regulations in Maine will change on August 1, based on revisions to the laws governing charitable solicitations. The law will eliminate registration and disclosure requirements for professional fundraising counsel and charitable organizations that solicit below stated thresholds. It also removes the requirement of IRS determination letter for licensure as well as the exemption for professional third-party solicitors soliciting on behalf of faith-based nonprofits.

Also effective July 1 is a new Maryland income tax credit that applies for donations made to a qualified permanent endowment fund at an eligible community foundation. The value of the credit that can be applied to tax year 2015 and beyond, will be equal to the lesser of 25% of the eligible donation or $50,000. The Department of Housing and Community Development may award a maximum of $250,000 in credits in each tax year. 

Taxes, Fees, PILOTs
Idaho Nonprofit Overcomes For-Profit Tax Challenge

The Boise, Idaho YMCA made its case of community impact and support before the Ada County Commissioner’s Board of Equalization, which reversed its previous decision by voting unanimously in support for the full tax-exempt status of the 122-year-old nonprofit. In May, the Commissioners decided to lower the Y’s property tax exemption rate from 100 percent to 19 percent, following a challenge brought by two for-profit fitness clubs in the area. At a July 3 hearing, the first opportunity for the Y to plead its case, more than 200 supporters from the community showed up to hear Executive Director Jim Everett explain that the vast majority of activities of the facility enhance public access to fitness and other services, especially among children, disabled individuals, homeless people, and other at-risk populations. See television news report.

Government-Nonprofit Contracting News
Detroit Nonprofits Targeted for Contract Cancelation in Bankruptcy

Questions abound in Detroit after the City filed a list of hundreds of contracts, including many with nonprofits, it does not intend to honor as a result of its bankruptcy. It is unclear how many of these contracts are still active or whether the publication of the list will simply allow the City to clean up its books. The posting of the list raises concerns among the many charitable nonprofits that are providing services on behalf of the local government that their work could be affected as the bankruptcy proceedings advance. The City’s finances remain precarious, and with the election of a new administration, nonprofits are anticipating that some longstanding contracts may not be renewed.

Virginia Facilitates Nonprofit Property Purchases

A new law in Virginia empowers nonprofits to purchase properties worth up to $100,000 from Richmond and five other cities for less-than-market rates when the nonprofits use them to create low-income housing. The previous rules allowed anyone to purchase at auction properties valued at less than $50,000, but renovations and use were not required, and rarely occurred. The reform raises expectations in the six Virginia cities that nonprofits will step in and help transform communities. “It provides homeownership opportunities to families in the areas they want to live,” said Jack Thompson with Habitat for Humanity. “We can acquire more properties and serve more families.”

Advocacy in Action 

The Many Dimensions of Nonprofit Advocacy

During the recent legislative session in Illinois, the people at Donors Forum, Illinois’ State Association of nonprofits, demonstrated that nonprofit advocacy has many dimensions and can produce multiple payoffs for the people and communities served by nonprofits. The Donors Forum approach combines an organizational culture in support of advocacy with data, new tools, and relationships.

Among other things, leaders at Donors Forum demanded greater attention for issues affecting the work of charitable nonprofits by leveraging Illinois’ poor showing in the Urban Institute survey of nonprofit contracts and grants with nonprofits. Through blogs, radio appearances, newspaper articles, and an effective data sheet, Doug Schenkelburg, Donors Forum’s Vice President of Public Policy, urged “state lawmakers to create a budget that is adequate, responsive, fair, and meets the needs of the people of Illinois.”

Donors Forum also advanced its work in improving government-nonprofit contracting through the creation of a new website: Building a Better Illinois: The Public Nonprofit Partnership Initiative. The findings on the website provide a unique, in-depth look at the size and impact of charitable nonprofits in every legislative district and census tract in the state, as well as 77 community areas around Chicago. The project highlights the relationship between nonprofits and state government and it helps to ensure that policymakers truly understand the value of the sector and the challenges it faces.

Donors Forum’s comprehensive efforts to influence and build relationships with public officials are paying off: Illinois leads the nation in adapting some of the new federal reforms on grantmaking to state policies. With the anticipated signature on legislation by the Governor this week, the new Illinois Grant Accountability and Transparency Office and the Single Audit Commission will be working with nonprofits and government officials to streamline processes, reduce administrative burdens, and update regulations. Not all advocacy efforts show such an immediate or well-defined return on the investment of time and resources. But the Donors Forum approach is showing that when you focus on the ultimate goals, many tools help clear the path.


 

Worth Reading

Who Has the Time, and Other Questions on Nonprofit Advocacy, by David L. Thompson in the Summer 2014 edition of Nonprofit Advantage (pp 3-4), a publication of CT Nonprofits, making the case for everyday advocacy using government-nonprofit contracting data and the new OMB Uniform Guidance on mandatory reimbursement of nonprofits’ indirect costs.

Changing the Conversation about Overhead, by Rick Cohen of the National Council of Nonprofits, in NTEN: Change, June 2014, making the case that old thinking about overhead or indirect costs is undermining the ability of nonprofits to be effective and demonstrating ways to communicate the connection between investments in technology and greater mission impact.

Social Impact Investing - Fad or the Future?, by Brenda Peluso, Maine Association of Nonprofits Blog, July 1, 2014, providing a compilation of articles on new investing mechanisms and posing four key questions on the minds of many nonprofits.

Costs Campaign Resource

Federal Grant & Contract News For Nonprofits – June 2014, by Venable law firm, offering interpretations of key definitions in the OMB Uniform Guidance (sometimes called the “Super Circular”) and making recommendations for actions nonprofits can take to clarify areas of ambiguity caused by the new rules. 

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