Council of Nonprofits in the News

IRS makes it easier to get tax-deductible donations. Maybe too EZ.

July 2, 2014

"It's almost like you are filling out a library card" application, said Tim Delaney, president and chief executive of the National Council of Nonprofits.

The council has been urging the IRS to review and streamline the long form. But the short form goes "too far too fast, representing radical departures from proven protocols," it said in a letter to the Office of Management and Budget.

Nonprofits Watch Nervously as Watchdog Groups Multiply and Demand More

June 16, 2014

As the number of ratings groups grows, some in the nonprofit world worry that the sheer volume makes it hard to keep up.

Jennifer Chandler, vice president of the National Council of Nonprofits, says that while her members welcome the push for more transparency, they are concerned about the amount of time it will take to ensure that their information is current and accurate on multiple transparency-group websites.

"There are so many websites now for reviewing or evaluating public charities, one has to question whether one should spend your time reviewing these sites or accomplishing your mission," Ms. Chandler says. "But you have to think, ‘if I ignore even one of them, what’s the downside’?"

Live From AICPA: IRS Readying Shorter Application Form

June 13, 2014

A shorter version of Form 1023, the application for tax-exemption, was released earlier this year, with a public comment period during the spring.

In comments submitted to the Office of Management and Budget (OMB), the National Council of Nonprofits raised concerns about the new Form 1023-EZ and the streamlined approval process of tax-exemption. Specifically, the organization believes the proposal would “decrease rather than improve the quality of information the IRS needs to make informed decisions, reduce public trust and inappropriately shift the IRS’ obligations onto others – foisting burdens on the public, existing charitable nonprofits, the funding community, and state charity regulators.”

You can see the full comments here.

How Philanthropy Is Changing the Culture on Full Cost Funding

June 13, 2014

Breaking the nonprofit starvation cycle is not easy, but exciting progress keeps happening. To keep that momentum going, a great deal of culture change is needed. It is an entrenched mindset that has existed for a long time, one that asks nonprofit organizations to eke by with little to no administrative expenses; in response, nonprofit organizations are accustomed to scaling back, making do with as little as possible, while their capacity and potential for innovation dies on the vine.

Donors ForumBut change is happening. Donors Forum convened more than 30 foundation CEOs in May to talk about some significant changes:

In the public sector, after significant advocacy from national groups like the National Council of Nonprofits, the federal Office of Management and Budget has issued guidance stating that at least ten percent of federal dollars awarded to nonprofit grantees should pay for their indirect costs. This gives government funders a chance to pay the real costs needed to generate outstanding, sustainable outcomes. Additionally, leading websites such as Charity Navigator and GuideStar are moving away from using overhead costs as a measure of organizational efficiency. Instead, they are developing ways to measure the outcomes organizations produce.

Is the 1023-EZ a Step Backward for Regulators and Nonprofits?

June 4, 2014

Tim Delaney, President and CEO of the National Council of Nonprofits, objects to the Form 1023-EZ in its present form. There are concerns that the streamlined form omits most of the exhibits that the IRS uses to perform its due diligence to confirm that an applicant organization truly qualifies for tax exemption. Some see this abbreviated form as an invitation to abuse of charitable status, with the IRS lacking the documentation to evaluate the facts. Delaney also notes concern from states: “The National Association of State Charity Officials [NASCO] has sternly warned the IRS that ‘the Form 1023-EZ will increase opportunity for fraud and heighten the burden on state regulators.’”

Government Doesn’t Pay

May 30, 2014

“Government-nonprofit contracting problems first documented in the Urban Institute’s 2010 landmark study were not an anomaly of the Great Recession,” according to the National Council of Nonprofits, which recently released its own data proposing solutions to address contracting problems. The 56-page report, Toward Common Sense Contracting: What Taxpayers Deserve, was a companion of sorts to The Urban Institute’s release of state profiles of its Nonprofit-Government Contracts and Grants: Findings from the 2013 National Survey.

The National Council suggested more than a dozen “common sense solutions,” including prompt payment and contracting laws; reducing redundancy in the application process through an electronic repository or “document vault;” standardized monitoring and reporting and language, and government-nonprofit task forces.

Nonprofits concerned, confused over Anne Arundel grant rule

May 26, 2014

David L. Thompson, vice president of public policy at the National Council of Nonprofits, called the three-year stipulation unusual, particularly if the group provides services the government does not.

Forcing nonprofits to find funding outside of government grants is a common theme across the country as state and federal governments have cut back in an economy still dealing with the after effects of the 2008 recession. But he said time-limits don’t make sense for nonprofits trying to build “continuity.”

“The national trend is the opposite,” Thompson said. “It makes terrible sense (as an) across the board policy.”

Reboot: IRS Revising Political Activity Rules

May 23, 2014

The IRS typically holds a regulatory public hearing before revising regulations, according to David Thompson, vice president of public policy for the National Council of Nonprofits. That public hearing was expected sometime this summer but given the huge response during the public comment period in this case, he said it made little sense to have a public hearing on regulations that will be changed anyway.

“It doesn’t make sense to keep fanning the flames of flawed regulations when you know you will revise them,” said Thompson. “It makes sense for them to downplay it too. They’re doing something that just makes sense,” he said. “It presumes there will be a major rewrite but they can’t say that.”

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