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Statement from the National Council of Nonprofits on IRS Scandal | Don’t Let the IRS Scandal Hurt the Work of Charities

Posted: 
May 14, 2013

Tim Delaney, President and CEO of the National Council of Nonprofits, releases the following statement:

Charitable nonprofits are justifiably outraged by reports that the Internal Revenue Service targeted applicants for tax-exempt status based on their apparent political beliefs. As more facts emerge on the developing story, the National Council of Nonprofits calls on policymakers and the news media to strengthen public respect for, and not exacerbate ignorance of, the laws governing and distinguishing the nonpartisan work of charitable nonprofits in communities across the country. We are concerned that the IRS scandal is causing collateral damage to the work of innocent charitable nonprofits in at least two ways:

First, media reports and statements from politicians are lumping all “nonprofits” together, thus misleading the public by failing to recognize the important distinctions between different types of tax-exempt organizations. Federal law is crystal clear that ”charitable nonprofits,” which are tax exempt under section 501(c)(3) of the Tax Code, may not lawfully engage in partisan political electioneering activities. The types of organizations at the center of the IRS scandal, however, are “social welfare” nonprofits, which are exempt from taxation under section 501(c)(4) of the Tax Code and may engage in some political activities. The current admissions by and allegations against the IRS relate largely if not exclusively to IRS treatment of applicants for 501(c)(4) status; yet when headlines across America link “nonprofits” and politics they give the false impression that all nonprofits, including charitable nonprofits, are engaged in partisan political activities, when they are not. The public is justifiably confused about which groups do and do not engage in politicking. As a result, some people may be walking away rather than supporting or engaging with their community-based charitable (and nonpartisan) nonprofits, thus lessening the impact in communities.

Second, the American people and charitable nonprofits alike depend on the Internal Revenue Service to be the cop on the beat enforcing the tax laws that govern all nonprofits. Therefore, we encourage policymakers to conduct their investigations swiftly and thoroughly, and then take quick corrective action. The fact that the IRS must respond to these investigations of serious allegations means that it is being 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.

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New Report Identifies Solutions Coming From Government-Nonprofit Contracting Task Forces

Posted: 
April 4, 2013

Washington, DC – A new report released today by the National Council of Nonprofits (Council of Nonprofits) demonstrates the proven benefits to the public of establishing joint government-nonprofit contracting task forces.

The report, Partnering for Impact: Government-Nonprofit Contracting Reform Task Forces Produce Results for Taxpayers, focuses on recent efforts in nine states (Connecticut, Hawai'i, Illinois, Maine, Maryland, New Jersey, New York, North Carolina, and Texas) where joint task forces developed recommendations to streamline government-nonprofit contracting processes. These task forces are making progress in fixing inefficient systems in their states and saving taxpayers money by eliminating redundant processes, promoting online document repositories, and initiating other solutions.

“As state and local budgets are stretched increasingly thin, fixing broken contracting systems is one proven way for governments to save taxpayers money while maintaining or even improving services,” said Tim Delaney, President and CEO of the National Council of Nonprofits. “We applaud the efforts already underway in several states and hope their actions inspire officials in more states to establish these joint task forces in the near future.”

“In order to protect and enhance our communities, the real conversation must be about how we can work together to overcome the challenges facing our State. We appreciate working with our partners in the nonprofit community to improve contracting systems so we can ensure time and resources are dedicated to delivering services, rather than on inefficient processes,” said Robert Dakers, Executive Finance Officer of the Connecticut Office of Policy and Management.

“Government-nonprofit task forces, like the ones we have here in Texas, have changed attitudes and exponentially improved communications among government and charitable nonprofits,” said Barry Silverberg, President and CEO of the Texas Association of Nonprofit Organizations (TANO). “New relationships have been fostered and a stronger common agenda between the state and nonprofits has evolved so we can truly work together to serve our communities.”

Partnering for Impact is the third report in a series offering state and local governments solutions to improve nonprofit contracting processes. More information on government-nonprofit contracting issues, and these earlier resources, can be found at www.govtcontracting.org.

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New Tool Launched to Document the Human Effects of Sequestration Cuts

Posted: 
March 6, 2013

Washington D.C. – The National Council of Nonprofits (Council of Nonprofits) announced the launch today of www.GiveVoice.org as a storytelling and data collection hub for people and nonprofits affected by sequestration. This new tool will enable charitable nonprofits to report the negative effects of the sequester on real people in local communities across America. It also shows how sequestration will increase community demands and decrease needed resources, saddling nonprofit staff and board members with unsustainable burdens. 

Charitable nonprofits are on the front lines in communities across the country addressing individual needs and solving local problems. Nonprofits often see the impact of policy changes first, and feel the effects in multiple ways. The GiveVoice.org site explains how sequestration hurts the work of virtually all nonprofits, not just those with government contracts, and how it harms their ability to serve the needs of residents in their communities. Nonprofit staff members, board members, volunteers, and those served by nonprofits are encouraged to share their stories at www.GiveVoice.org about how sequestration is affecting their communities. 

“As the reality of sequestration cuts play out, the work of nonprofits is going to become even more difficult from multiple compounding factors as many are hit by direct funding cuts to programs, hit again as state and local governments cut their funding further to make up for their own budgets being cut, and hit a third time as people who are furloughed or laid off as part of sequestration turn to nonprofits for help in unprecedented numbers,” Tim Delaney, President and CEO of the National Council of Nonprofits said in a statement issued as President Obama signed the cuts into effect. “Charitable nonprofits are already severely depleted from doing so much more, for so many more, for so much longer, with so much less; they can no longer underwrite government’s failures. Nonprofit employees and board members can no longer pick up the slack as elected officials refuse to do their jobs. 

The GiveVoice.org website will be updated as stories come in from people across the country and the effects of sequestration continue to make themselves known. Over time, a clearer picture of the painful truths of this arbitrary and short-sighted policy will come into focus. 

Delaney added, “The 13 million individuals employed by nonprofits, the 63 million who volunteer for nonprofits, and the millions more who are served daily by nonprofits all need to tell policymakers how the cuts will impact their lives. And they need to tell Congress and the President to get back to work, fix the sequester, return to regular order for the federal budget, and stop hurting the American people.” 

Additional Resources

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The National Council of Nonprofits is a trusted resource and advocate for America’s charitable nonprofits. Through our powerful network of State Associations and 25,000-plus members – the nation’s largest network of nonprofits – we serve as a central coordinator and mobilizer to help nonprofits achieve greater collective impact in local communities across the country. We identify emerging trends, share proven practices, and promote solutions that benefit charitable nonprofits and the communities they serve. Learn more atwww.CouncilofNonprofits.org.

Statement from National Council of Nonprofits President and CEO Tim Delaney on Sequestration Cuts and the Damage to Nonprofits Serving Local Communities

Posted: 
March 1, 2013

Washington, DC - National Council of Nonprofits (Council of Nonprofits) President and CEO Tim Delaney released the following statement: “While Washington lawmakers play the blame game over who is responsible for letting sequestration’s automatic spending cuts go into effect, America’s nonprofits, and the people they serve, have been the first to suffer the consequences. 

Nonprofits have been in limbo for months already due to sequestration’s uncertainty, with contract renewals held up as states and localities wait to see how they are affected by the cuts. While for-profit road-builders cease laying asphalt until payments are guaranteed, nonprofits continue providing needed services in their local communities. Nonprofits with government contracts and grants haven’t kicked at-risk children out of group homes, cut back on care for mentally ill individuals, or stopped serving meals to seniors. Instead, nonprofits have continued operations as best they could, effectively subsidizing governments. 

“As the reality of sequestration cuts play out, the work of nonprofits is going to become even more difficult from multiple compounding factors as many are hit by direct funding cuts to programs, hit again as state and local governments cut their funding further to make up for their own budgets being cut, and hit a third time as people who are furloughed or laid off as part of sequestration turn to nonprofits for help in unprecedented numbers. Charitable nonprofits are already severely depleted from doing so much more, for so many more, for so much longer, with so much less; they can no longer underwrite government’s failures. Nonprofit employees and board members can no longer pick up the slack as elected officials refuse to do their jobs. 

“The time for playing politics is over. Real people in every community from coast-to-coast and border-to-border are being hurt

“It is time to speak up for our communities. The 13 million individuals employed by nonprofits, the 63 million who volunteer for nonprofits, and the millions more who are served daily by nonprofits all need to tell policymakers how the cuts will impact their lives. And they need to tell Congress and the President to get back to work, fix the sequester, return to regular order for the federal budget, and stop hurting the American people.”

National Council of Nonprofits’ CEO Brings Voices of America’s Local Charitable Nonprofits to Congress

Posted: 
February 14, 2013

Washington, DC – In testimony today before the House Ways and Means Committee, National Council of Nonprofits (Council of Nonprofits) President and CEO Tim Delaney shared the concerns of more than 100 specific, community-based nonprofits from across the country expressing how changes to the charitable giving incentive would harm their ability to serve the public.

“Unprecedented stresses from the Great Recession have left charitable nonprofits severely depleted from serving so many more, for so much longer, with so much less; legislation that affects nonprofits must take this into account,” said Delaney. “Any consideration of changes to charitable giving incentives should focus not on the donor, and not even on nonprofits, but on the people being served by nonprofits in every community across this country.” He continued, “Charitable nonprofits are concerned about reports that Congress and the White House are looking at reducing the charitable giving incentive, which would effectively take away incentives for donations to the work of churches and synagogues, domestic violence shelters, early childhood programs, education, food banks, youth and senior groups, and all other charitable nonprofits at a time when the deep need for public support for charities to serve the public is at an all-time high.”

While demand for services has skyrocketed in the past several years, resources have not kept pace, leaving America’s social safety net in danger of unraveling. Delaney testified that “Congress should take action to encourage charitable giving rather than discourage individuals from giving to organizations that are making a real difference in our communities.”

Real-World Context of Challenges Charities Are Facing

In his testimony, Delaney also identified five ways in which governments at the local, state, and federal levels have been compounding stresses on charitable nonprofits by shifting heavier burdens onto nonprofits and, as a result, endangering the work that nonprofits do in communities:

  1. Abusing nonprofits in the contracting context, hurting program recipients and taxpayers in the process;
  2. Directly taking money away from nonprofit missions through the imposition of new taxes and fees, and demands for payments in lieu of taxes;
  3. Indirectly taking nonprofit resources by improperly invading boardrooms of private nonprofits, which under controlling Supreme Court precedence are independent entities;
  4. Abandoning commitments to the public as they eliminate programs and slash funds, expecting charitable nonprofits and foundations to fill the voids governments create; and
  5. Draining the philanthropic pool of dollars.

The National Council of Nonprofits and its network of state associations of nonprofits have been tracking these issues and working with governments at all levels to find solutions. The nonprofit sector looks forward to working with Congress and the President on reasonable solutions to the country’s economic issues, ensuring that our communities don’t suffer from rushed or ill-informed decision-making.

Resources

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The National Council of Nonprofits (Council of Nonprofits) is a trusted resource and advocate for America’s charitable nonprofits. Through our powerful network of State Associations and 25,000-plus members – the nation’s largest network of nonprofits – we serve as a central coordinator and mobilizer to help nonprofits achieve greater collective impact in local communities across the country. We identify emerging trends, share proven practices, and promote solutions that benefit charitable nonprofits and the communities they serve. Learn more at www.CouncilofNonprofits.org.

National Council of Nonprofits Statement on Fiscal Cliff Deal

Posted: 
January 2, 2013

The National Council of Nonprofits expresses mixed views about the passage of the "American Taxpayer Relief Act of 2012" (H.R.8, as amended).  

First, we salute Congress for the strong bipartisan vote in passing a compromise bill to avert certain immediate threats posed by the fiscal cliff. We thank those elected officials and staff members on Capitol Hill and at the White House who worked around the clock to make this compromise possible and for maintaining incentives for charitable giving for most Americans. As negotiations continue on the now-postponed sequestration cuts and on the debt ceiling, we encourage Congress and the President to continue to recognize how essential these incentives are for the work charitable nonprofits perform in every community throughout the country.  

However, the National Council of Nonprofits also expresses open frustration and grave concern that Congress and the President have failed to resolve the pending across-the-board cuts of $54.6 billion from domestic spending programs that will touch virtually every person and every community in America. These unprecedented cuts will take away huge amounts of funding for everything from infants to seniors and food safety to safe transportation. Indeed, this legislation continues to leave our country under a cloud of uncertainty regarding severe domestic spending cuts that threaten to push Americans over a human cliff.  

Federal policymakers have failed to recognize that the arbitrary sequestration cuts to domestic programs will reduce funding without reducing the underlying human needs, thereby increasing demands on states, local governments, and nonprofits in local communities while also decreasing resources to provide needed services. Too many policymakers apparently are unaware that federal funding actually flows to the states and localities to deliver basic human services. Often these services are delivered through contracts with nonprofits because governments have found charitable nonprofits to be more efficient and effective, in part because they are mission-driven rather than profit-driven. After five years of serving so many more for so much longer with so much less, America’s charitable nonprofits are past the breaking point.  

Kicking the can down the road means kicking those who are already down and struggling to get back up. We, the American people, must keep up the pressure on Congress and the President to stop the punitive and arbitrary cuts and get to work on continuing our economic recovery.  

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The National Council of Nonprofits is a trusted resource and advocate for America’s charitable nonprofits. Through our powerful network of State Associations and 25,000-plus members – the nation’s largest network of nonprofits – we serve as a central coordinator and mobilizer to help nonprofits achieve greater collective impact in local communities across the country. We identify emerging trends, share proven practices, and promote solutions that benefit charitable nonprofits and the communities they serve. Learn more at www.CouncilofNonprofits.org.

Nonprofits Unite to Protect Charitable Giving and Services to Communities

Posted: 
December 18, 2012

Washington, DC – In response to published reports that President Obama and Speaker Boehner were agreeing on a 28 percent limit on charitable deductions as part of a deal to avert the fiscal cliff, charitable nonprofits across the country have been standing up for the communities they serve to tell the President and the Speaker that they should not impose any caps or limits on charitable deductions. Within hours of learning about the threats to services in their local communities, Americans from across the country quickly started tweeting, emailing, and calling the White House and the Speaker’s Office to oppose any limits on charitable giving.

“The recent proposals to cap or limit charitable giving just don’t add up. Demands for nonprofit services have skyrocketed in the past few years as resources have plummeted due to the recession. Taking away incentives for giving will do far more damage to communities and cost governments at all levels far more than could be gained by implementing a limit on charitable deductions,” said Tim Delaney, President & CEO of the National Council of Nonprofits. “Nonprofits are sending a strong, united message today on behalf of the communities they serve to take this concept off the table. During these tough economic times government should be encouraging charitable giving, not discouraging it.”  

“For years, governments at all levels have presumed that nonprofits would always be their back up, their Plan B for picking up the slack when government programs are shut down,” added David L. Thompson, Vice President of Public Policy for the National Council of Nonprofits. “Without nonprofits, there will be nowhere else for people to turn. Without nonprofits, there is no Plan C. Our elected officials must think twice before making a deal that hurts more than it helps. Every nonprofit staff member, board member, volunteer, donor, and everyone served by these organizations should speak up now to protect the charitable giving incentive in order to safeguard the the work of nonprofits in communities.”

In activating its network of front-line charitable nonprofits across the country, the Council of Nonprofits is providing several tools to help inform policymakers, including an infographic, and a Special Report that provides in-depth information on the potential effects of sequestration cuts or limits on deductions. A special alert sent this morning provided nonprofits with information, a sample Tweet, and how to take action on this issue of critical importance to local communities.

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The National Council of Nonprofits (Council of Nonprofits) is a trusted resource and advocate for America’s charitable nonprofits. Through our powerful network of State Associations and 25,000-plus members – the nation’s largest network of nonprofits – we serve as a central coordinator and mobilizer to help nonprofits achieve greater collective impact in local communities across the country. We identify emerging trends, share proven practices, and promote solutions that benefit charitable nonprofits and the communities they serve. Learn more at www.CouncilofNonprofits.org.

National Council of Nonprofits Statements re Fiscal Cliff: How Arbitrary Cuts and Capping Deductions Will Hurt the Communities Served by Charitable Nonprofits

Posted: 
December 3, 2012

Statement from President and CEO Tim Delaney:

“If Congress fails to act before January 2, 2013, then automatic spending cuts will slash an additional eight percent from almost every domestic program funded by the federal government. The cuts will touch virtually every person and every community in America, taking away huge amounts of funding for everything from infants to seniors and food safety to safe transportation. The cuts will occur not on an informed, considered, priority basis, but arbitrarily and across-the-board, using simple math alone without regard to human consequences. While politicians have been vowing to protect the defense industry from equal cuts, they have not been rushing to protect domestic funding.  

“Making matters worse, politicians have been using sanitized terms such as ‘reducing tax expenditures’ and ‘cap on deductions’ rather than admitting openly that such actions would discourage donations to churches and synagogues, domestic violence shelters, early childhood programs, education, food banks, youth and senior groups, and all other charitable nonprofits. Here is how a cap works: policymakers have discussed setting the cap at $15,000 or $20,000 as the maximum amount an individual could deduct. The big fixed-cost deductions, for mortgage interest (national average of $10,640 in 2010) and state/local taxes (national average of $11,593 in 2010), total on average $22,233, thus eating away the entire deduction and leaving no room for discretionary gifts to the work of charities.  

“These cuts and caps represent twin threats to the work of charitable nonprofits serving individual Americans and local communities. Making funding cuts without reducing the underlying human needs, increases demands on nonprofits in local communities while also decreasing resources for nonprofits to provide needed services. After five years of serving so many more for so much longer with so much less, America’s charitable nonprofits are past the breaking point. Capping deductions will further reduce the ability of charitable organizations to meet the increasing needs for services.  

Additional cuts to domestic programs or disincentivizing charitable giving by placing a cap on all deductions would push many nonprofits over the fiscal cliff.  

“Every nonprofit needs to speak up, today, as negotiations are going on now. We’ve set up a website at www.givevoice.org to help nonprofits reach out to their Senators and Representatives and tell the story of what the charitable giving incentive means to their nonprofit’s survival.”  

Statement from Vice President of Public Policy David L. Thompson:

“Policymakers need to be concerned about the ripple effect on the economy and the wellbeing of their constituencies as a result of these arbitrary cuts and caps. Every nonprofit that closes its doors will place new strains on the economy. Nonprofit employees, who together make up 10 percent of the American workforce, will lose their jobs. Many for-profit and government employees are able to show up for work every day because they have depended on nonprofits to care for their children or elderly relatives; without those nonprofits, they will have nowhere to turn. People who rely on nonprofits for job training and placement services will remain out of work. And the examples go on and on. The effects would be staggering for a still-shaky recovery.  

“For years, governments at all levels have presumed that nonprofits would always be their back up, their Plan B for picking up the slack when programs are shut down. Without nonprofits, there will be nowhere else for people to turn. Without nonprofits, there is no Plan C. Our elected officials must think twice before making a deal that hurts more than it helps.  

“As the President, Senators, and Representatives negotiate a way to avert the fiscal cliff, they need to recognize the ripple effect of any further cuts to domestic programs and ensure they make cuts that do not cost taxpayers more in the long run. And they must immediately take off the table any notion of limiting the effect of tax incentives for charitable giving.  

“We encourage every nonprofit to speak up. Write or call your current Representative and Senators. Call your local paper, radio station, and television station and tell the story of what these cuts would mean to people in your local community and how you rely on charitable giving to meet local needs.”  

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The National Council of Nonprofits is a trusted resource and advocate for America’s charitable nonprofits. Through our powerful network of State Associations and 25,000-plus members – the nation’s largest network of nonprofits – we serve as a central coordinator and mobilizer to help nonprofits achieve greater collective impact in local communities across the country. We identify emerging trends, share proven practices, and promote solutions that benefit charitable nonprofits and the communities they serve. Learn more at www.CouncilofNonprofits.org.

Additional information on the effects of the fiscal cliff or a cap on deductions on nonprofits

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