Nonprofit Advocacy Matters | August 2, 2010

Sign Up to Support Nonprofit Sector Legislation

Join more than 180 nonprofits showing their support for the Nonprofit Sector and Community Solutions Act by adding your organization's name to the list. This landmark legislation will strengthen America's communities by making the federal government a more productive partner with nonprofit organizations by establishing 1) better communication with the federal government, 2) better coordination within government, and 3) enhanced data collection and research.

FMAP Vote This Evening

This evening the Senate is scheduled to take a procedural vote on an amendment that, among other things, would provide $16 billion in additional funding for the states through the Federal Medicaid Assistance Percentage (FMAP) program. If enacted, the provision would provide an additional six months of funds that at least 27 states assumed they would have when they passed their budgets earlier in the year. The underlying bill would reauthorize the Federal Aviation Administration.

Small Business Bill a Grab Bag of Issues

The Senate is also currently debating a version of small business jobs legislation that is raising several issues of interests to nonprofits. The measure under debate currently includes a provision to remove cellphones and BlackBerry devices from IRS disclosure requirements, an ongoing problem for nonprofits, particularly during IRS audits. There may also be an amendment offered by Sen. Johanns (R-NE) to repeal a new law that requires nonprofits and other employers, starting in 2012, to file IRS 1099-Misc forms for all vendors receiving at least $600 per year. The IRS is seeking public comment on ways to minimize the impact of the new disclosure requirement. 

IRS Extends Filing Deadline for Small Nonprofits

The IRS has announced relief for small nonprofit organizations to come back into compliance and retain their tax-exempt status even though they failed to file for three consecutive years. The smallest organizations (under $25,000) that are required to file the Form 990-N (e-Postcard) can maintain their tax-exempt status by filing the required electronic notice by October 15, 2010. Other small organizations – those eligible to file Form 990-EZ for all three years - can use a one-time voluntary compliance program (VCP). If an organization loses its exemption, it will have to reapply to regain its tax-exempt status.

State Budget Deficits Shrinking Temporarily

After enduring two years of crippling budget deficits, states may have slightly better times ahead, according to a new report issued last week by the National Conference of State Legislatures. But "slightly better" is a relative term, meaning "not good – and not even close to returning to 'normalcy' of before the Great Recession – but simply a little better than the horrendous nature of the last couple of years." In the fiscal 2011 budgets  state legislatures have  already enacted, the states are projecting that budget gaps of more than $12 billion may open up (and that number does not include the even larger state deficit holes that will be created if Congress fails to provide the FMAP funding). Looking ahead to 2012, they’re projecting collective deficits of $72 billion.

State Campaign Disclosure Laws

New rules requiring disclosure of corporate and union spending on political advertisements have become law in recent months in ten states - Alaska, Arizona, Colorado, Connecticut, Iowa, Massachusetts, Minnesota, South Dakota, Washington, and West Virginia. The states enacted the laws following the Supreme Court ruling in Citizens United which permitted corporations and unions to spend freely on political campaign commercials.  A similar effort in Congress has been stalled due to a filibuster in the Senate.

MA & NH: PILOTs Under Consideration

Officials in Concord, MA, and Manchester, NH, are reportedly considering seeking payments in lieu of taxes (PILOTs) from nonprofits. Concord has sent letters to nonprofit organizations asking them to consider making voluntary payments to help with city budget shortfalls. "Private schools and nonprofit museums and community organizations benefit the town in lots of ways, except that they don’t contribute to the cost of running the town," a Concord official said.

Government Contracting Update

Illinois Comptroller Releases List of Debts to Nonprofits

At the request of Illinois Partners for Human Services, the state Comptroller released a 50-page listing of nonprofits owed more than $500 million from the state of Illinois for just the first six months of this year. In addition to debts to larger organizations, such as Catholic Charities ($10 million), the YMCA ($1.4 million), and YWCA ($930,000), the listing includes hundreds of human services and health organizations, as well as several arts, museum, and symphony groups.

NY: No Budget, No Bills Payments

Nonprofit service providers are continuing to be denied payment for services provided since April 1st pending a resolution of the State’s budget deadlock in Albany, the New York Nonprofit Press reports.