Nonprofit Advocacy Matters | June 22, 2010

Landmark Bill to Strengthen Nonprofit-Government Partnership Introduced

Last week, Congresswoman Betty McCollum (D-MN) introduced the Nonprofit Sector and Community Solutions Act (H.R. 5533), a bill designed to transform the way the federal government thinks about and deals with the charitable nonprofit community in the United States. At a news conference announcing the bill's introduction, held in conjunction with the National Council's Lobby Day on Wednesday, McCollum stated, "This legislation is the beginning of a new, positive conversation about the nonprofit sector in Washington and across the country. If Congress can work with leaders in the nonprofit and foundation communities we can build a stronger nonprofit sector, craft smarter federal policy, and create more vibrant communities in every state." Tim Delaney, president and CEO of the National Council, stated at the news conference, "Congresswoman McCollum recognizes the vital role nonprofits play in communities across America and the essential need to strengthen the partnership between government and nonprofits in order to deliver vital services, build capacity, enhance accountability, and save taxpayers money."

The legislation, which is strongly endorsed by the National Council, would 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. Leaders of State Associations of nonprofits from across the country attended the press conference to show their support. Other organizations speaking at the press conference in support of this historic legislation were America Forward, the American Association of Museums, ARNOVA (Association for Research on Nonprofit Organizations and Voluntary Action), Independent Sector, and the Minnesota Council of Nonprofits - the home state of the bill's sponsor. Read more about the new bill and how you can take action on the National Council's website.

Extenders, FMAP Bill Stalled in Senate

Twice last week the Senate failed to end debate on a $118 billion package of tax breaks and spending initiatives that includes several provisions of interest to nonprofits. The Senate version of the bill, known as the American Jobs and Closing Tax Loopholes Act (H.R.4213), contains a six-month extension of federal Medicaid assistance to the states that is seen as critical to balancing many state budgets this month, as well as a one-year extension of the IRA rollover and other charitable giving incentives. The Senate is expected to continue debating the bill this week, and some components may be carved out and passed separately. On Friday, the Senate did just that, passing increased payments to doctors and other providers under Medicare and pension funding relief.

Nonprofit Capacity Building Update

Action in Congress this year on all of the spending decisions, including whether to fund nonprofit capacity building programs, has been stalled as leaders grappled with how to pass a federal budget for fiscal year 2011. That stalemate reportedly may end this week as the House votes on spending limits in each budget area, thus freeing the appropriations subcommittees to make their line by line spending allocations. The budget proposal submitted by President Obama in February recommends no funding for either the Strengthening Communities Fund or the Nonprofit Capacity Building Program, both of which are designed to provide critical funds for nonprofit training and assistance to enable nonprofits to better fulfill their missions and serve their communities. Now is the time for nonprofits to contact their Representatives and Senators to push for full funding of these important capacity building programs. Visit our website to learn more about this important issue.

State and Local Budget Crises Continue

According to Stateline's annual legislative update series, after two years of state revenue declines tax collections have finally increased in several states. However, revenues are still far below pre-recession levels and claims for Medicaid and unemployment insurance are expected to continue to rise. The Stateline Legislative Review provides an excellent overview of the tough decisions that state legislatures have made this year to balance their budgets.

In looking at local budget crises, the Washington Post reports in a story, "Harrisburg, Pa., other cities overwhelmed by economic downturn and debt," that the severe economic strain rolls "across the country as cities and towns deal with the lingering consequences of the economic downturn and mounting debt." Nonprofits need to pay attention to these state and local budget crises that then reach out to hurt nonprofits and the communities we serve, as illustrated by the following stories.

NY Uses Nonprofits to Plug Budget Hole

New York Governor David Paterson has ordered state officials to withhold payments to nonprofits and others as he and the Legislature struggle to reach agreement on a balanced budget. Budget Division spokesman Erik Kriss called delaying payments a necessary evil, stating "We need enough money on hand to pay our bills." Compounding the budget problems, a recent report issued by NY State Comptroller Thomas P. DiNapoli found that state contracts with nonprofit organizations providing services to New Yorkers were approved late 82 percent of the time in 2009, compared to 63 percent in 2008. "The budget crisis is causing a financial crisis for not-for-profits," DiNapoli said. "It's a double shot of trouble. Contracts for services are being held up and organizations can't get reimbursed for services they have already provided. It's wrong to expect organizations that operate on shoe string budgets to float the state."

Illinois Failing To Pay Money It Legally Owes - Hurting Nonprofits and Children

Chaddock, a residential treatment center for severely emotionally disturbed children, has sent word to families that it must discharge its patients because it has not been paid since September by the state of Illinois, which owes the nonprofit $370,000. "It was a very difficult decision … but the lack of payment is starting to affect other kids," said Debbie Reed, president and CEO of Chaddock. Separately, the state owes the nonprofit Sonia Shankman Orthogenic School in Chicago more than $1 million for treating children with severe conditions that need 24-hour supervision for their own safety. Co-director Diana Kon told the Chicago Tribune, "We are scrambling to keep the lights on, the doors open and services up and running."

Colorado Delays Payments to Help Itself, Hurting Others

In an effort to shore up its own cash flow situation, Colorado has delayed $38 million in Medicaid payments to state and nonprofit clinics. The state's action has caused a hardship on others that were depending on getting payments legally owed to them. While some nonprofit clinics had warning of the payment delay, Dr. Larry Wolk executive director of the Rocky Mountain Youth Clinic said, "That's like saying, 'Prepare for me to punch you.' It still doesn't hurt any less."

Boston-area Towns Impose Property Tax on Unused Church Property

Nine cities and towns have forced the Roman Catholic Archdiocese of Boston to pay property taxes on closed churches, schools, convents, and parish halls, contending that the buildings no longer qualify as tax-exempt because the archdiocese is not using them. A recent lawsuit brought by the archdiocese has been withdrawn.

MN Nonprofits Cope with New Economic Landscape

This article from the Minneapolis Star Tribune outlines the impact the recession has had on the nonprofit sector in Minnesota and how several nonprofits are learning to adapt. While the difficulty is not over, it appears that the nonprofit sector has been substantially altered for the foreseeable future.

National Council of Nonprofits Lobby Day Success

State Association Members from all over the country fanned out across Capitol Hill Wednesday to lobby their Senators and Representatives about three key issues: generating support for Nonprofit Capacity Building programs and the Nonprofit Sector and Community Solutions Act (H.R.5533), as well as providing background information about the ongoing investigation into government contracts and grants. Taking part in the third annual National Council of Nonprofits Lobby Day, the State Association representatives conducted over 100 meetings, enhanced relationships, and secured cosponsors for the new legislation. They also educated policymakers and their staff members on the important work nonprofits are doing in communities throughout the country.