Nonprofit Knowledge Matters | Proposed Federal Legislation Would Empower Nonprofits

Have you heard about the Nonprofit Sector and Community Solutions Act?

The National Council of Nonprofits has been working quietly since the fall of 2009 to shape legislation that will help empower nonprofits.

Why is such legislation needed? What we know about the nonprofit sector's impact on the lives of individuals is impressive - in fact, awe inspiring. But what policymakers don't know when they make decisions impacting nonprofits is downright frightening.

For instance, the federal government doesn't know with any precision how many individuals are employed by charitable nonprofit organizations. And when money flows from the federal government through state and local governments for nonprofit programs, the federal government doesn't know how much is taken off the top by state and local governments. How can policymakers possibly make informed decisions when they don't have basic data?
Equally alarming is that nonprofits are at a greater risk of being overregulated today because each of the many federal agencies that oversees an aspect of nonprofit programs can make its own rules and regulations. There is no coordination or consistency of treatment of nonprofits across the federal government, which leads to contradictory policies, increased costs (such as a nonprofit being asked to pay for three different types of audits to comply with three different federal programs), and inefficiencies for all.

What is the legislation all about? The bi-partisan Nonprofit Sector and Community Solutions Act (H.R. 5533) is designed to address these significant problems. At its heart, the goal of the legislation is to make "the Federal Government a more productive partner with nonprofit organizations." The Act would establish: 1) a reliable avenue for nonprofits to communicate with the federal government, 2) better coordination within the government, and 3) enhanced data and research about nonprofits. Read more about the Nonprofit Sector Act.

How does this legislation affect you? The National Council needs you, as someone who is committed to nonprofits, to become informed about the Nonprofit Sector and Community Solutions Act. Read the latest on the landmark nonprofit legislation from the National Council's website and sign up to show your organization's support.  We also ask you to forward this newsletter to others asking them to express their support as well.

Nonprofits Required to File with the IRS Are at Risk of Losing Their Tax-Exempt Status

In our most recent Knowledge Matters newsletter and in communications sent from State Associations of nonprofits around the country, the National Council's network alerted nonprofits that May 17 was the deadline for filing an IRS Form 990 (including the e-postcard, IRS Form 990-N) with the IRS for organizations with their fiscal year closing on December 31st.  For organizations with fiscal years ending at other dates throughout 2010, their filing deadlines are swiftly rolling past.  (The 990 must be filed within 4 ½ months after the end of the organization's fiscal year.)

At least 196,000 nonprofits missed the May 17th deadline, and another 96,500 still need to file their 990-N this year, according to calculations by the National Center for Charitable Statistics (NCCS) as reported on July 8 in Here Today, Gone Tomorrow: A Look at Organizations that May Have Their Tax-Exempt Status Revoked The bottom line is that nonprofits that have never filed with the IRS in the past three years, MUST FILE during 2010 or face the loss of their tax-exempt status. The NCCS report predicts that as many as 292,000 of the 1.6 million nonprofits registered with the IRS could lose their tax-exempt status if they fail to file their 990-N during 2010. Forty-one percent of all registered nonprofits that are required to file the 990-N still have not done so -which raises the possibility that 18% of the entire nonprofit sector is at risk of losing tax-exemption.

• Read the report to learn about organizations, such as those run entirely by volunteers, that may be most vulnerable to losing their tax-exempt status.

Don't let a nonprofit you care about lose its tax-exemption!

• Search for a nonprofit to find out whether the nonprofit is on the brink of losing its tax-exemption. Check this state-by-state list.

• It's easy to file. The 990-N has only 8 questions, is free, and takes less than 15 minutes to complete the form online. Even if your deadline has passed, the IRS urges small nonprofits to file.

• Small organizations are urged to file now.

• Questions? Visit the IRS website for guidance on which organizations needs to file, by when, and with what form.

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Nonprofit knowledge matters!