Celebrate National Voter Registration Day
Join Nonprofit VOTE, the National Council of Nonprofits, the National Association of Secretaries of State, and more than 1,500 organizations (and counting) in celebrating the nonpartisan National Voter Registration Day on September 23rd. National Voter Registration Day is a time to promote voter registration and register voters ahead of registration deadlines. National Voter Registration Day falls 6 weeks before Election Day and is the time to ensure our communities are registered and ready to participate. Why nonprofits? Because we reach audiences no one else does and because our community has always been about promoting democracy, engagement, and community building.
Taking action is easy. Pick and choose what information you would like to share with your staff, board members, clients, family, and friends from the free Voter Information Toolkit such as the online voter registration tool, and find a National Voter Registration Day event near you. Learn more at www.NationalVoterRegistrationDay.org and use #CelebrateNVRD on social media to spread the word!
Congress Heads Home for the Elections, Much Left Undone
The House and Senate adjourned last week and are not scheduled to return until the week after the November 4 elections to finish the business of the 113th Congress. Despite the calls for action from many Senators, nonprofits, and foundations, Senate leaders did not take up the America Gives More Act, a bill that would make permanent and expand several charitable giving incentives, streamline the foundation excise tax, and extend the time that individuals have to make tax-deductible donations to their favorite charities. Before leaving town, Congress approved the Iraq/Syria military plan and temporarily funded the government into December. The “lame duck” session is expected to address a short “must-do list” that includes a spending bill that runs through the fiscal year (until September 30, 2015), a tax bill containing several policy provisions including extension of expired tax provisions collectively known as “extenders,” and, depending on effective advocacy efforts by the nonprofit community, the components of the America Gives More Act. Learn more about what nonprofits can be doing now.
Consensus on Social Impact Bonds Remains Elusive
Social Impact Bonds remain a hot topic of debate on both sides of the Atlantic with no clear consensus on whether the new funding mechanisms will actually increase the level of resources going to promising social interventions or result in increased costs to governments/taxpayers due to the added layers of activities. On September 9, a House subcommittee held a hearing to discuss the merits of Social Impact Bonds in relation to federal SIB legislation. The bill’s sponsor and several witnesses hailed SIBs as a new, innovative tool to improve social and public health outcomes, s tating that SIBs are a preferable model for funding social programs since they fund results rather than intentions and success is measured by outcomes not inputs. A witness opposed to SIBs, Dr. David Juppe, who conducted an in-depth review for the Maryland Legislature, expressed concern that the funding mechanisms often overstate the cost savings and likelihood of success. He pointed to his research indicating that SIB-financed projects actually increase the costs to government even if the projects succeed. The hearing took place before disparaging words were expressed by British MP Nick Hurd, who previously had expressed support for SIBs when he served as Charities Minister for the conservative government. Hurd stated that social impact bonds are “clunky, take too long and are too expensive to set up,” and that they needed to be improved before pursued in the future.
New York Establishes Nonprofit Coordinating Unit
The State of New York is taking a significant step toward strengthening relationships with nonprofit organizations by creating a new unit within the Division of Budget dedicated to nonprofit issues. The Nonprofit Coordinating Unit will focus initially on addressing late payments and late contracting matters, as well as promoting compliance, presumably including implementation of the federal OMB Uniform Guidance that goes into effect at the end of 2014. The new unit is overseen by Fran Barrett, the Governor’s Interagency Coordinator for Not for Profit Services, who also co-chairs the National Council of Nonprofits' National Task Force on Government-Nonprofit Contracting Reform. “We are excited that this will become a hub for dealing with nonprofit issues,” Barrett said. “As issues surface, they can be resolved more quickly. It strengthens the lines of communication and gives us dedicated resources. We can test new ideas and put new systems into place. This unit will have the clout and capacity to bring some of these ideas to fruition. This shows that the nonprofit sector is a priority for the governor and his administration.”
More States Reinstate Work and Volunteer Requirements for Food Stamp Recipients
Seventeen states will soon see the end to temporary waivers that allowed able-bodied adults without dependents to access SNAP benefits (food stamps) without proof of work or volunteerism, Stateline reports. According to federal law, these individuals may receive SNAP benefits for only three months in a three-year period unless they are actively working or participating in a job-training or volunteer program. The 2009 economic stimulus package allowed states with high unemployment rates to seek waivers for this requirement; almost every state chose to do so. The waiver has been phased out in other states over the past two years due to either improving economic conditions or state preferences. The change to requirements can affect up to 4.6 million SNAP recipients. Nonprofits could see an increase in requests for volunteer opportunities from these individuals. Generally, the National Council of Nonprofits opposes the conditioning of statutory benefits on performance of volunteer or community service, terming the policy “mandatory volunteerism,” because forcing people to "volunteer" imposes increased costs, burdens, and liabilities on nonprofits by creating an influx of coerced individuals.
Government-Nonprofit Contracting Update
New York Salary and Administrative Caps Still Uncertain
Governor Cuomo’s 2012 Executive Order directing state agencies to adopt rules to limit the use of state funds in executive compensation and organizational administrative costs continues to be challenged in the courts. The Executive Order has resulted in two conflicting rulings from trial level courts so far. Last month, a court declined to dismiss a suit filed by several healthcare associations. It is likely that all of this will eventually be decided by the Court of Appeals. The Executive Order caps at $199,000 the amount the state will reimburse for executive salaries at for-profit and nonprofits performing work under contracts/grants with the state. The E xecutive Order also seeks to limit reimbursement for administrative costs (initially capped at 25 percent, declining to 15 percent over the next three years). Nonprofit contractors are recognizing that this arbitrary limit on administrative or indirect costs appears to conflict with the new OMB Uniform Guidance, which expressly requires state and local governments to reimburse nonprofits for their true costs when performing work for the state that is funded using federal grant dollars.
Puerto Rico Increases Charitable Giving Through Tax-Law Change
Puerto Rico’s tax treatment of charitable donations was changed in 2010, resulting in almost 20,000 more residents making a charitable deduction the next year and generating $5 million more in giving to the work of nonprofits across the commonwealth, the NonProfit Times reports. In 2010, Puerto Rico changed its deduction policy to match federal law in the U.S., allowing individuals to deduct 100 percent of donations up to 50 percent of adjusted gross income. Previously, Puerto Rico imposed a 15 percent cap on deductions and a 3 percent income floor.
Philadelphia Schools Look to New Funding Schemes, Wait for Legislative Action
Continuing a trend of schools seeking new funding streams, Philadelphia public schools are hoping to spark a viral giving trend seeking school supplies, such as paper, for the year. Philadelphia schools opened this year with an $81 million deficit, which some policymakers intend to fill through a $2-a-pack cigarette tax. The Philadelphia school superintendent has said that if the tax isn’t passed by the beginning of October, he will be forced to lay off more than 1,000 employees, including teachers. For the time being, schools are turning to a start-up called Leadnomics to provide everyday necessities, such as paper.
Additional State and Local Issues
Advancing Mission through Voter Engagement
So, if a nonprofit works to remain scrupulously nonpartisan as the law and good sense require, why should it get involved in voter registration efforts, such as National Voter Registration Day, and other election-related activities? Good question. Let’s ask some experts:
Nonprofit VOTE will tell you that “Voter engagement is a critical part of nonprofit work because it not only empowers the people and the communities we serve, but it also helps us further our missions. Voter engagement makes our nonprofits relevant both during and after elections, helping to make us part of critical public policy discussions and allowing us to weigh in on our issues.”
The National Council of Nonprofits’ president and CEO Tim Delaney observes: “Nonprofits helping people register to vote so they can have a say in the future of their communities are honoring the noble quest that President Lincoln challenged us all to do – ensure ‘that government of the people, by the people, for the people, shall not perish from the earth.’”
The Colorado Nonprofit Association views voter engagement in terms of what nonprofits give and get back from the community: “Nonprofits play various roles in building healthy communities. Nonprofits rely on our communities to provide support for our causes, volunteer for our events, and keep us informed on how we can best help. Community involvement is also vital for ensuring elected leaders govern wisely on behalf of the people they represent.”
CT Nonprofits, the state association of nonprofits in Connecticut, goes for the two-pronged approach, explaining that the two most important roles of nonprofits while engaging in nonpartisan election-related work are: “educating candidates about the critical work your organization does in the communities the candidates represent; and encouraging all of your organization's constituents to vote - your staff, volunteers, customers, clients, and all other stakeholders.”
The Vote with Your Mission campaign of CalNonprofits is firmly committed to these principles, stressing, “When nonprofits use our voting power, we advance our causes, make our voices heard and change the world for the better.” Equally strong statements of purpose have been registered by state associations of nonprofits across the country, including Arizona, Minnesota, North Carolina, and Pennsylvania.
A Board Member's Guide to Nonprofit Overhead, by Jan Masaoka and Steve Zimmerman, Blue Avocado, September 1, 2014, explaining what “overhead” costs are and what nonprofit board members need to know. Here’s a significant quote worth repeating: “overhead costs are crucial costs: liability insurance, staff training, computers and fundraising staff are all necessary costs. Overhead is necessary for credible financial statements, quality services, safe facilities, and the costs of fundraising.”
Nonprofits: Bill would free more funds, Sherri Welch, Crain’s Detroit Business, September 21, 2014, quoting Rob Collier, president of the Council of Michigan Foundations as saying that the America Gives More Act, H.R.4719, is "the biggest thing for the charitable sector since the introduction of the IRA charitable rollover in 2006."
Take Away Harvard’s Nonprofit Status, Annie Lowrey, Slate, 9/10/2014, arguing that “mega-rich schools hoard funds and real estate, tax-free, to the detriment of local communities or federal coffers,” and proposes treating some nonprofit higher-education institutions differently by imposing “a wealth tax on endowments over $1 billion, property taxes, or a tuition sales tax.”
Numbers in the News
Focus: Charitable Giving
$17 and $34 billion less, annually
The estimated reduction in charitable giving by individuals if Congress were to adopt the tax reform proposals of Ways and Means Committee Chairman Camp (R-MI).
Source: Preliminary Estimates of the Impact of the Camp Tax Reform Plan on Charitable Giving, Urban Institute Center on Nonprofits and Philanthropy and the Urban-Brookings Tax Policy Center, August 2014, which determined that the total impact of the tax reform discussion draft would reduce individual giving in the range of 7 to 14 percent.
Tax Revenue Recovery Varies Widely; 26 States Still Behind, Pew Charitable Trusts, August 19, 2014. See whether your state’s tax revenues have recovered from the Great Recession, when adjusted for inflation. Hint: Some states are doing very well, but most have not yet fully recovered.
“The Denver Office of Strategic Partnerships (DOSP) was created in January 2004 to serve as a liaison between the City of Denver and the nonprofit sector. DOSP serves as a catalyst to leverage the best of Denver's public and nonprofit sectors to engage in innovative and collaborative work. DOSP believes that by working collectively, the public and nonprofit sectors can be even more efficient and effective in strengthening Denver's communities.”
- Denver Office of Strategic Partnerships website, quoted here to show that partnerships between governments and nonprofits is a way of life in Denver, and can be elsewhere by embracing the truth that both sectors can better serve the public through collaboration.