Tax reform leaves nonprofits with ‘tsunami’ of challenges

Tax reform leaves nonprofits with ‘tsunami’ of challenges

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According to David Thompson, vice president of public policy at the Washington, D.C.-based National Council of Nonprofits, charity-minded organizations are not only facing the uncertainty of new federal tax changes that don’t have clear guidelines, they also face challenges from budget-conscious lawmakers at the local and state level who see nonprofits as a new source of revenue.

“We are facing an unprecedented tsunami of [challenges] that we never had before,” Thompson said in an interview with Talk Business & Politics.

In the January edition of The Chronicle of Philanthropy following the passage of the Trump administration’s omnibus tax legislation, Thompson and National Council President and CEO Tim Delaney wrote that nonprofits must move swiftly to fight for sound public policies that impact mission-minded, charitable organizations.

“The destructive tsunami the new federal tax law unleashes is about to pound the nation’s nonprofits and foundations,” wrote the National Council executives. “The law that Congress passed, and the president signed in the waning days of 2017 has created the most dangerous policy environment across the state, local and federal levels that we’ve ever seen in the decades we’ve spent focusing on how governments and nonprofits interact. That may sound like hyperbole. It is not.”

Besides facing a tidal wave of new tax policy mandates, Thompson said charitable and philanthropic groups were able to successfully block passage of key proposals in the 560-page tax reform package. Two proposals that caused the most anxiety included a plan to repeal the authority of nonprofits and colleges to issue tax-exempt bonds for building projects and another proposal to rescind the so-called Johnson Amendment that barred nonprofits from engaging in partisan politics.

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