Congressional Agenda and Election-Year Politics
Return to Regular Order, for Some (for Now)
When Congress returns from its Passover-Easter recess next week, it faces a long list of “must pass” items that many expect will not be addressed until after the November 6 federal elections. Some matters in the headlines may only be political posturing to partisan bases, such as a call to enact a second round of tax cuts and the President’s recent tweet declaring “no more DACA deal,” referring to efforts to clarify the status of children brought into the United States by their undocumented
immigrant parents. One group of lawmakers, however, appears to be committed to returning to regular order. Now that the spending bill for the current fiscal year is complete in the form of the omnibus spending bill, members of the House and Senate Appropriations subcommittees are gearing up to write, mark up and vote on a dozen bills to fund the federal government in fiscal year 2019 that starts on October 1. Because the hardest question – how much to spend – was resolved in the Bipartisan Budget Act in February, which empowers appropriators to spend an additional $85 billion for defense and $68 billion for nondefense discretionary accounts in FY 2019, there is some optimism that lawmakers will follow the budget and spending process dictated by congressional rules.
Regardless of the current enthusiasm for regular order, Congress typically adopts a short-term spending bill in late September, especially in the weeks before an election, and delays serious decisions until December. This could lead to the attachment of many partisan, election-focused messaging provisions in the appropriations bills designed to attract voter attention and support while scrambling policy debates. Nonprofits must remain vigilant to ensure that the appropriations process does not once again become an opportunity for extraneous and harmful riders, such as any anti-Johnson Amendment provision to politicize 501(c)(3)
Census 2020 to Include Citizenship Question
The 2020 decennial census questionnaire will ask individuals whether they are U.S. citizens, the U.S. Commerce Department announced last week. The stated reason for adding the controversial question, which has not appeared on the questionnaire since 1950, is to help enforce the Voting Rights Act, according to a news release and memorandum issued to justify the decision. Nonprofits and others working to promote a full and complete census have expressed concern that the citizenship question could create fear among certain populations that the government will use the responses (or non-responses to certain questions) as an excuse to take actions against individuals. That fear could depress the number of responses from immigrants and residents, producing an undercount disproportionately affecting those populations. The New York Attorney General said the question
“will create an environment of fear and distrust in immigrant communities that would make impossible both an accurate census and the fair distribution of federal tax dollars.” Officials in at least 12 states have indicated they will pursue legal action.
Many people have focused on what an inaccurate census count can mean to the allocation of congressional and legislative district seats and of rural versus urban representation. But for nonprofits as well as city and state governments, the more direct consequence of a bad census count come from the misallocation of resources as undercounted communities will then be further underfunded. Census data is used in about 300 federal programs to determine where more than $800 billion in federal funds are allocated every year. For geographic areas with undercounts, human needs for food, health, housing, and job training will still exist
but not be recognized in the official census count. These challenges put more pressure on nonprofits, state and local governments, and businesses in those areas to do even more to meet those real needs without their fair share of federal support.
See the Council of Nonprofits' webpage on the U.S. Census 2020 for more information on the upcoming census and the role of nonprofits.
- Commuter Benefit Tax Interpreted Broadly: The new federal tax law imposes a new tax on nonprofits that provide commuter and parking benefits to their employees. Recent IRS guidance suggests that nonprofits will need to pay unrelated business income tax (UBIT) on these benefits. The guidance surprised many accountants and attorneys by holding that nonprofits will be liable for the tax regardless of whether the nonprofit pays these benefits directly or whether employees effectively pay these expenses as part of a compensation reduction agreement. This new tax applies to parking and commuter benefits provided
beginning on January 1, 2018 onward and are taxed at the corporate rate of 21 percent. Some localities require certain employers to provide access to these previously tax-free benefits to employees, meaning that the new tax law could impose significant penalties for employers following local mandates.
- IRS Reorganization Under Consideration: A bipartisan bill to modernize the Internal Revenue Service’s information technology, infrastructure, and taxpayer services will soon be introduced by Reps. Lynn Jenkins (R-KS) and John Lewis (D-GA). Released as a discussion draft to solicit public input, the Taxpayer First Act will, among other things, propose requiring most nonprofits to electronically file (e-file) their Form 990s, a policy long supported by the National Council of Nonprofits and other organizations. The Ways and Means Oversight Subcommittee is seeking suggestions for including additional
metrics in order to measure the success of the proposed legislation. Comments should be submitted electronically by April 6, 2018 to firstname.lastname@example.org.
- Federal Opposition to States Student Loan Regulation: The U.S. Department of Education is fighting a new law in Washington State that provides a student loan bill of rights regulating student loan servicers by creating a state advocacy office and requiring licensure of servicers. A federal notice warns states that have enacted similar legislation, including California, Connecticut, Illinois, and Washington, that federal law preempts any state
regulations to protect borrowers from aggressive servicers and collectors. Thirty state attorneys general had previously urged Congress not to preempt state laws or “wrongly interfere with traditional state police powers and potentially harm the students and borrowers who rely on the federal student loan program.”
In Focus: Child Protection Improvements Act
The omnibus spending bill includes language from the bipartisan Child Protection Improvements Act (CPIA) to close gaps in access to FBI fingerprint background checks for nonprofits and organizations working with children, the elderly, individuals with disabilities, and other vulnerable populations. The system provides information to organizations to inform decision-making regarding potential volunteers and staff. The YMCA of the USA, MENTOR, and American Camp Association issued a joint statement applauding the inclusion of the clarifying language, stating, “While youth-serving organizations like ours have internal child-protection policies and multifaceted staff-screening procedures, too many organizations have lacked access to finger-print based background checks.” The statement continued, “We now have another tool in our toolbox to fully protect children.”
SALT Workaround Enacted in New York
New York lawmakers over the weekend enacted a $168 billion budget for fiscal year 2019 that includes the first new law designed to get around the federal $10,000 cap on the deductibility of state and local taxes (SALT) enacted in December. The New York FY 2019 Budget creates two new state-operated Charitable Contribution Funds, one for health care and the other for education in New York. Assuming the workaround plan is deemed
lawful by the IRS, a question that is in dispute, state taxpayers who itemize deductions will be able to claim these contributions as charitable deductions on their federal tax returns. Those taxpayers may also claim a state tax credit equal to 85 percent of the donation amount for the tax year after the donation is made. The legislation also authorizes school districts and other local governments to create charitable funds that accept donations and reduce local property taxes (via a local credit) equal to a percentage of the donation. Legislators in at least seven other states (California, Connecticut, Illinois, Nebraska, New Jersey, Virginia, and Washington State) are considering, or have considered,
similar SALT workaround legislation.
SNAP Recipients Subject to Work Requirements and Mandatory Volunteerism
West Virginia quietly passed a bill to add a work requirement or mandatory volunteerism as an eligibility criterion for receiving benefits under the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps. Starting October 1, 2018, any able-bodied adult between 18 and 49 years of age without dependents must work, volunteer with nonprofits, or participate in workforce training programs for 20 hours per week. This new condition comes in the wake of states seeking
approval to attach similar work requirements and mandatory volunteerism to Medicaid benefits. Arkansas is the latest state to receive Trump Administration approval for imposing a work and volunteering requirement that limits eligibility for individuals to participate in the Medicaid program. To date, 10 states have or are seeking such approval. Bills in Colorado, Connecticut, New Hampshire, Oklahoma,
and Wyoming have been introduced this year dealing with work requirements.
More detail on mandatory volunteerism and its effects on nonprofits can be found in the blog, "Don’t Take Away the Commitment to Giving Back." And watch our very brief (2:29) video on Mandatory Volunteerism.
Oklahoma Preserves Charitable Giving Incentive
After years of tax cuts and spending austerity, Oklahoma lawmakers reversed course last week and increased taxes by $447 million to fund teacher and other public employee pay raises and additional education spending. One way the Legislature increased revenues was by capping itemized deductions at $17,000, as has been proposed in several other states in recent years. Hawai`i, Kansas, and North Carolina, and now Oklahoma exclude charitable donations from
under the cap, meaning that donations to the work of charitable nonprofits continue to be deductible under state tax law.
Legislatures Consider Employment Legislation Affecting Nonprofits
- Connecticut: A bill introduced last month would raise wages for nonprofit human services providers and form a study group to determine whether direct service staff at nonprofits are adequately trained. According to the CT Nonprofit Community Alliance, the state association of nonprofits, it has been “eleven years since community providers of services on behalf of the Department of Disability Services were granted a rate increase to cover increasing fixed costs of doing business, including employee
- New Jersey is considering a landmark pay equity bill. The measure would set guidelines to determine equity, allow employee victims of pay discrimination to recoup up to six years of back pay, set a court award of three times any monetary damages for unlawful employment practices, including pay discrimination against a protected class, and prohibit an employer from restricting an employee or potential employee from discussing or disclosing compensation with others.
Government-Nonprofit Contracting Reform
Improving Government-Nonprofit Collaboration in New York City
The New York City Nonprofit Resiliency Committee, led by the Mayor’s Office of Contract Services, works to improve collaboration between the City and nonprofits to streamline administrative policies and practices. After one year in existence, the Committee, which includes the Nonprofit Coordinating Committee of New York, has accomplished a number of changes in contracting designed to streamline and enhance current processes. Among other things, the group has developed a guide to identify how and when nonprofits can communicate with City agencies about the preparation of request for proposals so that nonprofits have
input in advance on program design. Also, as a result of nonprofit engagement with the Resiliency Committee, the City is currently piloting standardized audits which include allowing nonprofits to submit required materials for financial desk audits through an existing document vault. A recent podcast discusses the importance of establishing a listening and brainstorming process to identify issues and solutions to those problems.
Research, Analysis, Action
For multiple reasons, everyone in America needs to read the powerful op-ed that Tamara Copeland, President of the Washington [D.C.] Regional Association of Grantmakers, wrote last week: “How Philanthropy Can Work to Give All Black Men an Opportunity to Succeed” Chronicle of Philanthropy (March 29, 2018).
First, foremost, and above all else, it should be read for its content – the human cost of racism demands everyone’s attention. Tamara’s opening sentence provides access to additional important readings by linking to this New York Times article, Extensive Data Shows Punishing Reach of Racism for Black Boys (March 19, 2018), which in turn links to the underlying research report: Race and Economic Opportunity in the United States, Executive Summary (The Equality of Opportunity Project, March 2018).
Beyond the content, those of us in the 501(c)(3) community reading Tamara’s piece should consider as well how her op-ed deploys research and analysis as an effective form of nonprofit advocacy. Used properly, research and analysis can be a powerful advocacy tool for substantiating/translating an issue, identifying solutions, and mobilizing action. Or, as we say here at the National Council of Nonprofits: What’s the problem? What are the solutions? Let’s get it done.
- Substantiate/translate: Until a problem is documented, it can be dismissed too easily as being “just anecdotal” or simply someone’s beliefs or feelings. Reliable data make it difficult for thinking people to ignore the truth of facts. For instance, it’s impossible not to be startled when reading the research finding that 99 percent of black boys fare worse economically as adults than white
boys, even when they grow up next to each other with parents who earn similar incomes. That said, data alone is not enough. Research data, so often dry and esoteric, usually needs to be re-packaged in ways that capture attention. As Tamara notes, the New York Times “distilled the findings in attention-grabbing graphics and words.” But even pretty pictures and understandable words won’t be enough unless the audience sees some relevance to their own lives, which is something advocates can do.
- Identify solutions: The value-add of an advocate is to identify possible solutions and mobilize people to get it done. Tamara’s op-ed identifies corrective action steps that grantmakers can take.
- Mobilize action: Most people associate “advocacy” with direct contact with government officials. Yet effective advocacy can be aimed at many others who can help shape sound policies. Here, Tamara saw the need to involve many others in the solution, so she wrote her piece for the Chronicle of Philanthropy, not the U.S. Senate or Governing magazine. By circulating the New York Times article in her op-ed, Tamara expanded the awareness of the impossible-to-ignore research and increased the number of potential advocates to push solutions.
Finally, after reading the research and analyzing the advocacy, we each need to take action to help solve this national crisis.
It doesn’t matter what motivates you. It could be because you are inspired by the self-evident truths expressed in our Nation’s founding document, “that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” Or perhaps you take action because you are frustrated that 55 years after Dr. King shared his immortal dream that people will be judged by the content of their character rather than the color of their skin, that dream still has not been fully realized. Or maybe you are embarrassed about the shocking research documenting that 99 percent of black boys will fare worse as adults than their
What does matter is that we all must do our part in eradicating this injustice.
Read more examples of Advocacy in Action, a regular feature of Nonprofit Advocacy Matters.