Announcing National Webinar
Fixing the Rules Governing Government Grants
Governments rely on nonprofit organizations to promote wellbeing in communities by providing services to individuals at all stages of their lives. Yet, governments are not always good partners when it comes to reimbursing nonprofits for the costs of providing those services. That could change for the better – and soon. The federal government recently proposed revisions to the primary law governing government grantmaking – the OMB Uniform Guidance – that could result in greater reimbursements for indirect costs, reduce administrative burdens, and increase transparency. Many nonprofits are asking: What would
these changes mean? Do the revisions go far enough? Is there anything I can do to make things better? Learn more by joining the nationwide webinar, Fixing the Rules Governing Government Grants, Tuesday, March 10, 2020 at 3:00 pm Eastern. This free program is presented by the networks of the National Council of Nonprofits and the National Human Services Assembly.
Advancing Proactive Legislation in a Stagnant Year
The year 2020 is turning out to be very active for federal regulatory agencies and the courts (see articles below and recent editions of this newsletter), but few expect that Congress will be able to enact significant legislation this year, whether advanced by nonprofits or other segments of the economy. That pessimism isn’t stopping charitable organizations from working to secure bipartisan support to advance a wide range of proactive legislative proposals. Notably, at least three bills (H.R. 651 / H.R. 1260 / H.R. 5293) would create a universal, or non-itemizer, deduction to help overcome the potential adverse impact of the 2017 tax law. Other bills seek to remove new impediments enacted as part of the 2017 tax law, such as the unrelated business income tax on separate “trades or businesses” (H.R. 513 / S.1282). The Nonprofit Relief Act (H.R.3323) goes further by also extending paid leave tax credits and fixing a problem with volunteer mileage reimbursements. Outside the tax realm, nonprofit and business coalitions have engendered bipartisan support for programs and improvements to benefit services and communities. One such example is Youth Workforce Readiness Act (S. 3144 / H.R. 5236), a bill with the goal of helping young people build the necessary knowledge, skills, and experiences that will prepare them for the 21st century workforce.
- 2020 Census at Risk: The U.S. Census Bureau is behind on some of its goals - like recruiting enough workers - and needs to address concerns with its internet response system, according to a recent report of the Government Accountability Office. The report also found significant IT and cybersecurity challenges, which is especially concerning since this will be the most internet-reliant census in history. According to GAO, the 2020 Census is on its High Risk list because, as of this month,
28 of GAO’s 112 recommendations have not been fully implemented. As discussed in the Census Resources/Events box below, nonprofits throughout the country are working to overcome such shortcomings for the sake of our communities.
- Community Reinvestment Act: The Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation (FDIC) have proposed revised rules under the Community Reinvestment Act that are raising concerns of community activists. Currently, the law requires banks to work with nonprofits, small businesses, local officials, and community groups where they are physically located, specifically to serve low-to-moderate income neighborhoods. The proposed regulations may decrease public accountability and expand the types of activities that qualify as a CRA investment. “We can’t eliminate
geographic assessment areas,” according to the National Community Reinvestment Coalition. “We can’t allow banks to cherry-pick where they lend – and where they don’t lend at all. We can’t allow banks to ignore the credit needs of distressed and vulnerable communities. We can’t allow a reboot of redlining,” the group recently wrote. Comments are due March 9.
- Medicaid Work Requirements Blocked: Earlier this month a federal appeals court struck down a new Medicaid work requirement in Arkansas, blocking the Administration’s efforts to limit access to Medicaid by allowing states to impose work requirements. The court ruled that the U.S. Health and Human Services Department did not have the authority to require Medicaid enrollees to work to obtain coverage, which several states had attempted to implement over
the past few years. The court found that the rule’s “alternative objectives of better health outcomes and beneficiary independence are not consistent with Medicaid. The text of the statute includes one primary purpose, which is providing health care coverage without any restriction geared to healthy outcomes, financial independence or transition to commercial coverage.” The decision may be appealed to the U.S. Supreme Court.
Budget Battle In Focus
The President’s proposed budget would eliminate dedicated federal funding for 21st Century Community Learning Centers (21st CCLC), largely run by nonprofits, and create a single block grant to support nearly 30 existing education programs. The move could cause more than 1.7 million young people to lose a safe place to go after school while parents finish work. “21st CCLC is a public-private model that encourages partnerships, leverages local resources and expands opportunities for millions of young people in their communities,” according to Ridgway White, President and CEO of the Charles Stewart Mott Foundation. He continued: “Research shows every dollar invested in afterschool programs saves $3 by improving kids’ performance at school.” According to the YMCA of the USA, “Out-of-school time programs … enhance what kids learn during the school day and create new experiences that give them opportunities to explore STEM careers, participate in service learning projects and develop decision-making, problem-solving, critical thinking and communication skills, and so much more.”
2020 Census Update
Nonprofits are leading efforts to ensure a fair, accurate, and complete count in the 2020 Census, which begins in 36 days. Communities in rural areas and states with high poverty rates may be hurt most by an inaccurate count. While all states rely on census data for more than $1.5 trillion in federal funding, the allocation also determines a large portion of personal income in certain states like Kentucky,
Mississippi, and West Virginia. Reaching these often undercounted communities, as well as people in other hard-to-count areas, is exacerbated by suspicion and fear that their answers will be used against individuals, according to a recent survey. “This underscores the importance of outreach efforts that are already under way, focusing the benefits of participation and countering the misinformation that people are getting,” said Michael Karpman of the Urban Institute, which
conducted the survey.
New State Census Videos
2020 Census Calendar
- Mar. 12-20: Households begin receiving heads-up postcards from U.S. Census Bureau
- Mar. 23: Self-response begins via online, by phone, or by mail
- Mar. 30-Apr. 1: Households receive reminders to respond. The U.S. Census Bureau, in collaboration with many nonprofits, will begin counting people experiencing homelessness
- Apr. 1: Census Day
- Apr. 8-16: Final postcard reminders mailed along with paper questionnaires
- May 13-July 31: Census enumerators conduct door-to-door canvassing of households that have not responded
Upcoming Training Events
States Advancing Tax Reforms
Legislators in many states are opening tax codes to promote charitable giving and adjust sales taxes.
- Charitable Giving Incentives: Last week, the Arizona House passed two bills (B. 2355 / H.B. 2356) that would increase the value of the non-itemizer deduction enacted last year. Lawmakers in New Jersey have reintroduced bills (A.1115 / S.264) to enable taxpayers to deduct
charitable contributions from state income taxes. Bills in Kansas and Maryland would support charitable giving by allowing state taxpayers to itemize their state deductions, regardless of whether they itemize or take the standard deduction. A measure in Illinois would create an income tax credit for taxpayers that own and operate a small farm and make a qualifying food commodity donation to a food bank or emergency
feeding organization. Legislation in West Virginia would establish a corporate net income tax deduction for retail food distributors that donate surplus food products to school pantries.
- Sales Taxes: A package of bills introduced by a Pennsylvania lawmaker would eliminate all sales tax exemptions and reduce sales tax rates statewide, as well as cut additional local sales tax rates near Philadelphia and Pittsburgh. In Washington State, an existing sales tax exemption for nonprofit fundraising and libraries is set to expire this year unless the Legislature renews it. The fundraising provision establishes a tax exemption for nonprofit donors who either purchase or win items at nonprofit fundraising events. Washington Nonprofits, the state association of nonprofits, points out that the current exemption “encourages donors to bid generously at fundraising auctions and participate in raffles” and “avoids the administrative burden to nonprofits having to collect and administer taxes at their fundraisers.”
Property Taxes on State Legislative Agendas
Lawmakers across the country are looking to raise revenues or cut taxes through reforms to property tax exemptions. Most directly affecting nonprofits is a bill in Florida that targets nonprofit hospitals by both limiting the state’s tax exemption for qualified property owned by nonprofit hospitals and creating a property valuation of exempt properties owned by hospitals based on net community benefit expense. A measure in Nebraska would reduce property valuation taxation by a percentage
each year and adjust the school funding formula accordingly. Although the bill would not affect nonprofits directly – as generally exempt from property taxes – nonprofits have expressed concern about the negative impact on the state’s treasury and programs it funds. The Nonprofit Association of the Midlands (NAM) wrote: “As we’ve seen before, when the state cuts services for programs such as K-12 education, Nebraskans turn to nonprofits to help meet their needs. For this reason, NAM has concerns about the overall impact of LB 974 on the nonprofit community and its potential impact on the fiscal
health of the state.”
In Illinois, Governor Pritzker called for lower property taxes, and North Dakota Governor Burgum proposed growing the state Legacy Fund and using a portion of the earnings for property tax relief. The New York State Senate recently passed a bill calling for a study on the impact of a high concentration of tax-exempt property has on a municipality’s economic viability. The bill now moves to the Assembly
for consideration. And, a lawmaker in Idaho introduced a bill to completely eliminate property taxes and increase sales taxes to 11 percent. He admitted he doesn’t believe it will move this year, stating, “I call it a thought grenade; we threw it out there wanted to see how it went and how it works and what the problems are.”
Legislators Step In to Protect Nonprofit Advocacy Rights
Lawmakers in Hawai`i are moving legislation to protect nonprofits engaging in civil disobedience. Earlier this month the state’s Attorney General demanded access to bank records of a nonprofit that supported demonstrations in opposition to the construction of a telescope on Mauna Kea, which the state supports. As the Nonprofit Quarterly observed, the investigation encroaches on nonprofit independence to participate in nonviolent protest and free expression under the U.S. Constitution. State Senators responded by introducing legislation to prohibit the Attorney General from investigating any nonprofit because it has engaged in civil disobedience. A Senate committee passed a version limiting the application only “during a period of time in which it is clear that the attorney general’s goals are conflicted with native Hawaiian rights protected [by the state constitution] and individuals are exercising rights by nonviolent civil disobedience....”
Turning a Day at the Capitol Into a Statewide Event
Recently, the Maine Association of Nonprofits (MANP) did what many state associations of nonprofits and other groups do: convened an annual Nonprofit Day at the Capitol. The inspiring event involved nonprofits coming together in the Hall of Flags and showcasing the work and worth of Maine's diverse nonprofit community. Such person-to-person connections between nonprofit professionals and lawmakers is a proven, effective way to build relationships, understanding, and appreciation. But what of the thousands of nonprofit staff, board members, volunteers, and beneficiaries who couldn’t travel to the distant state
capitol on a cold February day? MANP had a plan for that.
Indeed, the state association of nonprofits encouraged all people associated with the work of charitable nonprofits in the state to participate through any of four actions “to celebrate and proactively raise awareness for how #NonprofitsWorkforME.”
Option #1: Show Some Profile Pride
Nonprofits throughout the state were encouraged to share data from MANP’s Adding Up Impact report, such as highlights like Maine nonprofits contribute approximately $12 billion dollars per year to the economy through wages paid, retail and wholesale purchases, and
professional services. Other data points included $4.7 billion annually in wages, which translates to approximately $271 million in personal income tax revenue, and employment of one in six Maine workers.
Option #2: Introduce Yourself
Another option was to reach out to legislators to make a virtual introduction. MANP even provided sample scripts and an instructive video to help break the ice in calls or emails.
Option #3: Share a Fun Fact
Focusing on social media, MANP invited nonprofits to share one of its infographics via social media and tag it #NonprofitsWorkForME. MANP provided several ready-to-tweet images on its Nonprofit Day webpage.
Option #4: Celebrate with Fellow Nonprofit Champions!
Finally, people were invited to drop by the post-Nonprofit Day debrief and happy hour at a local establishment. Because, after all, nonprofits are all about relationships, personal engagement, and community.
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Matters.