Join the 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.
The Public Policy Responses to the Coronavirus Outbreak
The swift rise in the numbers of Americans infected by and dying from the novel coronavirus disease, and the equally swift and deep decline in the stock market, are prompting actions at the highest levels of government. Last week, Congress passed and the President signed a $8.3 billion emergency spending plan that will fund pharmaceuticals, masks, protective equipment, and other medical supplies for state and local health officials, as well as provide resources for community health centers. Concerned about the impact of the potential pandemic on the economy, the Federal Reserve reduced interest rates by half a percentage point. The Administration is discussing a temporary payroll tax cut and may seek to prioritize infrastructure funding.
At the state and local levels, public health officials are in the forefront of the response, closing schools and businesses, limiting public events, and addressing immediate and anticipated health emergencies. States of emergency have been declared in California, Florida, Hawai`i, Maryland, New York, and Washington State, granting public officials extraordinary powers. Washington Governor Inslee, whose state is at the epicenter of the outbreak in this country, is using emergency powers to secure access to “all resources necessary” and cut red tape. Oregon Governor Brown is requesting that the federal government provide “flexibility” under federal guidelines, additional medical supplies, and federal funding to offset the estimated $7 million to $10 million per month increased costs. Utah’s Governor has taken tax cuts off the table for now to ensure the state has resources available to address increased public health and economic concerns. For their part, many state legislatures are taking action. Lawmakers in New York quickly granted the Governor new powers and appropriated an additional $40 million for its Department of Health, while lawmakers in California, Hawai`i, and Maryland are considering emergency funding of $20 million, $10 million, and $10 million, respectively. The Utah Legislature is considering setting aside $57 million for increased demand on Medicaid during the crisis, while also declaring the State Capitol a “Handshake-Free Zone.”
- Charitable Giving Decreases: Data released by the U.S. Treasury Department last week indicate a $3.4 billion drop in contributions to charitable nonprofits, from $268.9 billion to $265.5 billion, between 2017 and 2018. "This drop in giving has real impact on the ability of all sorts of charities to help people and improve communities across the U.S.," said Steve Taylor of United Way Worldwide. Rick Cohen of the National Council of Nonprofits explained further, “A reduction in overall dollars is even worse when you factor in inflation. And this was just the first year under the tax law, when many individuals didn’t know how it would affect them yet.” TAKE ACTION: Nonprofits are encouraged to sign onto a letter from the Charitable Giving Coalition urging Congress to support a universal charitable deduction.
- Drawing a Line between Charitable Nonprofits and PACs: A nonprofit hospital system would engage in impermissible political activity if its for-profit subsidiary created a political action committee (PAC) that solicited funds from hospital employees, according to an IRS private letter ruling. Charitable nonprofits must remain nonpartisan and cannot engage in partisan electioneering, but may create affiliated 501(c)(4) social welfare organizations that are permitted to engage in partisan election-related activities. The ruling may raise concerns for other complex nonprofit structures and the relationships between 501(c)(3) and 501(c)(4)s.
- Another Medicaid Work Requirement Blocked: A federal judge struck down work requirements for Medicaid beneficiaries in Michigan, a month after an appeals court blocked similar restrictions in Arkansas. More than 80,000 recipients were expected to lose their benefits under the rule that would have required able-bodied adults ages 19 to 61 to work, go to school, or engage in job training, an internship, treatment, or community service for at least 80 hours per month.
Controversy Continues in Proposed For-Profit Conversion of .org Registry
As opposition to the sale of Public Interest Registry, the nonprofit that runs the .org domain registry, continues to grow, Ethos Capital has published a list of purported concessions in an attempt to lessen concerns expressed by the nonprofit community. The private equity firm is promising to cap rate hikes at 10 percent per year for seven more years (still taking more than $450 million away from charitable work over the next several years) and establish a stewardship council with a very narrow purview, which it would appoint and could easily ignore, to supposedly look out for the interests of .org domain users. The response of the nonprofit community has been more than skeptical. "These aren’t solutions to the issues raised by the global nonprofit community. They are misdirection and sleight of hand,” said Rick Cohen, Chief Operating Officer of the National Council of Nonprofits in the Chronicle of Philanthropy (paywall). The changes announced by Ethos "do not provide the protections and security that the community has been asking for over the last three months," added Amy Sample Ward, CEO of NTEN. The deadline for approval of the sale by ICANN, the “regulating” body, has been extended to March 20. The public may submit comments on the Public Interest Commitment engagement process and stewardship council on Ethos Capital’s website through Mar. 13.
Take Action: Fill Out the 2020 Census
It’s time to spread the word about the need for everyone to fill out the 2020 Census questionnaire. Funding for everyday things in your community – from health clinics to fire departments and school lunches to roads – depend on a fair, accurate, and complete count. Videos are available in more than a dozen languages including Khmer, American Sign Language, Romanian, Punjabi, Lao, and more! Additional help is available at Mobile Questionnaire Assistance Centers where census workers will be available to help fill out the form and answer questions, including instructions in 59 non-English languages. Personal census data are completely private and by law cannot be shared with anyone – including immigration and law enforcement agencies. Census workers must sign an oath to maintain confidentiality or face a $250,000 fine and/or prison time. A new Trust & Safety Team has been established to prevent the spread of fake, misleading, and inaccurate information, and further steps are being taken to fight any potential hacking and cybersecurity threats. So, spread the word to all board members, staff, volunteers, partner organizations, and everyone you serve to get counted.
- U.S. Census 2020 Resources, National Council of Nonprofits
- Census Resource Library, Census Counts Coalition
- State-by-State Resource Map, Census Counts Coalition
- Video Guide to Completing the 2020 Census Online (9:25), U.S. Census Bureau
- 2020 Census Jobs, U.S. Census Bureau
- 2020 Census Resources and Legislation, National Conference of State Legislatures
- Census 2020: Nonprofits CAN Shape the Future, Nonprofit Vote
- U.S. Census 2020, Feeding America
- Census Protection Hotline Partner Toolkit, Lawyer's Committee for Civil Rights Under Law
- 2020 Census Toolkits for 211s, Local United Ways, & Partners, United Way Worldwide
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
Divergent Views on Donor Disclosures
Across the country, policymakers, nonprofits, and foundations have diverse views on if and when the names of donors should be disclosed – whether publicly, just privately to government officials, or not at all. In New York, most people appear to be united in opposition to language in the Governor’s budget that seeks to require charitable nonprofits that have gross revenues exceeding $250,000 to identify and make public the names of all donors who provide $5,000 or more, or 2 percent of the charity's total donations. The Governor reportedly is concerned that some charitable nonprofits might be shifting money to social welfare 501(c)(4) organizations for partisan and lobbying activities. More than 130 organizations have signed onto the Memorandum in Opposition to the proposal.
A different issue is the subject of legislation in Oklahoma and Utah: whether state law enforcement officials should be able to require nonprofits to submit – on a confidential basis – their unredacted Form 990 Schedule Bs that are prepared and filed with the IRS. The Utah version of a donor disclosure bill generally restricts demands from governments for the names of nonprofit members and donors, but retains the power of tax enforcers in the state to require and retain donor information. An Oklahoma bill would prevent state and local governments from requiring disclosures of donors to any type of 501(c) organizations, whether charitable or noncharitable. The legality of whether states may mandate disclosures to law enforcement has been submitted for review before the U.S. Supreme Court. Lower courts ruled that the California Attorney General could require that all nonprofits regularly submit their unredacted Schedule Bs. A decision on whether the Court will hear the cases - Thomas More Law Center v. Becerra and Americans for Prosperity Foundation v. Becerra – could come by this summer.
Taxes, Fees, PILOTs
A recurring series on efforts to restrict or protect nonprofit tax exemptions, presented as a warning and guide for nonprofits throughout the country:
- Property Tax: A bill in the Minnesota House would expressly authorize municipal governments to impose street maintenance fees on all landowners, including nonprofits, in a municipal street improvement district. New fee proposals would require a public hearing and could last for only 20 years. The state Supreme Court ruled in 2016 that cities did not have the statutory authority to impose such maintenance fees.
- Property Tax: A local school district in Pennsylvania is challenging a decision by the county’s Board of Assessment that a large nonprofit hospital network qualifies for property tax exemption under Pennsylvania law. The school district argues that nonprofit hospitals must meet five criteria to qualify as a “purely public charity” eligible to receive the tax benefit: advance a charitable purpose, donate or render gratuitously a substantial portion of its services, benefit a substantial and indefinite class of persons, relieve government burden, and operate entirely free from profit. “We believe the health network fulfills its charitable mission including improving health care, advancing medical science and providing education,” said Brian Downs, spokesperson for the hospital system. The school is seeking $5 million in property taxes.
- PILOTs: The City of Meadville, Pennsylvania is considering myriad options, including demanding payments in lieu of taxes (PILOTs) on nonprofits, to fill a $650,000 budget gap for fiscal year 2021. Charitable nonprofits are exempt from paying property taxes under the state constitution, but Deputy Mayor Larry McKnight has suggested increasing PILOT requests from the local college and medical center, which both paid the City $75,000 in 2020.
Government Grants Reforms Update
Maryland is moving forward with significant grants reforms that, when completed, will very closely align state rules with the OMB Uniform Guidance, including the mandates to pay nonprofits their indirect costs. The legislation would establish the Maryland Efficient Grant Application Council to monitor, report, and make recommendations on state grants life cycles, applications, and recipients. It calls for nonprofit input, would require regulations on a uniform grant application form, financial controls and reporting requirements, and performance progress reporting requirements that are consistent with the OMB Uniform Guidance to the greatest extent practicable. The Senate version of the bill has 46 of the state’s 47 Senators as cosponsors.
The Nonprofit Community Confronts the Coronavirus
A community’s character is on display when a crisis hits. The threat of a coronavirus pandemic is causing some in our society to panic, hoard, and price gouge. But in the nonprofit community, the emerging crisis is demonstrating humanity's finer instincts.
Here are some of the actions we’ve seen so far.
Getting trusted information out
State associations of nonprofits across our nationwide network have been exchanging information they’re discovering about the fast-moving novel disease. After curating the best information about appropriate actions, they’re each tailoring the information and ideas specifically for nonprofits in their states, including information from their own state and local health officials when possible. The network’s quick response to this unfolding crisis reinforces the power of networks, which enable a much broader reach of eyes, ears, and minds to gather and analyze data, while also offering the ability to customize information so it addresses local needs. Plus, the most effective communications come from trusted partners who are committed to facts, science, and safety. To illustrate, here’s just a sampling of materials prepared by state associations of nonprofits in Alaska, Colorado, Delaware, Florida, Idaho, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Montana, New Jersey, New Mexico, New York City, North Carolina, Oregon, Vermont, and Washington State.
Dealing with the day to day
Beyond following and encouraging standard advice like washing hands properly, nonprofits have to make judgment calls. When do you cancel gatherings, send staff home, or gain confidence that you are doing all you can to keep people safe while continuing to advance missions in communities? Last week, the Center for Disaster Philanthropy convened a national webinar to answer a pressing question, what should philanthropy be doing now to address needs during the crisis? The key takeaway for many was the advice for foundations and donors to support frontline nonprofits that are tending to the people needing medical care, suffering from lost work, shut in for unknown durations. Washington Nonprofits, operating in the epicenter of the outbreak in this country, is conducting two new webinars this week regarding Resilient Fundraising Strategies and Alternatives to Meeting in Person to provide answers to day to day questions.
At a time when the worst of human nature can emerge, it’s reassuring that nonprofits step up and speak out to demand that everyone treats everyone with respect and dignity. This message from Nonprofit New York is eloquent in its dual message of encouragement of civility and admonishment of racism: “Concerns about Coronavirus should focus on the facts and ensuring the safety of our families, colleagues, and communities. Coronavirus is not an excuse for racism and xenophobia. We urge you to be kind to one another always, but especially as we make sense of how this outbreak will impact our work and our lives.”
“Be Kind,” indeed. And keep demonstrating the character of the nonprofit community by serving the public good. As we are all committed to doing every day.
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Matters.