Nonprofits Unite for Nonpartisanship!
The law requires and the public expects charitable organizations, including houses of worship, to be nonpartisan. Despite these bedrock facts, some individuals intentionally cross the line, trying to politicize charitable nonprofits, foundations, houses of worship, and other religious organizations for their personal gain – whether for profit, for power, or both. Last week, the Washington Post exposed closed meetings of activists promoting voter suppression, harvesting of ballots, and misinformation campaigns designed to benefit candidates of one political party. See Videos show closed-door sessions of leading conservative activists. The Post asked legal experts to view hours of videotapes of the meetings, and both expressed surprise about the blatant disregard of the longstanding Johnson Amendment, which protects charitable organizations from partisan demands from donors, politicians, and other interests.
There will always be charlatans and cabals who in their quest for profits and power will try to politicize charitable nonprofits, foundations, and houses of worship. We encourage all who care about the integrity and effectiveness of the nonprofit community to be on the look-out for abusive behaviors and be prepared to speak out against efforts to sabotage the independence of our sector.
Time Is Running Out for a Pre-Election COVID Relief Deal
In the weeks since the House passed the Heroes 2 bill, negotiations between Speaker Pelosi and the Administration have proceeded in fits and starts. Those negotiations seem to be slowly edging toward agreement on some but not all of the many components of legislation needed to provide relief for individuals, nonprofits, for-profit businesses, governments, and communities. See the latest update from the Speaker. Time, however, is running out for enactment of any deal before the election. Speaker Pelosi said on Sunday that the Administration will have to finalize an agreement by Tuesday if there can be any hope of a pre-election law.
While the President has signaled his willingness to “go big” on a COVID relief package, Senate Majority Leader McConnell has made clear that Republicans in the Senate will not support a large bill. Despite or instead of the President’s professed priorities, Leader McConnell announced he will bring two bills to the Senate floor this week and dare Senate Democrats to block them. On Tuesday, he will offer a standalone measure to provide increased funding for the Paycheck Protection Program (PPP) that expired in August. The bill would also authorize a second round of PPP loans to employers
with 300 or fewer employees, but would restrict nonprofit eligibility through an arbitrary definition of nonprofit "gross receipts." On Wednesday, Leader McConnell plans to propose a bill to fund expanded unemployment benefits and provide funding for schools, COVID testing, tracing, vaccine production, and distribution. The legislation includes an expanded above-the-line charitable deduction of $600/individual and $1,200/couple for this year. Senate Democrats have not said whether they will oppose the two bills this week. Read more about the Democratic and Administration policy proposals in the COVID relief negotiations.
2020 Census Updates
Census Count Ends, Data Alterations Still Possible
Government efforts to count every person in America ended last week, two weeks earlier than previously planned, after the U.S. Supreme Court blocked a lower-court order that would have required the Census Bureau to continue field operations through the end of the month. The Census Bureau issued a statement upon completion of the count stating that “well over 99.9% of housing units have been accounted for in the 2020 Census.” Numerous groups have objected, noting the claim does not equate to collection of accurate, high quality data, or a census that is acceptably accurate. A fair, accurate, and complete count of all persons, regardless of immigration status, is necessary for proper allocation of more than $1.5 trillion in federal funding and proportional representation in Congress and redistricting operations.
Also last week, the Supreme Court agreed to hear a case regarding the exclusion of undocumented immigrants from the census count that will be sent to Congress at the end of the year. In July, the President issued a memorandum instructing the Census Bureau to subtract undocumented immigrants from the count for the purposes of congressional apportionment — the reallocation of the nation's 435 House districts every 10 years. Last month, a federal court struck down the memorandum, ruling that the President’s action violates the executive branch's "constitutional responsibility to count the whole number of persons in each State and to apportion members of the House of Representatives among the States according to their respective numbers." The matter will be heard by the Justices on November 30, with a decision likely in early January.
Census Legislative Solution
There is bipartisan opposition to the decision to stop the count. Four Republican and four Democratic Senators have sponsored the 2020 Census Deadline Extensions Act (S. 4571), a bill that would extend the count and data deadlines. Senator Schatz (D-HI) said in a tweet, “The Trump regime is trying to count fewer people, to avoid their constitutional obligation, all so they can rig the apportionment of U.S. House seats,
in an attempt to entrench minority rule for a generation. We are not done fighting on this. This is not over.” A coalition of nonprofits and civil rights groups are calling on Congress to act immediately to extend the count, providing new talking points, a new fact sheet on data processing, and a social media toolkit.
Opposition Grows Over Bias Training Executive Order
The President’s Executive Order seeking to restrain speech in employee trainings on diversity, equity, and inclusion concepts is facing near-universal condemnation from individuals and organizations affected by it. Broad coalitions of private sector employers, the civil rights community, higher education, museums, and
many others have already gone on record opposing the Executive Order on Combating Race and Sex Stereotyping. As yet undaunted, the Administration – through the Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) – issued Frequently Asked Questions (FAQs) making clear that the government believes it has the authority to “investigate claims of sex and race stereotyping pursuant to its
existing authority under Executive Order 11246, which requires contractors and subcontractors to treat employees without regard to their race or sex, among other protected bases, and requires contractors to take affirmative action to ensure such discrimination does not occur.” (Emphasis added) The Labor Department is currently drafting a Request for Information, due Oct. 22, seeking information from contractors, subcontractors, and their employees regarding trainings. Learn more by visiting the National Council of Nonprofits’ dedicated webpage on the EO and by reading How Nonprofits Can Stop Trump’s Effort to Roll Back Diversity Training.
- SNAP Restrictions Blocked: A federal judge struck down an Agriculture Department rule that would have denied Supplemental Food Assistance Program (SNAP or food stamp) aid to nearly 700,000 unemployed people. Last December, the Department finalized a series of rules, one of which revoked the discretion of states to waive work requirements in distressed economic areas. The judge had temporarily enjoined the rule in March.
- Favoritism in PPP Loans Alleged: According to a new congressional report, the Administration and many big banks failed to prioritize small businesses in underserved markets, including minority and women-owned businesses. The Select Subcommittee on the Coronavirus Crisis staff report, How the Trump Administration Neglected the Neediest Small Businesses in the PPP, asserts that (1) the Treasury Department encouraged banks to limit their Paycheck Protection Program (PPP) lending to existing customers, (2) the Small Business Administration (SBA) and Treasury failed to issue guidance prioritizing underserved
markets, and (3) many lenders processed bigger PPP loans for wealthy customers much faster than for smaller loans to the neediest small businesses. Nonprofits are not mentioned in the report. See the news release.
- PPP Loan Forgiveness: This month, the SBA released new loan forgiveness applications that streamline the forgiveness process for PPP loans of $50,000 or less. Borrowers that use the new simpler application will be exempt from any reductions in the borrower’s loan forgiveness amount based on reductions in full-time equivalent (FTE) employees or reductions in employee salary or wages that would otherwise apply. Go here to find the simpler loan forgiveness
application (SBA Form 3508S). The SBA also has made the instructions and a new Interim Final Rule on the simpler forgiveness process available online.
- Accelerating Regulatory Actions: There are currently nearly 150 proposed regulatory changes under review for completion by the end of President Trump’s term, according to the Office of Management and Budget. While all administrations rush to finalize regulations before leaving office, the current range of proposed changes is much more extensive than in the past, according to the New York Times. The Administration reportedly is limiting or avoiding requirements for public comments on some
changes and skipping sound analysis. For example, the Labor Department has expedited consideration of its independent contractor rules (see next article), Homeland Security is moving quickly to expand biometric data collection and limit immigration, and the Environmental Protection Agency is pushing through looser standards on particulates and ozone. See the complete list of pending regulations.
- Comments Due on Independent Contractor Rules: On September 25, 2020, the Department of Labor issued a proposed rule to clarify whether workers are employees or are independent contractors under the Fair Labor Standards Act (FLSA). The regulations would replace an existing multi-factor test with a two-prong test focusing on the employee’s exercise of control over their work and their opportunity for profit or loss. Employers could also consider three other factors as “additional guideposts” in assessing worker classification: the amount of skill required for a job; how permanent a working
relationship is; and whether the work is part of an integrated unit of production. This revised “economic realities” test may permit more employers – including some nonprofits – to classify their workers as contractors to avoid paying benefits and payroll taxes. The DOL is only providing 30 days to review and submit comments, which has generated letters of protest from Senate Democrats and 22 state attorneys general. The public can submit comments on this rule until October 26, 2020.
The 2020 Election Has Begun
The election has begun in earnest with more than 20 million ballots already cast. Beyond the Presidential election, 35 U.S. Senate seats, 435 U.S. House of Representative seats, eleven governorships, and thousands of state legislative seats are up for grabs in addition to races for secretary of state in seven states, attorney general in 10 states, 278 appellate court judgeships, and 29 mayorships of the country’s 100 largest cities by population. Go to Nonprofit VOTE for more information. Use the power of your voice: Vote!
Ballot Measures Span the Spectrum of Issues
The number of ballot measures to be decided this year has decreased from previous years due to the pandemic, but voters in 32 states will still decide the fate of 124 statewide measures. Many of the issues address matters of concern for nonprofits, such as civic engagement and voting, education, social justice, and taxation. Constitutional questions and bond issues in Nevada, New Mexico, and North Dakota would replace the Board of Regents, issue millions of dollars in bonds for education, and increase the number of people on the board of higher
education, respectively. In Colorado, voters will decide whether to adopt the National Popular Vote Interstate Compact, which applies the state’s electoral votes to the presidential candidate who wins the national popular vote.
Ten ballot measures in six states (California, Colorado, Florida, Louisiana, New Jersey, and Virginia) address property tax rates, exemptions, adjustments, and payments, and a ballot issue in Arkansas would continue an existing 0.5 percent sales tax that is set to expire in 2023. In California, Proposition 16
would cancel a prior ballot measure and effectively restore affirmative action programs by removing the ban on consideration of race, sex, color, ethnicity, or national original for public employment, education, or contracting. With the rise of social justice issues reaching national attention, Mississippi voters will vote on adopting a new flag after the state Legislature and Governor approved the removal of the previous state flag that included the Confederate Battle Flag. A ballot question in Rhode Island would remove “Providence
Plantations” from the official state name.
Encourage Your Nonprofit Staff to Vote
One of the easiest ways nonprofits can help promote the 2020 election is by giving staff time off to vote during Early Voting or on Election Day. Join us in the #NonprofitStaffVote campaign by offering time off to vote on or before
Election Day. No one should have to choose between their paycheck and exercising their right to vote. All nonprofits are encouraged to pledge to do this by signing up as a Nonprofit Staff VOTE partner today.
Unemployment, Rainy Day Funds Stretched Across the States
Two financial shock absorbers upon which states usually rely to get through recessions are suffering severe stress. Due to the high unemployment resulting from the pandemic, unemployment trust funds are running dry. Twenty states have sought federal loans to cover unemployment benefits costs. Federal loan requests range from $23 million in Delaware to $14 billion in California. Both for-profit businesses and some nonprofit organizations pay into these trust funds as contributing employers.
“States generally do not want to increase taxes on businesses in an economic downturn, and borrowing only pushes those increases to the future, which can make the economic recovery more difficult,” says Shelby Kerns, Executive Director of the National Association of State Budget Officers.
Concurrently, rainy day funds have been hit, draining reserves that previously sat at their highest levels going into 2020. At least 17 states have taken steps to use rainy day funds to fill budget gaps, with Nevada emptying its account and California using half of its reserves. Revenue losses are expected to be between $125 billion to $200 billion, according to a new analysis by Pew Charitable Trusts. When states use up their reserves and are forced to cut public programs to fill budget gaps,
nonprofit contracts to provide services to the public often are first on the chopping block.
Connecting Candidates to Nonprofits
When all of the candidates agree with the priorities of the nonprofit community, then the people served “win” an election regardless of which candidate gets the most votes. But without all of the tools interest groups have for influencing elections (e.g., PACs, fundraisers, endorsements), charitable organizations have to be creative and proactive to ensure the candidates understand the impact of nonprofits in their districts. It benefits everyone when candidates – who become officeholders – understand how policies affect the ability of the organizations to serve the state’s residents.
In Nebraska, the Nonprofit Association of the Midlands, the state association of nonprofits, and Coalition for a Strong Nebraska hosted a Legislative Candidate Information Session this month. The event gave legislative candidates the opportunity to
introduce themselves to the nonprofit community and to learn about the work being done and resources provided by the nonprofits in their districts.
The sponsors’ goal was sound: Create an event to educate candidates about nonprofit work, give candidates the opportunity to ask questions, and show the state’s nonprofit community to candidates for greater understanding about how they help people in their districts. The hosts made abundantly clear that neither they nor charitable nonprofits endorse or oppose candidates for public office or promote or endorse any political party.
The CT Community Nonprofit Alliance recently convened two virtual Legislative Candidate Forums – one each for candidates to the state Legislature from the Hartford and New Haven areas. The events were billed not as debates, but as
opportunities for candidates from all political parties to introduce themselves to their local nonprofits. An added benefit of the forums is that it gave CT Alliance members a way to encourage their local legislative candidates to complete a Legislative Candidate Questionnaire, which then helps all voters understand the perspectives of individual candidates.
The CT Alliance also encourages nonprofits to host their own virtual candidate forum, which they explain “is an excellent way for candidates to hear about issues that impact your organization directly from their constituents.” The state association of nonprofits also identifies innovative formats to make the events even more interesting:
- An "equal time Q&A" features a moderator and/or a panel asking the same questions to candidates, allowing equal time for responses. The candidates should be briefed on the content, even if they do not receive questions in advance.
- A "town hall" allows the audience to ask questions. Questions should first be screened by a moderator to avoid partisan questions and to facilitate substantive dialogue.
- "Candi-dating" is speed dating for candidates and voters. It allows each person to meet with the candidates and ask their own questions in a (virtual) breakout room. All participating candidates rotate through all the breakout rooms for the same amount of time.
As long as charitable nonprofits stay nonpartisan, the opportunities for candidate engagement and education are wide open. And the benefits to nonprofits, the people served, communities, the candidates, and democracy are immense.
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Matters.