Join in Today’s Special Day of Action by Calling on Congress for Nonprofit Relief
Today, September 20, join with nonprofit leaders from across the country in calling on Congress to provide urgently needed relief to help nonprofits serve their communities. The broad national coalition of nonprofit organizations spanning all segments of the charitable community has dedicated today as a special Day of Action for all nonprofits to demand that Congress include relief for charities (#Relief4Charities) in key legislation, most notably the budget reconciliation bill, appropriation measures, and year-end tax legislation.
We urge you to contact your Senators and Representative via social media, email, and telephone urging them to support extending the Employee Retention Tax Credit, supporting nonprofit jobs, and encouraging charitable giving.
Learn more and TAKE ACTION!
It’s Congressional Crunch Time
Some of the most consequential decisions that every Congress must make are coming due in the next ten days. The House is scheduled this week to vote on a measure to suspend the debt limit, the law that caps federal borrowing and that without action could lead to a government shutdown. Also this week, Democratic leaders will attempt to take up a continuing resolution, a stopgap measure designed to keep the government funded past the September 30 fiscal year end. The “CR” is expected to be linked to supplemental funding for disaster relief and Afghan evacuee resettlement. Republicans have been adamant that they will not vote to suspend the debt limit and strenuously oppose tying that measure to the spending bill.
The House is also expected to take up by September 27 the bipartisan Infrastructure Investment and Jobs Act, H.R. 3684, that passed the Senate in August. Although the substance of the bill has solid support, Speaker Pelosi has been reluctant to enact the $1.2 trillion bill out of concern that it would remove pressure to pass the $3.5 trillion budget reconciliation bill currently being negotiated (see below article). Adding to the September workload, the House is also expected to consider the National Defense Authorization Act, the Women’s Health Protection Act (which would guarantee a right to abortion), and a cost-of-living adjustment for veterans.
Budget Reconciliation Update
Over the past two weeks, several House committees met to produce legislative language on issues within their jurisdiction for inclusion in the budget reconciliation bill. For instance, the House Education and Labor Committee bill addresses free pre-K and community college, school nutrition programs, and job training programs. The Energy and Commerce provisions seek to upgrade the Affordable Care Act, expand Medicare to cover hearing, vision, and dental care, among other things. The Financial Services Committee approved legislation to expand housing and homelessness programs, and the Ways and Means Committee adopted nearly $2 trillion in tax hikes to cover some of the costs of the budget reconciliation bill and implement other policies (see next article). At this stage, the status and content of the committee-approved measures are in limbo awaiting the results of negotiations by House and Senate Democratic leaders. Since no final decisions have been made on any of the components, charitable nonprofits have the opportunity to improve the outcomes through advocacy.
House Tax Bill: What’s Important for Nonprofits
Last week, the House Ways & Means Committee adopted its portions of the multi-trillion dollar Democratic budget reconciliation proposal. Although nonprofits don’t generally pay income taxes, changes in the tax code as proposed in the bill could significantly impact the work of charitable organizations and charitable giving in various ways. Highlights of provisions of interest to nonprofits include:
Why do these proposals matter to nonprofits?
Increases in social support programs, such as child tax credits and the earned income tax credit, could continue to ease child nutrition and family poverty, and thereby reduce demands on nonprofit resources. In general, higher tax rates often provide an incentive for high-income taxpayers to increase charitable contributions. Similarly, increases in capital gains rates provide more of an incentive for donors to use appreciated assets to fund such contributions. Significant changes in estate tax provisions and potential changes in the treatment of inherited appreciated assets will also provide nonprofits with opportunities to talk to key donors about the timing and size of contributions.
- Tax hikes on higher-income individuals, including an increased top tax rate for individuals, increased rates on capital gains and dividends, and a 3% surtax on the highest-income individuals.
- Tightened estate and gift tax provisions by reducing the exemption amount and limiting certain trust and valuation discount provisions.
- Strengthening of retirement security by requiring most employers without sponsored retirement programs to automatically enroll their employees in individual retirement accounts or 401(k)-type plans (Subtitle B).
- Extension of the Child Tax Credit and Earned Income Tax Credit expansions enacted earlier this year (see blog post for a nonprofit perspective).
- Paid Family and Medical Leave of up to 12 weeks and supports for child care facilities and workers (Subtitle A and Subtitle C).
- Other provisions such as a phaseout of the investment income excise tax on large endowments of private colleges and universities that provide a prescribed level of financial aid, further restrictions on conservation easement deductions, and technology improvements to aid IRS audits of high-wealth individuals.
What’s Not Included: The bill does not include several tax provisions that likely would have changed the giving practices of individual donors, albeit in different ways. For instance, the current draft of the tax bill does not include a concept promoted last year by then-candidate Biden to limit the value of itemized deductions. It also omits an adjustment found in the President’s Build Back Better plan that would have revoked the principle of “stepped up basis” that permits heirs to adjust the value of appreciated assets and avoid capital gains tax on inheritance. Finally, the current draft does not propose changing the cap on state and local taxes (SALT) imposed in the 2017 tax law that limits the annual itemized deduction for state and local taxes to $10,0000.
President Issues Vaccination and Testing Mandates
On September 9, President Biden announced a comprehensive plan to combat COVID-19 mandating vaccinations and testing for large segments of the U.S. workforce. The announcement has generated many questions about which nonprofit employers are affected and what the mandates mean. Not all the details have been worked out; here’s what is known so far and where to look for future guidance:
- Vaccination Mandate and Testing Alternative for Larger Employers: The Occupational Safety and Health Administration (OSHA) is charged with developing an Emergency Temporary Standard that will require all employers with 100 or more employees to ensure their workforce is fully vaccinated or require any workers who remain unvaccinated to produce a negative test result on at least a weekly basis before coming to work. There are many open questions, including how employees will be defined (full-time equivalents or part-time workers too) and who is responsible for paying for the weekly testing?
- Vaccination Mandate for Government Contractors: The Executive Order on Ensuring Adequate COVID Safety Protocols for Federal Contractors issued on September 9 extends the vaccination mandate for federal employees to all employees of government contractors, but expressly exempts grants. The Order also gives the Safer Federal Workforce Task Force until September 24 to provide definitions for such terms as contractor and subcontractor.
- Vaccination Mandate for Health Care Workers: The Centers for Medicare & Medicaid Services (CMS) will be writing the rules governing the President’s vaccination mandate for “workers in most health care settings that receive Medicare or Medicaid reimbursement, including but not limited to hospitals, dialysis facilities, ambulatory surgical settings, and home health agencies.” These rules will build on recent CMS rules for nursing facilities and will “cover a majority of health care workers across the country,” including “volunteers, and staff who are not involved in direct patient, resident, or client care.”
Read more of the details on the new mandates in the National Council of Nonprofits article recent article, Vaccine Mandates and Your Nonprofit.
- Nonprofit Job Growth Falters: Nonprofits added only 42,000 jobs in August, reflecting the nationwide slowdown in job growth due to economic effects of the Delta variant of the coronavirus. New data from the Center for Civil Society Studies at Johns Hopkins University find that the majority of the restored nonprofit jobs (28,500) occurred at educational institutions ahead of the new school year. Religious and arts organizations saw modest gains, while health care nonprofits showed a small decline in jobs. While overall there was a slight improvement in nonprofit employment in August, the sector still has not recovered from the pandemic, with nearly 565,000 jobs still lost since February 2020.
- IRS Guidance Plan: The IRS issued its 2021-2022 Priority Guidance Plan outlining regulatory actions and guidance the tax agency is contemplating in the coming months. Regarding tax exempt organizations, the IRS plans to issue guidance on group exemption letters, finalize long-delayed regulations on Sec. 509(a)(3) supporting organizations, consider regulations regarding allocation of expenses in calculating unrelated business taxable income (UBTI), and issue rules governing excise taxes imposed on donor advised funds. In its Priority Guidance Plan, the IRS did not commit to taking action on several nonprofit priorities: Revocation and revision of the IRS Form 1023-EZ; calculation of “gross receipts” for nonprofits for purposes of qualifying for the Employee Retention Tax Credit; and clarification of how nonprofits are to report revenues from government grants and contracts on their Form 990s.
- Public Comments on Public Service Loan Forgiveness: The U.S. Department of Education is inviting public comments on Strengthening the Public Service Loan Forgiveness (PSLF) Program for people working in public service – including at charitable nonprofits – to offer input. The announcement recognizes that the program has not lived up to expectations, acknowledging that “for too many public service workers, the program has not functioned the way they hoped it would.” The National Council of Nonprofits previously submitted comments on barriers that must be removed to promote and ensure forgiveness after program participants meet the requirements for PSLF. Individuals and nonprofits are encouraged to submit their own public comments by September 24; the more people and groups that submit separate comments, the better.
Spending ARPA Funds
County and City Commissioners Take Lead
Nearly all of the ARPA State and Local Fiscal Recovery Funds, accounting for $240 billion, have been distributed to state, territorial, local, and Tribal governments in the past six months, according to a new report by the U.S. Treasury. Localities have been the most active in allocating their funds. In New Hampshire, the County of Cheshire issued a Notice of Funding Opportunity “to provide assistance to help nonprofits impacted by COVID-19.” Grants from $1,000 to $20,000 will be approved for eligible nonprofits to “reimburse the costs of operational interruptions caused by required closure” due to the pandemic. Commissioners in Camden County, New Jersey approved $8 million for grants of up to $50,000 to nonprofits serving vulnerable and at-need populations or providing on-demand pandemic-focused services. Similarly, officials in Franklin County, Ohio have allocated $5 million for grants of up to $50,000 for nonprofits serving lower-income households and up to $25,000 for other nonprofit organizations.
City officials in Colorado, Delaware, Maryland, and North Carolina have all included nonprofits in their allocations of ARPA funding. Denver extended the Nonprofit Emergency Relief Fund, created last year under the CARES Act, and has added $485,000 from ARPA funds for nonprofit grants of up to $15,000. Baltimore Mayor Scott announced nonprofits may apply for some of the city’s $641 million allocation with a focus on community-based violence reduction, recovery, and equity. The City of Wilmington is setting aside $700,000 for grants to nonprofit organizations, including $200,000 reserved for arts groups. “Like everyone, nonprofits have been challenged throughout the pandemic, but they have also been one of our greatest resources,” Mayor Bill Saffo stated in a city press release, “[Nonprofits] have been and continue to be on the frontlines and on the ground helping our community recover and become more resilient.” Asheville, NC officials approved eleven categories to distribute its $7.3 million of ARPA monies, including some nonprofit priorities: affordable housing, care for aging residents, community communication, domestic violence prevention, food systems, homelessness, workforce development, and climate change.
2021 Session Recap: Charitable Gaming and Games of Chance
The pandemic-induced cancellation of nonprofit fundraising events appears to have inspired lawmakers in 2021 to consider relaxing rules or expanding fundraising opportunities. For instance, legislators in Maine and New Jersey approved online raffle and ticket sales; voters in the Garden State will also consider a proposal for a constitutional amendment at the next general election to allow that proceeds from games of chance be used to support the group organizing the game or raffle. New Hampshire lawmakers relaxed the requirement of how often a member of the sponsoring charitable organization must be present during the fundraising game of chance and established a new commission to study charitable gaming. A measure pending in North Carolina would exempt nonprofits from collecting and remitting sales tax on the ticket price or admission fees at most fundraising events.
A newly introduced bill in Michigan would waive the $50 per day license fee for charitable gaming events like casino nights, sometimes called “millionaire parties.” The measure would also increase the number of licenses permitted per year through 2023 and raise the “imitation money” limit from $20,000 to $30,000. “With donations cut in half, many of Michigan’s nonprofits find themselves in dire need of financial assistance to stay afloat,” said Michigan Nonprofit Association Vice President Kelly Kuhn. “What’s at stake is not only the services and supports nonprofits provide to the residents in their communities,” Kuhn explained, “but also the jobs they create for Michiganders.”
In Focus: Redistricting and Nonprofits
Redistricting has begun in earnest across the country with various groups, mostly determined by the partisan makeup of the state legislatures, vying for power to determine the boundary lines for state legislative and congressional districts. Adjustments to the lines through gerrymandered districts can give the political party in control of drawing the lines the ability to influence election outcomes. Some states have implemented less partisan or nonpartisan redistricting commissions, while others hold public hearings, invite residents to draw maps, or are required to consider maps drawn and submitted by the public. Ultimately, the outcome of redistricting decisions can affect the influence of charitable nonprofits. As David Heinen at the North Carolina Center for Nonprofits explains, “Pragmatically, gerrymandering means that most elected officials listen more closely to their partisan political donors than to the constituents whom they ostensibly represent. Since 501(c)(3) nonprofits are the voices of their communities but are not (and should not be) political donors, gerrymandering significantly reduces nonprofits' influence on public policy.”
Making a Day of Action a Day of Reckoning
Today, September 20, 2021, is the Day of Action for the #Relief4Charities agenda, a specific set of policy asks to address the immediate needs of charitable nonprofits as they provide pandemic relief and recovery. But what is a “Day of Action,” and can it actually make a difference? The first question is easy enough to explain; the second one depends on whether you, your colleagues, and nonprofits across the country help make some noise. Here are some general thoughts and specific tips for making the day a Day of Reckoning.
Pre-COVID, a day of action usually meant people flying into Washington to fan out and meet with as many lawmakers and staff as possible, supported by thousands of phone calls to congressional offices generated by people back home. Right now, those activities aren’t available since most congressional offices are still closed to the public and switchboards often go to voicemail. So now advocacy, like most things during the pandemic, has gone virtual. The keys are to get the messages in front of the lawmakers and to make sure they know that “the whole world is watching.” Or at least that a large number of their constituents who are nonprofit professionals, board members, volunteers, donors, and clients in their state/district are paying attention to what they do.
The #Relief4Charities coalition developed a toolkit filled with key messages and sample social media posts to deliver today. Some social media graphics are also available for you to use – or inspire graphics of your own. The point of delivering consistent messages is for politicians to see that many nonprofit people from many disparate sectors of the community all share the same policy priorities. Ignoring the will of constituents can be risky; ignoring the views of a broad cross section of the community can be career ending. Or at least that’s the mindset that the Day of Action is counting on.
Tagging the Key Messages
Social media messages are most effective when addressed to individual lawmakers. That means “tagging” Senators and Representatives by placing the @ symbol directly in front of the target’s user name. Where do you find their user names? This site can get you to the twitter handles for the current Senators and Representatives. Another good source is Tweet Congress. And, to ensure your message is connected to the larger effort, be sure to include the hashtag #Relief4Charities.
The main nonprofit message is summarized in this simple tweet.
We urge Congress to pass #Relief4Charities provisions, including supporting nonprofit jobs, extending the Employee Retention Tax Credit, and encouraging charitable giving! These resources will enable nonprofits to meet community needs as we recover from the pandemic. https://bit.ly/relief4charities
Consider modifying the text to include your organization’s name and a reference to your state. You can also lead with this text as your first message, and then follow up with more details about how any one of the policy goals – jobs, ERTC, charitable giving incentive – would affect your organization.
Note, multiple tweets over the course of the day are part of the strategy. Please post multiple times throughout the day and help amplify the campaign by retweeting others. So have at it, be creative, and help turn this Day of Action into a Day of Reckoning. For the public good.
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Updates.