Welcome to the Nonprofit Champion, our biweekly public policy newsletter. This email format provides brief digests to help readers quickly access information you need. For more details about a specific item, see the full newsletter posted online Nonprofit Champion | October 16, 2023.

Top of the News

Almost two weeks ago, the House fired Speaker McCarthy and has yet to elect a new Speaker, leaving that chamber unable to take action. In the meantime, war broke out in the Middle East and continues to ravage Ukraine, while here in the U.S. health and child care supports have ceased for millions of people. And the flood of immigrants has only gotten worse, imposing extreme stress on charitable organizations providing relief and on cities receiving tens of thousands of new residents. Regardless of who the House decides will serve as Speaker, the historic disruptions to “regular order” will hinder effective policymaking for the rest of the year, and perhaps beyond. [Read more]

• Why It Matters: The dysfunction in Congress means that the people nonprofits serve will continue to be hurt and denied critical services that improve lives and communities.

At a time when partisanship is at its highest and expectations from Congress at their lowest, the ability to achieve bipartisanship on three issues important to charitable nonprofits is emerging as a storyline worth highlighting. One bill introduced in the House, the Streamlining Federal Grants Act (S. 2286/H.R. 5934), seeks to improve the effectiveness and performance of federal grants and cooperative agreements, simplify the application and reporting requirements, and facilitate greater coordination among federal agencies responsible for delivering services to the public. A second measure recently introduced in the Senate, the Volunteer Driver Tax Appreciation Act (S. 3020/H.R. 3032), would increase the charitable mileage rate for nonprofit volunteer drivers and eliminate taxation of mileage reimbursements up to the business rate. Finally, the John R. Lewis Voting Rights Advancement Act (H.R. 14) would establish new criteria for protecting voting rights, particularly in areas with a history of official voting discrimination. [Read more]

• Why It Matters: These newly introduced bills, if enacted, would provide real relief to charitable organizations, the people who support them, and the people they serve.

In the coming months, federal officials will be making decisions on the rules governing nonprofit pay practices, improving access to federal and pass-through grants, and more. The U.S. Department of Labor is proposing to modify the overtime rules to expand the number of employees who receive time and a half pay for working more than 40 hours in a week. Under consideration are proposals to raise the minimum salary threshold to $55,000 per year or higher and implement an automatic process for future increases. Public comments due Nov. 7. Separately, the Office of Management and Budget is proposing significant changes to the rules governing federal grantmaking that would correct longstanding challenges that have limited nonprofit effectiveness, discouraged qualified organizations from seeking federally funded grants, and wasted billions of dollars and countless hours in jumping through needlessly complex reporting requirements. Public comments due Dec. 4. [Read more]

• Why It Matters: How well government officials tailor regulations to address the realities of nonprofit operations depends on input from individual charitable nonprofits from different parts of the country telling their stories with data and other details. It is essential that nonprofits review the proposed rules and submit public comments.

Federal pandemic relief for child care ended on September 30, leaving many child care providers and parents around the country concerned about the impact on costs and accessibility. Nonprofit providers throughout the country are pointing to the negative effects, while some states – including California, Minnesota, and Nebraska – have taken action to minimize the effects or to expand funding. [Read more]

• Why It Matters: The lack of adequate child care is a key cause of the nonprofit workforce shortage. Greater stresses on the affordability and availability of child care will likely lead to more vacancies at nonprofit, as well as for-profit and governmental, workplaces as parents leave their jobs to care for their children.

Federal News

FastView 

• Protecting student loan borrowers from scammers: Student loan payments resumed this month, and many borrowers are making a payment for the first time. The Chair of the House Education and the Workforce Committee sent a letter to the Education Department raising concerns about the vulnerability of borrowers during this period to scam artists. [Read more]
• Calculating Unemployment Insurance Fraud: Fraudulent claims for unemployment benefits of between $100 billion and $135 billion were improperly paid during the pandemic, according to a new report by the Government Accountability Office. [Read more]
• Scrutinizing the Form 1023-EZ: The publication Law360 conducted a detailed analysis of the short form used by the IRS to ease its administrative burden but at the high cost of exposing the public and the charitable sector to profound risks. [Read more]
• Measuring Arts Impact: Nonprofit arts and culture organizations and their audiences generated $151.7 billion in economic activity in 2022 — $73.3 billion in spending by the organizations, which leveraged an additional $78.4 billion in event-related spending by their audiences – according to a new report from Americans for the Arts. [Read more]

State & Local News

Since before the depths of the pandemic, charitable nonprofits have been advocating for reforms to outdated and complex government grantmaking and contracting practices and procedures that impose unnecessary costs, permit late and inadequate payments to nonprofits, and result in barriers that prevent organizations from applying for and performing under agreements to provide services. States are now adopting and/or carefully evaluating the impact of poor rules and regulations on nonprofits and the people they serve.

• Advance Payment: This month, California enacted legislation authorizing state agencies to provide advance payment of up to 25% of the total amount of a grant or contract to nonprofits that meet certain minimum requirements. It also calls for prioritizing recipients and projects serving disadvantaged, low-income, and under-resourced communities. [Read more]
• Grants Modernization Task Force: The Governor of Oregon has appointed nine nonprofit members to the 15-member legislative Task Force on Grant Making and Contracting, a panel created to address a long list of challenges that nonprofits face in providing services on behalf of the state. Topics include developing recommendations for improving wages for employees of nonprofit organizations, uniform application procedures and standard contracting language, multi-year contract terms, and payment models that prioritize full-cost recovery. [Read more]

Local Opportunities for Nonprofits. The GAO report also found that local governments have only spent 38% of their allotted funds. Investments in charitable nonprofits continue to be announced, providing examples for nonprofits and governments to consider and propose in their own communities.

• The City of Lowell, Massachusetts, announced another round of ARPA funding that allocates nearly $1 million for local nonprofits and artists.
• On October 11, the Tulsa, Oklahoma, City Council approved more than $6.9 million in ARPA funds to distribute to nonprofits in the city.
• The High Point, North Carolina, City Council Finance committee is reviewing 58 applications to distribute ARPA funds in projects and it is considering “advancing some of the funds to organizations,” which is encouraged given that many nonprofits cannot afford to wait for a reimbursement.

[Read more]

Twelve states have enacted data privacy legislation, so far. Laws in Connecticut, Colorado, Virginia, and Utah go into effect this year; of those, only Colorado includes nonprofits under compliance requirements.  Indiana, Iowa, Montana, and Texas become effective next year. The laws determine how consumers’ data may be used, collected, and shared. For-profit companies and others collecting data may be required to delete, correct, or protect certain data if asked for by the consumer. Last week, California Governor Newsom signed the Delete Act (S.B. 362) to create a one-stop shop for individuals to delete personal data and also impose disclosure and registration requirements on any data broker “that knowingly collects and sells to third parties the personal information.” [Read more]

Read the full newsletter for additional quotes, research, Numbers in the News, and upcoming advocacy events to put the news in greater context and help you frame the debate.

Nonprofit Library

On Arts Impact

• Arts & Economic Prosperity 6, Americans for the Arts, Oct. 12, 2023.

On Charitable Giving Incentives

• Charitable giving incentives empower working families, strengthen nonprofits, Kelley Kuhn, Kyle Caldwell, and Phil Knight, Crain’s Detroit Business, Oct. 11, 2023.

On the Child Care Crisis

• ‘We Could Start To Move The Needle’: Iowa Offers Model for Fixing Mass. Child-Care Crisis, Samantha J. Gross, Boston Globe, Oct. 14, 2023.
• Video: Nonprofit Workforce Development Panel – Childcare (1:16:42), Pennsylvania Association of Nonprofit Organizations, Oct. 10, 2023.
• States are trying to prop up the child care industry. It isn’t enough., Robbie Sequeira, Stateline, Oct. 9, 2023.
• Child Care Is a National Emergency, Elizabeth Barajas-Moman and Shannon Rudisill, Nonprofit Quarterly, Sept. 19, 2023.

On Federal Grants Reform Regulations

• Legislation
  • The Streamlining Federal Grants Act (S. 2286/H.R. 5934) and the Benefits to Charitable Nonprofits, National Council of Nonprofits, updated Oct. 12, 2023.
• Regulations
  • Notice of Proposed Guidance for Grants and Agreements, Federal Register, Vol. 88, No. 192, p. 69466, (Gov), published Oct. 5, 2023.
  • Significant Improvements to Federal Grants Rules Proposed, Analysis by the National Council of Nonprofits, Oct. 5, 2023.
  • Pending federal grants reforms could make life easier for nonprofits, Nonprofit Essentials, Oct. 11, 2023.
  • Feds Propose Improvements to Grants Rules, The NonProfit Times, Oct. 9, 2023.

On nonprofit workforce shortages

• Never Ending Battle: No end in sight for pandemic pain, worker shortages, Paul Clolery, The NonProfit Times, October 2023.

On the Overtime Proposed Rule

• Evaluating the Labor Department’s Overtime Proposed Rule, National Council of Nonprofits, Oct. 2, 2023.
• New Overtime Rules May Affect Nonprofits, Linda J. Rosenthal, For Purpose Law Group, Oct. 2, 2023.
• More on the Proposed Overtime Regulations, Linda J. Rosenthal, For Purpose Law Group, Oct. 5, 2023.

Advocacy in Action

Advocacy is the art of advancing policy priorities through the appropriate policymakers in the appropriate forum using the appropriate tools in the advocacy toolbox. Certainly, competition between opposing sides on an issue (for example, being for or against a specific piece of legislation) is one tool in certain situations. But advocacy does not necessarily mean adversarial. Other situations may call for use of different powerful tools, such as collaboration and community engagement. Or, for those who want to stick with the competition framework, draw the lines defining the opposing sides in a way that, instead of seeing government as the opposition, recognizes that government officials can be allies in advancing the public good.

Also, the good to be advanced doesn’t always have to be about seeking change. An oft-overlooked form of advocacy is simply keeping policymakers, officials, and the media updated about what’s happening in the regulated community so they can make informed tweaks or adjustments to improve policies and practices instead of making wholesale, disruptive changes.

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