Welcome to the Nonprofit Champion, our biweekly public policy newsletter. This email format provides brief digests of the full articles to help readers quickly access information. For more details about a specific item, see the full newsletter posted online Nonprofit Champion | June 3, 2024.

Top of the News

The Labor Department’s Overtime Final Rule is scheduled to take effect on July 1, requiring employers to pay “white collar” employees salaries of at least $844 per week ($43,888/year) for the employees to remain exempt from overtime pay of time and half of their hourly rates. In late May, more than a dozen business organizations filed suit seeking to have the rule vacated/enjoined and declared beyond the Labor Department’s authority. They hope to block the increase in the salary level thresholds from going into effect in 27 days, as well as a separate, more significant hike on January 1, 2025. They are also asking the judge to block the plan by DOL to index the thresholds for inflation every three years.

• Why It Matters: It is impossible to accurately predict when or how the federal judge in Texas will decide on whether to block the rule from going into effect; nonprofits should be preparing now for the overtime changes to ensure compliance.

[Read more]

Although the new DOL Overtime Final Rule is a matter of federal law, the adjustments nonprofit and other employers must make can be influenced by state labor laws. Webinars hosted by state associations of nonprofits are addressing the effect on charitable nonprofits in those states.

[See list of recent and upcoming webinars]

State and local governments have until the end of this year to commit to spending  – i.e., “obligate” the funds via a written agreement – their share of the $350 billion in State and Local Fiscal Recovery Funds (SLFRF). Charitable nonprofits, while eligible for SLFRF, have been included in only 4.0% of projects reported as of the end of 2023. Recent actions by local governments in Indiana, Iowa, and Pennsylvania give hope that charitable organizations are making progress in accessing these funds to support their communities.

• Why It Matters: More advocacy is needed if community-serving organizations hope to secure any of the estimated $89.9 billion in unspent funds sitting in local and state governments. Charitable nonprofits are encouraged to contact their local government officials on the status of these funds and confirm whether the funds have been obligated.

[Read more]

Federal News

• Offering Tax Policy Input: The House Ways and Means Committee announced the creation of 10 tax teams of Republican members of the Committee to evaluate tax proposals in advance of the 2025 tax legislative scrum. Charitable organizations can now submit comments to the Committee to demonstrate the benefits of supportive tax policies, such as the charitable deduction, and to stress the need for additional tax reforms. that will better enable organizations to advance their missions in communities. Comments will be accepted through October 15, 2024. [Read more]
  
  
• 2023 Internal Revenue Service Data Book: The Internal Revenue Service (IRS) released the 2023 Data Book, a report on its activities engaging with charitable nonprofits and others between October 1, 2022, through September 30, 2023. In the most recent fiscal year, the IRS approved 86.3 percent of applications for tax-exempt status. There were nearly 2 million (1,999,457) tax-exempt organizations, nonexempt charitable trusts, and nonexempt split-interest trusts recognized in Fiscal Year 2023. [Read more]
  
  
• REMINDER – Student Loan Consolidation Deadline Extended to June 30: The Biden Administration has extended the deadline for borrowers with outstanding Family Federal Education Loans (FFEL) loans, including parents with Parent PLUS loans, to consolidate them into a Direct Loan. Nonprofit employees can receive credit toward the Public Service Loan Forgiveness program for any month covered by the payment count if they meet employment requirements. [Read more] 
  

🗳️Voter Engagement

State & Local News

Since the depths of the pandemic, nonprofits have been reporting severe workforce shortages that have hindered their ability to maintain services, much less expand to address growing needs. A survey of major human service providers in New York City found that most had staff vacancy rates of 15% or more, including some with vacancy rates of at least 20%. Frontline positions at these nonprofits – such as cooks, residential aides at shelters, nursing assistants, and social workers – experience vacancy rates of upwards of 40%, indicating that direct service-delivery jobs are the hardest to fill. 

[Read more]

As legislatures wind down, lawmakers continue to make final pushes to address the lack of child care in their states.

• Alabama: has created a series of employer tax credits and a nonprofit provider grant program aimed at expanding child care opportunities.
  
  
• Colorado: Governor Polis signed into law a bill creating a refundable income tax credit for lower-income taxpayers with eligible children up to age 16.
  
  
• Nebraska: Newly enacted legislation appropriates $300,000 for the Intergenerational Care Facility Grant Program to reduce legal and regulatory barriers and provide start-up costs to certain nursing homes and assisted-living facilities so they can provide child care at their facilities.

[Read more]

Government grants and contracts reforms are still moving through legislatures as policymakers attempt to streamline processes for recipients, including nonprofits.

• Connecticut: A pending bill would mandate a study of the state contracting process to examine and streamline the state’s processes when entering grants and contracts with nonprofits.
  
  
• Illinois: Legislators passed and sent to Governor Pritzker for his consideration a bill to require nonprofits with grants totaling more than $1 million annually to post on their websites the aggregated demographic information of the organization’s directors and officers.
  
  
• Maine: Governor Mills signed legislation requiring the Maine Department of Health and Human Services to review the timeliness of payments to grantees of contracts for behavioral health services and housing assistance programs.

[Read more]

The PSLF Coalition, which is leading efforts to simplify and advance student debt relief for nonprofit employees and others, wants to hear from you if you’re working at a charitable nonprofit or in public service and earning forgiveness under the Public Service Loan Forgiveness (PSLF) program.

[Take the 2-minute survey]

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 child care

• Women and Families Struggle with Child Care Following the Federal Funding Cliff, But Fare Better in States with Additional State Funding for Child Care, Shengwei Sun, National Women’s Law Center, May 2024.
  
  
• America's child care shortage is pushing military families to a breaking point, Shannon Pettypiece, NBC News, May 27, 2024.
  
  
• How to Attract Employees — Simple Strategies Work Better Than New Benefits, Ben Goss, Chronicle of Philanthropy, June 3, 2024.

On employment data

• Mothers’ employment has surpassed pre-pandemic levels, but the child care crisis persists, Erin George, U.S. Department of Labor Blog, May 6, 2024

On nonprofit workforce shortages

• Solving the Staffing Crisis Facing NYC’s Human Services Organizations, Melissa Lent, Center for an Urban Future, May 2024.

On the state of nonprofits

• Video: Omaha nonprofits report overall decline in donation rate since COVID (2:07), Taylor Johnson, WOWT 6 News, May 17, 2024, featuring the Nonprofit Association of the Midlands.
  
  
• Video: Newport News organization supports nonprofits on the Virginia and Middle peninsulas (2:11), Ashley Smith, 13 News Now, May 23, 2024, featuring NetworkPeninsula.

On the overtime final rule

• Complaint: Plano Chamber of Commerce, et al. v. Su., May 22, 2024.
  
  
• New Overtime Rule: Nonprofits May Need to Boost Pay for Nearly 500,000 Workers, Jim Rendon, Chronicle of Philanthropy, May 23, 2024.

On nonpartisan voter outreach

• Voter outreach groups targeted by new laws in several GOP-led states are struggling to do their work, Ayanna Alexander, Associated Press, May 28, 2024.

Advocacy in Action

Effective advocacy rarely relies on one-and-done activities, such as making an introductory (i.e., cold) call to ask for a vote. Almost always, relationships are key. State associations of nonprofits have mastered the artform of relationship building, including Nonprofit Days at the Capitol, regional meet-and-greets with elected officials, candidate forums, and more. Those big events can win friends and influence decisionmakers in powerful ways. Another form for ensuring nonprofits have the respect and attention of policymakers is the recurring “check in.”

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