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Nonprofit Advocacy Updates

 

Voting. It’s more than a civic duty.

Rather than tell readers what you already know, we’re calling on notables from our past and present to make the case for voting. Who said that (key to Notable Vote Quotes at bottom of newsletter):

  1. “Someone struggled for your right to vote. Use it.”
  2. "The vote is precious. It is almost sacred. It is the most powerful non-violent tool we have in a democracy."
  3. “We do not have government by the majority. We have government by the majority who participate.”
  4. “So when you don’t vote, what you’re really doing is letting someone else take power over your own life.” 
  5. “If you don’t vote, you lose the right to complain.”

Federal Issues

 

Lame-Duck Session Prospects for Action

Congress and the President left DC to campaign without completing their work: appropriating funds for the federal government through the current fiscal year and enacting a COVID relief package. When they return after the election for a lame-duck session, they must by December 11 either put another temporary measure in place until early 2021, pass a status quo bill that maintains stable funding through September 30, 2021, or fight over spending priorities and risk yet another government shutdown if they cannot reach agreement. 

 

Whether the parties finally come together on a COVID relief bill remains in doubt. President Trump and Speaker Pelosi have both stated they want to see a bill completed during the lame-duck session. However, negotiations remain far apart on most major issues, including aid for state and local governments, funding for vaccines, schools, and child care, and liability protections for employers. Senate Majority Leader McConnell disagrees with enacting relief during the post-election session, saying last week that he expects Congress to move another coronavirus relief package “right at the beginning” of 2021. He remains committed to a narrower version of stimulus legislation along the lines of a bill that failed to move last month. Other lawmakers, however, are preparing for serious lame-duck negotiations. Senate Democrats recently introduced the Heroes Small Business Lifeline Act, relying largely on the text of the House-passed Heroes 2 bill. Last week House Republicans introduced the Commitment to Defeat the Virus and Keep America Healthy Act that provides details on the forms of healthcare relief they support in a COVID relief package.

Administration Pushes Its Ban on Bias Training in the Face of Near-Universal Opposition

In the weeks since the President signed his “Executive Order Combating Race and Sex Stereotyping” (EO 13950), both the federal government and a phalanx of opposition have taken action. The Administration has cancelled all implicit bias trainings within the federal government and set up a hotline for individuals to complain about feeling uncomfortable about discussing race and gender inequality. The Labor Department published a Request for Information that federal officials acknowledge could lead to enforcement actions against organizations that submit training materials deemed violative of the EO. Opposition has been equally aggressive. On October 5, Nonprofit Quarterly ran this article from the National Council of Nonprofits on fighting back against the EO. To date, the President has received letters calling on him to revoke the EO from for-profit and nonprofit employers (private sector letter), CEOs of national nonprofit organizations, scores of civil rights groups, and other groups. See Trump’s crackdown on trainings about white privilege draws broad opposition, Washington Post. Representatives in the House introduced H.R. 8595, a bill to invalidate the EO. See news release. Last week, the NAACP Legal Defense and Educational Fund – representing the National Urban League and National Fair Housing Alliance – filed a civil rights class action lawsuit challenging the EO for violating the First and Fifth Amendments to the Constitution. The fate of the EO could be decided by the presidential election or through continued advocacy efforts by individuals and entities dedicated to diversity, equity, and inclusion.

Federal FastView

  • 2020 Census Status Update: The official census count ended in mid-October 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 as it had planned. A large coalition of nonprofits, led by the Leadership Conference on Civil Rights, then sent a letter to Congress signed by 370 organizations. The letter sought to “underscore the importance and urgency of extending statutory reporting deadlines for apportionment and redistricting data, to give the U.S. Census Bureau sufficient time to thoroughly implement complex data processing activities and complete the most accurate 2020 Census possible.” See the news release. Separately, parties challenging the actions taken by the Census Bureau filed a revised lawsuit alleging that the government pressured census takers to falsify data in order to close cases and allow the Bureau to falsely claim it had reached 99.9% of households.
  • PPP Loan Forgiveness: According to an SBA publication in the Federal Register, there will be a new SBA Form 3509 (for-profit borrowers) and Form 3510 (nonprofit borrowers), which are labeled as questionnaires dealing with PPP “loan necessity.” Reportedly, the forms “are for specific borrowers with PPP loans worth $2 million and above.” The SBA estimates that about 10,000 nonprofits will be filling out this form. Comments on the reasonableness of the forms are due November 25. Also, the SBA posted a high-level overview of what borrowers have to do as part of the PPP forgiveness process: Paycheck Protection Program Loan Forgiveness. According to SBA, “The basic premise is that the borrowers in all cases should work with their PPP lenders on forgiveness.”
  • New OMB Guidance effective Nov. 12: The federal Office of Management and Budget (OMB) issued Final Guidance on amendments to the Guidance for Grants and Agreements (OMB Uniform Guidance). The revisions incorporate current goals and initiatives of the Administration, statutory requirements, and clarifications of existing requirements. The changes include rules for exceptions to the requirements, revised ability to terminate federal awards, clarification of the de minimis rate that nonprofits can adopt, public disclosure of negotiated indirect cost rates, and new preferences for domestic recipients. OMB’s new requirements will be effective Nov. 12. Learn more from this Venable LLP analysis: Revisions to the Uniform Guidance include welcome changes and new areas of risk.
  • Retirement Security Legislation Introduced: House tax committee leaders introduced legislation last week that seeks to expand retirement savings opportunities. The bipartisan bill, the Securing a Strong Retirement Act of 2020, would make dozens of changes to retirement plans, including increasing to $130,000 the amount individuals could annually contribute (roll over) to charitable nonprofits from their individual retirement accounts. It would also expand the IRA charitable distribution provision for one-time distributions to charitable organizations through charitable gift annuities, charitable remainder unitrusts, and charitable remainder annuity trusts (Legacy IRAs). Further, the measure would expand to nonprofit 403(b) retirement plans some of the options recently made available to 401(k) plans. See the bipartisan news release, section-by-section summary, and legislative text. While bipartisan, it is unclear whether the bill will be taken up this year, or is intended as a marker for the 117th Congress.
  • Standard Deduction, Estate Tax Caps Adjusted for Inflation: In its annual update, the IRS has adjusted several caps on multiple tax-law provisions. The standard deduction for married couples filing jointly for tax year 2021 rises to $25,100, up $300 from the prior year. Single taxpayers and married individuals filing separately will see a standard deduction of $12,550 for 2021, up $150. Estates of decedents who die during 2021 have a basic exclusion amount of $11,700,000, up from a total of $11,580,000 for estates of decedents who died in 2020.
  • IRS Revising the Form 990-T: The IRS has announced changes to Form 990-T, the form used by nonprofits to report unrelated business taxable income. The revised Form 990-T allows for e-filing in calendar year 2021 (reporting on tax year 2020), and includes changes to improve reporting income consistent with the “siloing” rules of Section 512(a)(6) enacted as part of the Tax Cuts and Jobs Act. The 2020 Form 990-T separates the tax computation (which will be on Form 990-T) from reporting of separate unrelated trades or businesses, which will be on as many Schedules A (Form 990-T) as the organization needs. Both Form 990-T and Schedule A (Form 990-T) are now available for preview on the Draft Forms webpage.
  • Reversing Auto-Revocations: Potentially thousands of nonprofit organizations improperly received letters from the Internal Revenue Service revoking their tax-exempt status. Blaming a programming glitch, the IRS acknowledged the mistake that arose when the Service extended the filing deadline for Form 990 informational tax returns from May to July but did not turn off the auto-revocation system. Nonprofits that fail to file Form 990s in three consecutive years automatically lose their tax-exempt status. The IRS took action to correct its mistake after receiving a letter from Members of the Ways and Means Subcommittee on Oversight. See news release and learn more about how nonprofits can expedite restoration of improperly revoked status.

State and Local Issues

 

Control of Legislatures and Redistricting at Stake

State LegislaturesAs voters elect more than 5,000 state lawmakers this week, they may shift control of state legislatures in several states. The greatest consequence could be on where congressional and legislative lines are redrawn in the 35 states that empower legislators, rather than independent commissions, to establish lines in the next round of redistricting. Currently, Republicans control the legislatures in 29 states and hold majorities in 59 of the 99 state legislative chambers (Nebraska has a unicameral legislature). Democrats are hoping to flip at least seven chambers, including in Arizona, Iowa, Minnesota, and make significant gains in Georgia, Michigan, North Carolina, Pennsylvania, and Texas. “It’s absolutely clear that a decade of power is on the line with redistricting,” said Austin Chambers, president of the Republican State Leadership Committee. See this Governing analysis for more information.

States Push Out Coronavirus Relief Funds

Nonprofits are benefitting from the end-of-year deadline for states to disburse Coronavirus Relief Fund monies. Over the past two weeks, officials in more than a dozen states and localities have announced or expanded programs that nonprofits and for-profit businesses can tap. Grant programs in Mississippi, North Dakota, Ohio, South Carolina, and South Dakota specifically included set asides for nonprofits, and two recently-announced programs in Connecticut will benefit small businesses, including nonprofits and the arts and creative sector. The Maryland Department of Labor announced a new $20 million investment in the COVID-19 Layoff Aversion Fund to support nonprofit and for-profit employers by “preventing or minimizing the duration of unemployment resulting from layoffs.” A new program in North Carolina provides financial relief up to $20,000 per facility for businesses and eligible nonprofits closed earlier this year to cover mortgage, utility, and rent costs.

 

Delaware and Vermont reopened or expanded programs to include nonprofits for the first time. Last week Virginia Governor Northam issued a press release announcing the dedication of some of the Commonwealth’s CRF monies for grants to nonprofits. The new directive came less than a week after the Center for Nonprofit Excellence and a coalition of nonprofits sent a letter urging that nonprofits be included.

States Working to Ease Employer Costs of Unemployment Coverage

Policymakers in several states are stepping in to relieve employers – contributing and reimbursing alike – of crippling unemployment costs resulting from the pandemic. The relief is welcome because, as Politico reports, employers “across the nation could soon face state tax increases to pay for the surge in Americans filing for unemployment benefits this year, further straining employers at a time when many are fighting for survival.” In Louisiana, two bills on the Governor’s desk would suspend the calculation of wages and unemployment benefits for unemployment tax increases, benefit reductions, and a UI solvency tax increase until after the 2021 legislative session. The Governor signed a third measure last week delaying increases in the calculation of wages and unemployment benefits for 2021. Legislation that passed the Assembly and Senate in New Jersey last week would provide relief on experience ratings for contributing employers and provide full relief for self-insured nonprofits. The legislation faces a procedural snag but will likely head to the Governor’s desk soon.

 

Officials in Minnesota are in the process of notifying thousands of nonprofits and other reimbursing (self-insured) employers that billings will be suspended through the rest of the year. The notices also make clear that bills are being revised to remove charges that the federal government is paying. Similarly, the Division of Employment Security at the North Carolina Department of Commerce posted a clarification that reimbursing employers in the state will not be charged for their UI claims as part of a previous Executive Order and legislation. Reimbursing employers in the state are to receive a statement this month reflecting all credits due to their accounts.

Advice Worth Heeding

Election Results, Civil Unrest, and the Role of Nonprofits

“Lately, we're hearing a lot of anxiety about the upcoming election.” That’s how CalNonprofits begins its new resource, Anticipating Election Day and the election outcome. They are not alone, as this front-page article in the Washington Post reports. Indeed, several state associations of nonprofits have shared information with nonprofits offering insights, including the Minnesota Council of Nonprofits, Nonprofit Association of the Midlands (Nebraska and Western Iowa), and Nonprofit Association of Oregon. Among items for nonprofits to consider: lead with shared values – including commitment to the common good and a strong democracy, and remind people it will be days before we will know the winner of various elections because each state uses different procedures and it takes time to count every vote.

 

Advocacy in Action

 

Nonprofits, Democracy, and Voting: They Go Together So Well

Thanks to the great work of many nonprofits, including many among our readers, our nation is headed to potentially the largest voter turnout rate in the modern era. We celebrate the turnout as a nonprofit advocacy success story. That is, nonprofits promoting democracy is the very essence of nonprofit advocacy. So who is doing what? Here are a few (of very many) impressive examples.

 

Nonprofit Staff VoteNonpartisan get-out-the-vote efforts led by nonprofits have paved the way to get nonprofit staff, board members, volunteers, and the communities they serve to register, provide time off to vote, and to have their voices heard. The Nonprofit Staff Vote campaign from Nonprofit VOTE gives resources and tools to provide time off to vote so employees don’t have to choose between voting and their paycheck. Nonprofits have been encouraged to join the movement, publicize their policies to their employees, provide voter plan information, and then get out to vote. As they say, “Tick tock, it’s vote o’clock!”

 

Other groups focused on specific demographics have provided voter guides and state by state resources specific to their constituents. AARP, for example, has made the elections real for their members by “urging older Americans to ask the candidates 5 key questions” about social issues affecting them like social security, Medicare, economic recovery, prescription drug prices, and long-term care. She VotesThe She Votes initiative by Girls Inc. teaches girls about the importance of democracy, representation by women and people of color, history of suffrage, how to become a voter, evaluating candidates and confronting gender stereotypes, and looking critically at campaign advertising.

 

State associations of nonprofits have done their part to bring their members together on the importance of civic engagement. Nearly all are active participants in the efforts of Nonprofit VOTE. Beyond that, they promote voting in different ways. The Foraker Group in Alaska posts a guide on its website, “We’re Alaska’s Nonprofit Sector & We Vote!” Colorado Nonprofit Association recently explained how its members can “Wield Your Power to Vote on Colorado's Issues.” Forefront in Illinois dedicated semi-monthly statewide Forum discussions to “voter engagement and voter registration.” Nonprofit New York, along with other nonprofit partners in New York City, launched the NYC Nonprofits Turnout: A Voter Empowerment Project to “activate all corners of the sector – clients and families, staff and leadership, board members and funding partners – to create a new power dynamic that puts the needs of nonprofits and the communities we serve first….” The North Carolina Center for Nonprofits included a “Voting Tip of the Week” in its weekly newsletter because it believes “it is important for all 501(c)(3) nonprofits to participate in nonpartisan voter registration, voter education and get-out-the-vote activities to strengthen the voices of their communities and the people they serve.”

 

The message from nonprofits is clear: it’s time to vote. Get your plan ready and have your voice heard now.

 

 

Notable Vote Quotes

1. Susan B. Anthony; 2. John Lewis; 3. Thomas Jefferson; 4. Michelle Obama; 5. George Carlin

 

I work for a nonprofit and I vote