Sign On Today
Join with Other Nonprofits in Signing the New Letter to Congress
We and the national coalition of nonprofits call on all charitable organizations to join in the effort to advocate for inclusion of immediate relief for nonprofits in legislation moving through Congress. This past week, 55 national nonprofit organizations sent a letter to President Biden and congressional leaders identifying challenges charitable organizations continue to face and seeking support for urgently needed policy objectives that will enable charitable organizations to contribute to the nation’s relief, recovery, and rebuilding. The letter states: “Given our unique role of providing pandemic relief and economic recovery, we ask that Congress and the Administration enact a package of relief solutions tailored to the actual needs and realities of these organizations that, like you, are devoted to serving the public good.” Those solutions include:
- Nonprofit Jobs: Enactment of the WORK NOW Act, improvements to the Employee Retention Tax Credit, collection and timely reporting of nonprofit employment data; and
- Nonprofit Resources: Extension and expansion of the Universal Charitable Deduction, protection of the itemized charitable donation deduction, appropriation of emergency grant funds, preservation of the ARPA state/local funds, and expansion of broadband.
The Charitable Nonprofit Policy Priorities Letter is open to all organizations that support the policy objectives and the work of charitable organizations in communities. Take action now!
Read the Letter ♦ Sign the Letter ♦ Share the Letter
A Week of Congressional Decision & Uncertainty
The action or inaction occurring this week has the opportunity for defining whether Congress will accomplish anything of significance in the second half of this year. Time is running out for the bipartisan group of Senators to negotiate all of the details in their $1.2 trillion infrastructure bill. Last week, the Senate blocked a procedural bid to commence debate on the legislation and negotiators were given the opportunity to work through this past weekend to complete the drafting of the bill. President Biden has stressed his preference for a bipartisan bill, but is willing for the Democratic majority to advance his broad agenda by utilizing the “reconciliation” process to expedite consideration without the chance of a filibuster. Democratic leaders have said they will include their own version of infrastructure spending into the budget bill if bipartisan legislation does not materialize. Speaker Pelosi has said repeatedly that the House will only consider an infrastructure measure in tandem with a much larger budget reconciliation bill, meaning quick enactment of a bipartisan infrastructure bill is not likely.
Unemployment Benefits Reprieve Provided by Labor Department and Courts
The U.S. Labor Department has issued guidance informing states they can reverse their decisions to cancel extended and enhanced unemployment benefits, including the $300 weekly supplement to unemployed workers and the coverage of some costs charged by the states to reimbursing employers. In May and June, governors from 26 states served 30-day notice of their intent to withdraw from some or all of the six unemployment relief programs enacted as part of the American Rescue Plan Act. Governors from five of those states (Arkansas, Missouri, Montana, South Carolina, and Texas) acted to terminate all ARPA unemployment support programs, including the temporary federal coverage of 75% of the costs that states charge reimbursing employers – some charitable nonprofits and local governments that normally reimburse the states for benefits paid to their former employees. The new Labor Department guidance provides, in relevant part, “If a state wishes to resume receiving the transfers of funds and reducing the reimbursement amounts owed by governmental entities and certain nonprofit organizations, it must notify the Department immediately.”
Courts in two states have struck down the actions by their governors to cancel some of the ARPA unemployment relief, forcing Indiana to restart the $300/week benefit and preventing Maryland from ending the benefit. Maryland’s governor has since announced the state will not appeal the decision because the early-September end date of the program. Lawsuits reportedly have also been filed in Ohio, Oklahoma, and Texas after those states announced they would end programs early. See this Route Fifty article for more background.
- Nonprofit Jobs Report: Nonprofit jobs grew by 60,000 jobs in June compared to May, but remain nearly 700,000 below the pre-pandemic level recorded in February 2020, according to an updated report from the Center for Civil Society Studies at Johns Hopkins University. The researchers project that 684,896 jobs remain lost. The report finds, “The largest gains were seen in the educational field, which regained 8.5% of its initial losses during the month. Religious, grantmaking, civic, professional, and similar organizations rebounded from a weak May to regain 7.4% of their initial losses in June 2021; and the arts, entertainment, and recreation field continued a recent trend of relatively strong growth, reversing 5.5% of its pandemic workforce losses.” Healthcare, however, was the big loser last month, shedding 5,300 jobs.
- Nonpartisanship Prevailed in the Pulpits: Religious leaders preaching from their pulpits largely complied with the legal and practical dictates of nonprofit nonpartisanship during the 2020 elections, according to a report from the Pew Research Center. While most (82%) mentioned the elections and many addressed public policy issues or generally encouraged voting in nonpartisan ways – all legitimate topics under the law guiding tax-exempt status – few crossed the line into partisan politicking. It appears from the research that most religious leaders carefully honored the longstanding Johnson Amendment, the law that protects charitable organizations and houses of worship from pressure to engage in election-related activities in favor or opposition to a candidate for public office.
- Commenting on Treasury ARPA Funds Guidance: This month, the National Council of Nonprofits submitted comments on the Treasury Department’s Interim Final Rule (IFR) on the ARPA Coronavirus State and Local Fiscal Recovery Funds. In these comments, we made the case for clarifying the IFR to ensure governments know that nonprofits are eligible for these funds both as recipients of assistance and as program service providers. The comments further emphasize the need for Treasury to automatically treat 2020 Coronavirus Relief Fund spending as eligible uses for ARPA funds, insist that government programs deemed eligible uses of ARPA funds remain eligible when governments hire nonprofits to do the work, and encourage the use of ARPA funds to advance grants/contracting reforms and payment of nonprofits’ indirect costs when they work on behalf of government pursuant to written agreements. The public comments also provide broader examples of nonprofit activities that should be considered eligible uses of the funds and strongly stress the need for coverage of the full unemployment costs of reimbursing employers. Search all 977 comments.
- Input Sought on Labor Department Planning: The U.S. Department of Labor announced that it is updating its Strategic Plan and Evidence-Building Plan to reflect Biden Administration priorities and is seeking public comments on shaping the plan. The draft plan for FY 2022 to 2026 calls for 1) building opportunity and equity for all; 2) ensuring safe jobs, essential protections, and fair workplaces; 3) improving administration of and strengthening worker safety net programs; and 4) producing “gold-standard” statistics and analyses. A separate management goal calls for the Department to be grounded in “evidence, innovation, and employee engagement.” As part of its review process, Labor is investigating five “priority learning areas,” including equity in employment and training programs and barriers to women’s employment. According to its announcement, the Department welcomes public input, particularly around critical data and evidence gaps in its priority areas. Public comments should be submitted to firstname.lastname@example.org by Friday, August 6, 2021.
Advanced Child Tax Credit Payments and Nonprofits
Starting this month, and continuing through the end of this year, the IRS will send payments of up to $250 or $300 each month, per child, to the parents or guardians of the 65 million eligible children under 18 years of age in the United States. Those parents and guardians include people nonprofits serve and nonprofit employees. A major strength of the new advance Child Tax Credit program is that payments will happen automatically without people having to fill out any paperwork. But what if it doesn’t happen “automatically,” as designed? It has been estimated that, while the new program will work smoothly for 88 percent of recipients, “4 million to 8 million eligible children are at risk of missing out,” and they likely do “not even know the ... obscure-sounding, and scarcely advertised policy exists.” Read on, because it takes a village to raise a child, and we all need to make sure that what has been described as the most significant anti-poverty program in 50+ years doesn't leave any child behind. See Are the People Your Nonprofit Serves and Nonprofit Employees Receiving the New Child Tax Credit Yet?, by Tim Delaney and Steven M. Woolf, National Council of Nonprofits, July 23, 2021.
2021 Sessions Recap
Focus on Charitable Giving Incentives
With most regular sessions of legislatures adjourned for the year, it’s time to take stock of trends affecting charitable nonprofits; first up – charitable giving incentives. Back in 2019, Arizona lawmakers enacted an above-the-line deduction for taxpayers valued at 25 percent of donations. This year’s budget includes a provision that increases the cap over time by the rate of inflation, not to exceed 100 percent. Pending legislation in North Carolina would create a new state tax credit of 25 percent for charitable contributions by individuals who use the standard deduction. The North Carolina Center for Nonprofits recommended the bill to reduce the cost of donating to nonprofits by providing a tax benefit to all North Carolina taxpayers, particularly those with low and middle incomes. Charitable giving incentive bills in several other states failed to get traction in 2021.
Going the other way, legislators in Colorado capped itemized deductions at $30,000 for individuals and $60,000 for couples for taxpayers with incomes more than $400,000. The cap was part of a larger tax reform package intended to help lower-income families and small businesses. In Massachusetts, a charitable deduction is once again likely to be postponed. Voters approved the deduction in 2000, but the state has delayed it from taking effect for two decades with one exception. The incentive was to be re-instated this year, but thus far budget negotiations have failed to restore the deduction. “We have no doubt that when it does get reinstated, it will provide a terrific boost to giving,” said Jim Klocke, chief executive of the Massachusetts Nonprofit Network.
Spending ARPA Funds
Focus on Local Investing
American Rescue Plan Act funds allow city, county, municipal, and other local officials to “transform” their communities in ways previously unattainable, often by partnering with local community-based nonprofits. Here are a few examples of some of those programs using Coronavirus State and Local Fiscal Recovery Funds:
- Nonprofit Priorities: The City of Raleigh, North Carolina plans to support nonprofits during the largest phase of its ARPA spending with a focus on health and economic impacts in food security, homelessness, housing, mental and public health, and specifically targeted programs helping elderly, youth, persons with disabilities, substance users, and persons experiencing homelessness for support by human service agencies. The City Council of Austin, Texas allocated nearly $100 million to homelessness programs with the Mayor calling it a “once-in-a-lifetime opportunity” to “get people in homes, places where they can get services and improve their lives.” An Eau Claire County Committee in Wisconsin has proposed using $2.8 million in ARPA funds for broadband expansion for underserved areas.
- Nonprofit Relief Funds: Earlier this month the City of Winter Park, Florida allocated $200,000 for a grant program and opened applications for financial aid to assist nonprofits “detrimentally impacted by the pandemic in their recovery initiatives.” Nonprofits in the city with operating expenses less than $2 million were encouraged to apply for grants up to $25,000. The resource was announced after the Florida Nonprofit Alliance, the state association of nonprofits, and the Florida League of Cities posted as a resource the Recommendations from the Special Report on ARPA Funds. The City of Alexandria, Virginia has approved a spending plan to allocate $59.6 million to meet its framework goals to ensure: businesses thrive, everyone has access to the basics, recovery lifts everyone, and the City makes long-term investments for the future.
- Louisiana Localities: Local governments in Louisiana are quickly deciding how to spend their ARPA monies. The City of New Orleans established a task force to recommend how ARPA funds should be spent, and Shreveport Mayor Perkins held listening sessions to collect resident feedback on public safety, infrastructure, economic development, and technology. Shreveport is located in Caddo Parish, which is also accepting funding applications to respond to or mitigate the public health emergency, provide government services, invest in infrastructure, and pay essential workers. The Mayor-Presidents of Baton Rouge and Lafayette plan to offer ARPA spending plans to their respective councils to treat the funds as part of their ordinary budgeting processes.
Read the Special Report, Strengthening State and Local Economies in Partnership with Nonprofits, for more ideas for investing ARPA funds to support the work of charitable nonprofits.
ARPA Funds and the Humanities
Cultural organizations may currently be eligible for ARPA-funded grants from the National Endowment for the Humanities through state and regional humanities councils. The primary purpose of the supplemental funding is “to prevent, prepare for, respond to, and recover from the Coronavirus pandemic.” Many state and regional councils are now in the process of issuing grants of up to $25,000 to humanities-focused nonprofits for use in programs and operational support. Cost sharing/matching funds are not required. The deadline for applying for these grants is closing soon in most states. Go to your state humanities council to learn more about the timing and availability of ARPA grants.
Recognizing One Good Turn Deserves Another
People know that charitable nonprofits are problem solvers in their communities. That’s why some people choose to work for or volunteer at nonprofits, and it’s why other people turn to charitable organizations when seeking relief, recovery, rebuilding, and rejoicing. So it is imminently reasonable, though not nearly common enough, that wise elected officials – serving the same constituents as nonprofits – seek to sit down with nonprofit leaders to identify problems, envision solutions, and mobilize to get them done.
We’re delighted to highlight here one of the latest government-nonprofit collaboratives. We’re mindful that it’s not the only example, so we encourage readers to share your own experiences, observations, and thoughts on collective problem solving so we can all learn and have working models to offer to state and local officials.
This month, Shelby County (Memphis), Tennessee, announced the formation of the Nonprofit Leadership Committee, a collaboration involving the Mayor’s Office and more than 150 local nonprofit organizations. The new committee reportedly is modeled on a countywide task force that has worked to help guide local responses to the COVID pandemic. Shelby County Mayor Lee Harris shared his inspiration and expectations for the new committee by stating, “We have begun to scratch the surface of what is possible with serious collaboration.” Continuing, he said, “I hope this new committee places us firmly on the road toward durable, long-term partnership.”
The new collaboration, a potential model for other communities, is designed “to strategically align the work they do, identify barriers in providing services, and formulate concrete solutions to problems.” Importantly to nonprofits, the committee can help identify and then remove barriers to providing the services that can fall through the gap between government and nonprofits. The committee has a steering group of community leaders and four subcommittees: Art and Culture; Children, Youth, and Education; Health and Human Services; and Workforce Development. According to the county’s news release, each subcommittee has met, identified chairs, hammered out their needs, and begun to craft achievable goals.
Charitable nonprofits are all about collaborative efforts; it’s rare that our missions call for a go-it-alone approach. The Nonprofit Leadership Committee in Memphis is a great reminder that governments can’t go it alone either – we’re stronger through collaboration.
Read more examples of Advocacy in Action,
a regular feature of Nonprofit Advocacy Updates.