The Nonprofit Blog

Check Back Soon...

2007-01-15T12:00:00.000-05:00

Visit The Nonprofit Blog again for major developments facing the nonprofit sector. In the meantime, if your organization needs any help in Washington, D.C., please contact us.

Happy New Year

2006-12-18T17:15:00.000-05:00

Happy New Year from 501(c) STRATEGIES!

We’ll take a break from posting over the next few weeks. Please make sure to visit The Nonprofit Blog in January (or sign up for a free e-mail subscription) for the latest developments from Washington, D.C. affecting America's nonprofit sector.

Post-Election Conference Call

2006-11-28T12:56:00.000-05:00

On December 6, 2006, Perry Wasserman, Managing Director of 501(c) STRATEGIES, will participate in a national conference call offering “A Post-Election Prognosis for the Nonprofit Sector.” The call will take place from 12:30 pm – 2:00 pm EST and is being hosted by Alliance for Justice. To RSVP, click here.

The New Congress and Nonprofits

2006-11-22T10:42:00.000-05:00

What does the newly-elected Congress mean for the nonprofit sector? The Nonprofit Times and The Chronicle of Philanthropy each try to answer this important question. Check out the articles here and here.

Happy Thanksgiving!

Nonprofit Congress Set to Convene

2006-10-10T19:06:00.000-04:00

Next week, on October 16th and 17th, over 500 nonprofit professionals are coming to D.C. for The Nonprofit Congress. Once here, participants will "affirm the shared values of nonprofits, determine the priorities of the nonprofit sector, and create an action plan for charitable nonprofits.” Also at the meeting, Mauricio Vivero, principal of 501(c) STRATEGIES, will present on “Targeting Your Advocacy: How (and Who) to Engage at the Local, State, and Federal Level.” If you are attending the Congress, make sure to drop by this session.

As part of the event, organizers are asking people to sign a Declaration for America’s Nonprofits. Please check it out.

House Clears Bill Mandating Disclosure of Federal Grants, President Bush Expected to Sign into Law

2006-09-13T20:27:00.000-04:00

Last week, I reported the Senate approved S. 2590, much-hyped legislation requiring the federal government to make public via a searchable website information on all federal spending, including grants to nonprofits. Tonight, the House approved a modified version of the bill, punting it back to the Senate for consideration. Now, the Senate is expected to quickly approve the House-passed version and send it to President Bush, who will no doubt sign the bill into law.

The searchable website will be up and running by January 1, 2008, and will obviously shed a great deal of light on those nonprofits that receive federal funds. However, the legislation may also end up modifying reporting requirements for federal grantees (and subgrantees), so stay tuned if your organization receives any federal money.

CRS Issues Report on Charitable Provisions in Pension Bill

2006-09-12T14:57:00.000-04:00

Yesterday, the Congressional Research Service (CRS), the public policy research arm of Congress, issued a report on Title XII of the Pension Protection Act of 2006 (Pub. Law 109-280). Title XII contains provisions affecting tax-exempt organizations. The CRS report is a brief (6 pages), well-written summary of all the relevant provisions, and it’s a good read for anyone interested in how the new law will affect their organization. For a copy of the CRS report, e-mail me.

New Legislation Would Create Tax-Free "Personal Philanthropy Accounts" to Spur Charitable Giving

2006-09-12T13:07:00.000-04:00

Senators Johnny Isakson (Republican from Georgia) and Frank Lautenberg (Democrat from New Jersey) recently introduced legislation (S. 3881), which would create tax-free “personal philanthropy accounts” for giving to 501(c)(3) organizations. Under the legislation, individuals would be able to contribute up to $15,000 per year to these personal accounts through an automatic debit from their paycheck before their income tax is calculated and withheld (an “above-the-line deduction”). This would allow the contributions to accumulate and earn interest tax-free. The legislation would also allow employers to match their employees’ contributions.

S. 3881 is largely a place-holder, and we expect a revised version to be introduced next session in both the Senate and House. For a copy of the bill and other supporting documents, just email me.

Can't Get Enough of The Nonprofit Blog?

2006-09-11T22:22:00.000-04:00

Do you love reading The Nonprofit Blog, but the idea of visiting our site daily is just too much to bear? If so, today is your lucky day...

We recently added a free e-mail subscription service to the blog. Just enter your e-mail address in the box to the right of this post, click "subscribe" and you will begin to receive a daily e-mail when we add new content. It's that simple. We also added a site feed for those who are technologically inclined.

Please e-mail me if you have any questions.

Senate Passes Bill Mandating Disclosure of All Federal Grants

2006-09-08T13:39:00.000-04:00

Late last night, the Senate approved S. 2590, the Federal Funding Accountability and Transparency Act, which requires the Office of Management and Budget to make information on all federal grants publicly accessible through a searchable website. The House is likely to consider and approve legislation similar to S. 2590 next week.

Does your nonprofit receive federal money? Find out what this bill might mean for you.

Finance Committee to Hold Hearing on Nonprofit Hospitals

2006-09-07T09:41:00.000-04:00

Next week, the Senate Finance Committee will hold a hearing on “Taking the Pulse of Charitable Care and Community Benefits at Nonprofit Hospitals.”

This hearing certainly comes as no surprise. Both the Senate and House tax-writing committees and the Internal Revenue Service (IRS) have expressed great concern over the operation of nonprofit health care facilities. For example, Senate Finance Committee Chairman Grassley sent letters in June to the IRS seeking “comment and in some cases stepped-up enforcement" in several tax-exempt areas. His number one concern: nonprofit hospitals. Also in June, the IRS sent “compliance check questionnaires” to more than 550 nonprofit hospitals to determine whether they are abusing their tax-exempt status. Reportedly, the IRS will soon decide whether standards for nonprofit hospitals should be changed or clarified.

Securities Industry Asks for Guidance on IRA Charitable Rollover

2006-09-06T17:17:00.000-04:00

As our readers know, the IRA Charitable Rollover was signed into law on August 17, 2006 as part of a larger package of charitable reforms and giving incentives. So, the clock is now ticking on this incentive because it expires at the end of 2007. As a result, charities are beginning to ask questions about how to actually implement it.

Today, the Securities Industry Association (SIA) released an e-mail they sent to Treasury Department last week asking for guidance on several implementation issues. The e-mail includes questions like:

* Will qualified charitable distributions, need to be tracked under a separate reason code for 1099-R reporting?
* Will financial institution have an "obligation" to report to the charity any identifying information relating to who directed the gift?
* Does the provision apply to distributions from other types of IRAs?

Other national groups are also planning letters to Treasury. Look for more information on this in the coming weeks.

Budget Issues Pending in Congress Will Impact Work of Nonprofits

2006-09-06T08:28:00.000-04:00

There are a handful of federal budget issues pending in Congress that will no doubt impact the nonprofit sector. And, we expect lawmakers could act on them before the year is up. Gary Bass, Executive Director of OMB Watch, discusses two of these issues — estate tax repeal and establishment of “sunset commissions” — in Philanthropy Journal.

The Countdown to Midterm Elections

2006-09-05T23:13:00.000-04:00

With Labor Day now behind us, it’s all about the mid-term elections. And for nonprofits, there are two interesting developments to report....

The Federal Election Committee (FEC) last week considered an interim final rule that would have provided a much-needed exemption to the electioneering communication prohibition contained in the Bipartisan Campaign Reform Act (BCRA) for certain grassroots lobbying communications on issues of public policy. For background on this issue, see my earlier post.

Unfortunately, though, the FEC declined to take action on the exemption. In fact, Democrats on the Commission went so far as to block any action on the exemption for the foreseeable future. That is, not only did they vote against the actual interim rule, they also voted against two other motions that, if approved, would have allowed for a proposed rule to come back before the Commission in the coming months. Specifically, the Democrats: (1) blocked the initiation of any formal rulemaking procedure and then (2) refused to authorize FEC General Counsel to prepare draft rules for discussion. The irony is that the reason the Democratic Commissioners said they voted against the interim rule in the first place was because a formal rulemaking procedure hadn’t taken place. Yet, when a motion initiating such a rulemaking was before them, they voted against that as well.

Of course, election-related activity for nonprofits is not just governed by federal election law, and in recent months the Internal Revenue Service has stepped up enforcement of so-called "politically active" nonprofits. I’ve covered this topic extensively on the blog, so I encourage you to browse through the archives.

Now comes news the IRS has scheduled two “phone forums” to discuss “political intervention rules” for (c)(3)s. The sessions are scheduled for September 19 and 20, 2006 and are "designed for those with experience in exempt organizations law."

August Recess

2006-08-21T10:03:00.000-04:00

Washington is pretty quiet right now, so we're taking a break for the last two weeks of recess. Please check back right after Labor Day for the latest information affecting the nonprofit sector.

"Death Tax" Bill Might Rise From the Dead

2006-08-18T14:39:00.000-04:00

Reports this week are that Republican leaders in the Senate, mainly Majority Leader Bill Frist (Tennessee) and Finance Committee Chairman Chuck Grassley (Iowa), are planning to revive estate tax legislation before the mid-term elections in November. Perhaps they’re hoping third time’s the charm...

As you’ll recall, in late July, the House approved legislation (H.R. 5970) that would have permanently reduced the estate tax. Specifically, H.R. 5970 would have increased the estate and gift tax exemption amount to $5 million per person and $10 million per couple, fully-phased by January 1, 2015, and lowered the rate of tax on estates up to $25 million to the capital gains tax rate (currently at 15 percent, set to increase to 20 percent in 2011 unless extended). Estates in excess of $25 million would have been subject to a phased-in reduced rate of tax of 30 percent, also fully-phased in by January 1, 2015.

When H.R. 5970 moved to the Senate earlier this month, though, it didn’t fare so well. The Senate failed to invoke cloture on the bill, so a vote on final passage could not take place. Two months earlier, on June 8th, the Senate failed to invoke cloture on another estate tax bill (H.R. 8).

Despite these two defeats, we’re now hearing that Sens. Frist, Grassley & Co. will try once again to permanently reduce the estate tax. They are using the August recess to regroup and craft a compromise proposal that can win the support of at least some Democratic Senators. Potential targets include Sens. Akaka (Hawaii), Baucus (Montana), Byrd (West Virginia), Cantwell (Washington), Inouye (Hawaii), Johnson (South Dakota), Murray (Washington), Pryor (Arkansas), Salazar (Colorado) and Stabenow (Michigan).

We’re not exactly sure yet what this compromise might look like, but details should emerge soon.

President Signs Charitable Package Into Law... As Council on Foundations Presses for Immediate Guidance from Treasury

2006-08-17T13:45:00.000-04:00

Today, in a ceremony at the White House, President Bush signed into law legislation (H.R. 4) that includes a package of charitable incentives and reforms. So, the clock is now ticking on the incentives, which last only 17 months, and on the reforms, several of which take effect immediately or are retroactive.

Meanwhile, the Council on Foundations sent a letter to the Department of Treasury yesterday requesting immediate guidance on a number of provisions in the charitable package, including the ban on payments by supporting organizations to substantial contributors and persons related to them, the requirement of private foundations to exercise expenditure responsibility when making grants to Type III supporting organizations and the ban on reimbursing donors and advisors for expenses incurred for the benefit of their funds.

FEC to Consider Interim Rule Protecting Grassroots Lobbying

2006-08-16T17:04:00.000-04:00

On August 29, 2006, the Federal Election Committee (FEC) will consider an interim final rule that would provide an exemption to the electioneering communication prohibition contained in the Bipartisan Campaign Reform Act (BCRA) for certain grassroots lobbying communications on issues of public policy. Earlier this year, over 200 nonprofit organizations urged the FEC to conduct a rulemaking on this very matter.

Under current law, broadcast advertisements that mention a federal candidate are prohibited within 30 days of a primary election or nominating convention or within 60 days of a general election. This prohibition includes some grassroots lobbying broadcast advertisements, even though these communications have nothing to do with influencing elections but rather influencing elected officials on legislative matters that happen to arise in an election year. According to the Alliance for Justice, “If the FEC accepts this proposed interim final rule on August 29, pure grassroots lobbying broadcast ads would be protected through the 2006 election cycle. The FEC would meanwhile consider additional public comments and promulgate a permanent final rule for future years.”

The interim final rule is being proposed by FEC Commissioner Hans A. von Spakovsky. In a statement Commissioner von Spakovsky said, “The right of citizens to ‘petition the Government’ is a fundamental First Amendment right explicitly recognized by the Founding Fathers. It is vital to our democratic process that we continue to protect that right through an exemption for grassroots lobbying on matters of public importance being considered by Congress and the President.”

According to Commissioner von Spakovsky, his proposed rule would permit organizations otherwise subject to the electioneering communication prohibitions to air a television or radio communication during the 30-day period before a Federal primary election and 60-day period before a Federal general election, so long as that communication:

* is directed to an incumbent officeholder in his capacity as an officeholder, and not in his capacity as a candidate;
* has as its subject matter a public policy issue under consideration by Congress or the Executive Branch;
* urges the incumbent officeholder to take a particular position or action with respect to the public policy, or urges the general public to contact the incumbent officeholder for the purpose of encouraging him to take a certain position or action;
* does not reference the individual’s character, qualifications, or fitness for office;
* does not reference any Federal election or a political party; and
* does not promote, support, attack, or oppose any candidate for Federal office.

More information on this once the FEC acts.

White House Names New Director of Faith-Based Office

2006-08-16T09:12:00.000-04:00

Earlier this month, President Bush officially named Jay Hein as Deputy Assistant to the President and Director of the Office of the Faith-Based and Community Initiatives. Mr. Hein was President of the Sagamore Institute for Policy Research, a national think tank he founded that specializes in community-based reforms. Mr. Hein also served as Executive Vice President and CEO of the Foundation for American Renewal, which provides financial grants and other support to community-based organizations and educates the general public on effective compassion practices.

For more information on this appointment, visit the updated website for the Office of Faith-Based and Community Initiatives.

Hein succeeds James Towey, who resigned from the Office in April to become the president of Saint Vincent College in Pennsylvania.

President to Sign Charitable Package Into Law

2006-08-15T10:13:00.000-04:00

We've just learned that President Bush will sign the Pension Protection Act (H.R. 4) on Thursday, August 17th at a ceremony in D.C. H.R. 4 includes a package of charitable reforms and incentives.

Federal Lobby Disclosure Forms Due Today

2006-08-14T10:25:00.000-04:00

Mid-year (January 1, 2006 - June 30, 2006) lobbying reports must be filed with the House and Senate by today. Visit the Office of the Clerk of the House website for more information.

Also, a few weeks ago, the Office of the Clerk issued a new guide to the Lobbying Disclosure Act. It is very helpful and worth reading.

Recess Time

2006-08-07T12:03:00.000-04:00

Now that the Senate has officially joined the House in August recess, we're going to take a week off from posting. Please check back on August 14th, though, for all the latest information affecting the nonprofit sector. Thanks.

Senate Approves Charitable Package, Sends Bill to President

2006-08-04T07:52:00.000-04:00

Last night, the Senate approved by a vote of 93-5 a package of charitable reforms and incentives as part of pension reform legislation (H.R. 4) that passed the House last week. The Senate did not amend H.R. 4, so the bill now moves to President Bush's desk where he's expected to quickly sign it into law.

For a very detailed analysis of the reforms and incentives included in the charitable package, see the latest Joint Committee on Taxation report, pages 263-351.

The charitable package is, in many respects, a watered-down version of provisions that were advanced by Senate Finance Committee chairman Chuck Grassley and the Panel on the Nonprofit Sector.

Senate Could Approve Charitable Package Today or Tomorrow

2006-08-03T08:47:00.000-04:00

According to Republican leadership, the Senate is expected to consider H.R. 4, The Pension Protection Act of 2006, later today or early tomorrow and will likely clear the measure before leaving town on Friday for August recess. H.R. 4, which passed the House last week, includes a package of charitable reforms and incentives.

On Tuesday, Senate Majority Leader labeled H.R. 4 “must-pass” legislation, and said he’s hopeful the Senate will approve the measure without amending it, thereby avoiding a House-Senate conference committee.

More on this once the Senate acts.

Combined Federal Campaign Under Fire (Again)

2006-08-02T16:17:00.000-04:00

The Washington Post reports today that six charities are suing the Office of Personnel Management (OPM), claiming they were unfairly dropped from the official eligibility list for the Combined Federal Campaign (CFC). The CFC, which is run by OPM, is a fund-raising drive conducted every fall that allows federal employees and military personnel to donate money directly to charities — 22,000 in 2005 – of their choice.

According to the article, "In rejecting the charities' applications, OPM said they did not meet a requirement that charities operate in 15 or more states or in another country over the previous three years." The article continues, "The way OPM goes about creating the annual [CFC eligibility] list has been a recent subject of criticism and legal wrangling. Last year, OPM dropped a long-standing requirement that charities spend no more than 25 percent of their revenue on salaries and other administrative expenses after the national chapter of the Make-A-Wish Foundation sued in federal court. The agency was forced to print additions to the brochure it had prepared for the campaign."

OPM also came under fire earlier this year when the Government Accountability Office (GAO) concluded that OPM did not independently verify with the Internal Revenue Service whether charities in the CFC were truly tax-exempt organizations. The House Ways & Means Committee requested that GAO look into this matter and held a hearing on GAO's findings in May. As a result of the increased attention from Capitol Hill , OPM recently issued a proposed rule, which would make significant changes to the “eligibility requirements and public accountability standards” for charities participating in the CFC. For more information on the proposed rule, see my post on it.