Tuesday, April 11, 2017

Nonprofits boost economy but get squeezed by it too

Budget cuts, competition for donations weigh on bottom lines
City Mission case worker John Mann works with a client on Smith Street in Schenectady.

Nonprofits are not charities that operate like businesses. They are businesses -- fairly similar to for-profit enterprises -- except in their mission and bottom line.
And they are just as worried about balancing their ledgers.
The prospect of government budget cuts, the squeeze of regulations, growing demand for services that non-profits have traditionally performed and competition for donations all weigh on their budgeting process. 
The concerns are highlighted in a recent report by the Johns Hopkins Center for Civil Society Studies: “New York Capital Region Nonprofits: A Major Economic Engine.”
That report found nonprofits are an important piece of the area’s economy, with combined 2013 revenues of $9.2 billion, expenditures of $8.9 billion and payroll of $3.1 billion. The 79,210 paid employees of Capital Region nonprofits far surpassed the next-largest employment sectors: local government (57,193), retail (56,525) and state government (50,404).
The nonprofit sector added 12,834 jobs from 2003 to 2013. Combined, all other sectors showed a net increase of 1,310 jobs, the study found.
(The picture beyond the Capital Region is similar -- New York is the biggest state in the nation for nonprofits, Comptroller Thomas DiNapoli said in December. He noted that more than 31,000 nonprofits employ nearly 1.3 million people here and said both numbers are the highest in the United States.)
The Capital Region report was written by Lester M. Salamon and Chelsea L. Newhouse. It defined the Capital Region as Albany, Columbia, Greene, Rensselaer, Saratoga, Schenectady, Warren and Washington counties.
It was created with support from the New York Council of Nonprofits, the Capital Region Chamber, The Community Foundation for the Greater Capital Region, MVP Health Care and The Schenectady Foundation.

Quantifying the benefits

Capital Region Chamber CEO Mark Eagan said last week that the report puts some specific numbers on something most people already knew about nonprofits: “They're a major economic engine. It's a major sector.”
The chamber got involved at the request of the Tech Valley Nonprofit Business Council, one of the chamber’s internal groups.
Eagan said the nonprofit sector spans the economic spectrum, from GED jobs to PhD jobs, because it encompasses everything from homeless shelters to hospitals and colleges. It is also a big part of the cultural landscape.
"This is different in other markets, but in our market, almost all of our [cultural organizations] are nonprofits.”
Finally, Eagan said, nonprofits provide much of the safety net for people who are struggling in some way.
“Those are all the strengths,” he said. 
Balancing those benefits is the fact that smaller nonprofits pay their employees lower wages, on average, than government and for-profit employers. Also, their facilities are tax-exempt.
"One of the challenges is that nonprofits don't pay property taxes. That does create stress for the cities that host the nonprofits,” Eagan said.
Whether the services nonprofits provide exceed the value of the taxes they don't pay is a question that has long been debated. The answer is yes, in Eagan’s opinion.

Range of sizes

Robert Carreau, executive director of the Schenectady Foundation, said the Johns Hopkins Center report provides valuable insight to the economics of the nonprofit sector. 
His only wish is that the report had differentiated among classes of nonprofits. It offers no distinction between the hospital employing thousands of people, many at high salaries, and the shelter organization with a few dozen employees, many earning near-minimum wage.
"Hospitals and large organizations are lumped in with [Schenectady Inner City Ministry] and small organizations,” said Carreau.
The pressures and challenges facing nonprofits vary by their size, but the work they do is equally important to the people they serve.
“Nonprofits play an enormously important role in the fabric of the community,” Carreau said. “Many nonprofits are continuing to try to do as much, if not more, with about the same funding.”
This contributes to stagnant wages and trouble recruiting and retaining employees, he said. The employee turnover, in turn, erodes the interpersonal relationships important to nonprofits, as they collaborate to resolve problems.
For that reason, a growing role of the Schenectady Foundation is problem-solving, Carreau said, especially by forming groups with common issues, so they can search for solutions.
“Our world is ever-changing ... you have to be very nimble to navigate it.”
The Schenectady Foundation distributes $1.3 million to $1.5 million a year to nonprofits.

They are businesses, too

Michael Saccocio, CEO of the City Mission of Schenectady, said the mission operates entirely on private funding but isn’t immune to cutbacks in government funding. When public funding disappears, the organizations that count on those funds turn to the same finite sources of private dollars on which the mission relies.
The mission is a business, he said, very similar to for-profit companies except in two important ways: It doesn’t pay property taxes, and its bottom-line definition of success is serving a needy population, rather than turning a profit.
Like for-profit businesses, the mission hires vendors and contractors, invests in the community, and employs about 100 people who pay payroll taxes and contribute to the Social Security system. It pays water and sewer fees to the city and forwards sales tax to the state from its thrift store.
“Other than the property taxes, it’s very similar” to any other business, Saccocio said.
He said the Mission doesn’t have the same challenges hiring people that some nonprofits do -- except for the overnight shelter shifts, which are harder to fill.
The satisfaction in helping struggling people get back on track goes beyond the paycheck, Saccocio explained, and that is what draws job applicants.
“It’s a difficult job that’s not heavily compensated.”

Regulatory scrutiny

The Rev. Phil Grigsby, executive director of the Schenectady Inner City Ministry, finds the increasing focus by donors and regulators to be problematic, at times.
After awareness grew of telemarketers siphoning a huge percentage of donations for some charitable operations, everyone wanted to know how much their nonprofit was spending on administrative and fundraising costs.
SICM runs lean, Grigsby said, with only 10 to 20 percent administrative overhead, depending on the details of a particular program. SICM’s summer lunch program, which boosts the organization's staff from 10 to 50 for the season, is a major undertaking, involving much more than rolling up to a playground with a cooler full of sandwiches.
“To run that program, you have to have a very skilled financial person on board,” Grigsby said, adding that it also takes a dedicated program director.
“It requires a certain level of administrative capacity," he said.
With their money, donors are providing more than 2,000 lunches on summer weekdays to children who, during the school year, rely on school districts' free meal programs.
“We’re not doing that program to make money,” Grigsby said.
To fund its $2 million annual budget, SICM relies on a variety of sources.
Grigsby said he’s concerned that the conditions of the 2008 economic downturn -- greater demand for services and less funding for them -- will repeat and pinch SICM's funding sources.
“From our point of view, we’re anticipating that,” he said.

Missing goal

The United Way of the Greater Capital Region is seeing that trend already, Executive Director Brian Hassett said: Its annual campaign is wrapping up, and is short of its target.
“We’ve had a challenging year,” he said. “It’s going to be down $200,000, which in my world is a lot of money.”
The United Way funds 60 organizations and partnerships that serve more than 100,000 people a year, so Hassett has a direct view of the landscape described in the Johns Hopkins report.
“In many ways, it tells a very powerful story,” he said.
The Capital Region has a major asset for nonprofits in its stable and diverse economy, Hassett said. But parts of that economy, particularly technology firms, aren’t as supportive as established companies. The GE Family of Givers, for example, is the largest single donor to the United Way of the Greater Capital Region and is attached to one of the region's oldest corporate residents. 
“The new economy isn't as supportive yet. The ownership and culture has a different approach to philanthropy,” Hassett said. “I'm still hopeful about getting them involved.”
In total, the United Way of the Greater Capital Region distributes about $6 million a year. The recipients, Hassett said, “don't tend to be the big brand names. They struggle; they depend on the United Way, the Community Foundation, private foundations.”
Many are food banks, homeless shelters, community centers, and other organizations that help the working poor, a demographic that increasingly seeks assistance.
“We’ve been trying to shed light on this segment of the community,” Hassett said. 

Nonprofit numbers

Some 2013 statistics offered in the report “New York Capital Region Nonprofits: A Major Economic Engine”:
  • The nonprofit sector added 12,834 jobs from 2003 to 2013 in the Capital Region. Combined, all other sectors showed a net increase of 1,310 jobs.
  • Nonprofits employed 79,210 paid workers, the most of any sector in the region. (The local government sector had 57,193, retail had 56,525, state government 50,404.)
  • Nonprofits employ 16 percent of the region’s total workforce and 21 percent of its non-governmental workforce.
  • Nonprofits had assets of $13.8 billion, revenues of $9.2 billion, expenditures of $8.9 billion and wages of $3.1 billion.
  • The bulk of the region’s nonprofit employees, 48,902, work in health and social services.
  • The average monthly wage was $3,288 for nonprofits, $3,821 for local government, $3,968 in the for-profit sector and $5,221 for state government.

By: John Cropley

Monday, April 3, 2017

Keep Politics Out of Nonprofits

Sign the Community Letter in Support of Nonpartisanship
Congress is seriously considering legislation to repeal or significantly weaken the longstanding law that requires 501(c)(3) nonprofits to be nonpartisan (sometimes called the "Johnson Amendment"). Politicizing 501(c)(3) organizations would damage the public's trust in the work of nonprofits and would take money away from nonprofits' mission-related work and put it into the hands of politicians.

Now is the time to take action to prevent this from happening. Please take two minutes today (March 31st is the deadline!) to sign your organization onto the  Nonprofit Community Letter in Support of Nonpartisanship.

It is essential that as many nonprofits as possible sign on to this letter, since our members of Congress will take our concerns more seriously if they see a strong and united nonprofit sector. Thank you if your nonprofit is one of the 250+ organizations from New York State that has already signed on to the letter.

To learn more about why this proposal is such a threat to nonprofits, check out the  recent op-ed in The Hill (an influential publication on Capitol Hill) from the National Council of Nonprofits and the Council on Foundations.

Please spread the word to other nonprofits. Feel free to forward this action alert to other nonprofits, foundations, and religious institutions.

New York Council of Nonprofits, Inc., 272 Broadway, Albany, NY 12204

In his first year at REBNY, Banks earned $250K less than Spinola

Tax filings show the former Con Ed lobbyist was paid $627K salary in 2015

From left: John Banks and Steven Spinola (Credit: Adam Pincus for The Real Deal)
In his first year on the job at the Real Estate Board of New York, John Banks received a total compensation of $627,335, the real estate trade group’s 2015 tax forms show. That’s nearly $250,000 less than what his predecessor, Steven Spinola, made in the same year, his final one as president of one of the city’s most powerful lobbying groups.
Experts in the world of nonprofit executive pay said there are multiple factors that go into calculating CEO compensation, an important one being length of tenure. Spinola was in the position for nearly 30 years, and spent part of 2015 in charge before formally passing the baton to Banks. But even if it’s only in terms of optics, the fact that REBNY’s first black president made a good deal less than his white predecessor can’t be ignored.
“It doesn’t look good. I can say that,” said Doug Sauer, CEO of the New York Council of Nonprofits. “The perception would raise the question about why he made less.”
A spokesperson for REBNY declined to comment.
Banks earned a base salary of $622,035 in 2015, with perks like money for retirement, deferred compensation and additional non-taxable benefits pushing his total compensation up to $627,335, REBNY’s annual filings with the Internal Revenue Service show. During that same period, Spinola took home a base salary of $846,035, and additional benefits pushed his total compensation for the year to $868,692.
REBNY announced in late 2014 that it had appointed Banks – then the top lobbyist at Con Edison – to serve as its next president. In March 2015, Banks assumed the role of “president-elect” and worked alongside Spinola during a transition period, which included negotiations that ultimately failed to renew the lucrative 421a tax incentive.
It’s not clear whether the compensation figures listed on the tax forms represent salaries for the full year, or just a portion. While the filings cover the 2015 tax year, which runs contiguous with the calendar year, they were only recently made available.
Just as salaries for top executives in the for-profit world are negotiated on the open market, nonprofits compete for top talent with enticing compensation and benefits packages.
Sauer said that for an organization the size of REBNY – it recorded gross revenues of $13.6 million in 2015 – it’s not uncommon to see such large salaries. Still, it is a rarified world.
Out of 4,587 charities studied in 2016, only 76 (or less than 2 percent) paid their CEOs $500,000 or more, according to Charity Navigator, an independent watchdog group. The median salary for a nonprofit CEO in New York City in 2016 was $175,803, the group found.
Sauer added that while it’s not inconceivable that REBNY would pay a newcomer less than someone with three decades of experience, nonprofits typically do pay more to minority leaders..
Minority executive leadership, whether it’s Hispanics or Asians or African-Americans, is usually more of a premium in white organizations,” he said.
Sauer did note that his experience lies mostly with 501(c)3 nonprofits, the kind of organization charities typically use as a tax structure. REBNY is registered as a 501(c)6 – the main distinction being that the trade group is allowed to participate in political activities and has more freedom to lobby lawmakers.
Spinola’s compensation grew steadily over the years, save a slight downturn of just a few thousand dollars between 2008 and 2009 to $661,380. In the following years, REBNY gave him increasingly larger benefits, including a bonus of nearly $200,000 in 2012.
His total compensation topped out in 2014 shy of $1 million.
Other top-earning executives at REBNY include senior vice president James Whelan, who earned a total compensation of $501,139 in 2015, and CFO William Auerbach, who earned $354,676.
By Rich Bockmann | March 28, 2017 08:00AM


Mad for Camp Finance

March Madness!
At NYCON, March Madness starts us thinking about our own Big Event...Camp Finance 2017! This year is our 16th Annual Camp Finance and we look forward to seeing you at Mohonk Mountain House on October 5th & 6th
To capture the excitement of both events, we're offering you our March Madness Camp Finance Discount from now until Midnight on April 3rd. 

You can  save $30 on Full Conference Camp Finance rates. While we are finalizing themes, workshops and speakers for 2017 we want to make sure you - the people who are "mad" about  Camp Finance- can save money!

From March 27th until April 3rd receive a $30 discount on Full Conference registration for Camp Finance. Just click here and enter discount code 17MADNESS.

This all inclusive Full Conference rate covers the workshops, meals and your overnight stay at the lovely  Mohonk Mountain House in New Paltz, NY on October 5th & 6th
The historic and majestic Mohonk Mountain House, site of Camp Finance.
This is just a little Thank You to all of you who are as fond of Camp Finance as we are.  We love seeing you on the mountain and are looking forward to a great conference again this year.
The Camp Finance Team

New York Council of Nonprofits, Inc. (NYCON), 272 Broadway, Albany, NY 12204

Thursday, March 23, 2017

Nonprofit Advocacy Matters | March 20, 2017

Still Time to Take Action
Help Keep Politics Out of Charitable Nonprofits
A core principle of charitable nonprofits – nonpartisanship – is under attackAct Nowin Washington, DC, and all who are concerned about the wellbeing and effectiveness of the nonprofit community are asked to take two minutes to express support for a protection that has defined the sector for generations. Sign the Community Letter in Support of Nonpartisanship now!

Bills pending in Congress would repeal or significantly weaken the current law’s longstanding protections by inviting charitable and philanthropic organizations to endorse or oppose candidates for elected office and divert some of their assets away from their missions to instead support partisan campaigns. This legislation would subject charitable nonprofits and foundations to demands for political endorsements and campaign contributions (diverting donors' money away from mission-related work to benefit politicians) and damage public trust in the work of nonprofits. Further, it’s completely unnecessary. Nonprofits - and their individual staff, board members, and volunteers - already have many legal avenues to freely express their views on a wide range of public policy issues through existing laws that allow for advocacy of our missions to policymakers.

We urge charitable nonprofits, private foundations, religious groups, and for-profit supporters to sign the Community Letter in Support of Nonpartisanship that 2,000+ organizations from coast to coast already have signed. Learn more by going to www.GiveVoice.org and Protecting Nonprofit Nonpartisanship

Health Insurance Repeal and Replacement Advancing in the House
On March 6, Speaker Ryan and House Republican leaders unveiled theAmerican Health Care Act (AHCA), legislation intended to repeal and replace the Affordable Care Act (also known as “Obamacare”). The bill has been approved by three House committees, and the full House could vote on it by the end of this week. The Congressional Budget Office (CBO) has estimated that the legislation would reduce federal deficits by $337 billion and increase the number of uninsured people to an estimated 24 million by 2026. President Trump has endorsed the legislation, but many House Republicans have expressed concerns while several GOP Senators have opposed the bill from the beginning.

Some of the key issues of the AHCA that would potentially affect nonprofits include:
  • Caps on Medicaid: The AHCA would establish a limit on the amount the federal government reimburses the states, shifting from a percentage of costs incurred to a lower fixed amount paid per Medicaid recipient. Over time, this would shift more of the funding burden onto each state, with vastly different health care for Americans depending on where they live.
  • End of Medicaid Expansion: Under the AHCA no new enrollment would be permitted beginning in 2020. Currently 32 states and DC have opted for Medicaid expansion. The CBO projects that under the legislation no new states would expand and some of the expansion states would no longer offer the additional insurance coverage. Coupled with a greater share of the enrollees’ costs, an estimated 5 million fewer people would be enrolled.
  • Establish Refundable Tax Credit: The legislation replaces insurance subsidies under the ACA with refundable tax credits ranging from $2,000 to $4,000. The credits would increase by age and phase out by income level. The CBO estimates that the new tax credits would be smaller than the premium subsidies under the current law. It further finds that because of the elimination of cost-sharing subsidies under the legislation, the share of the costs for medical services borne by lower-income individuals would increase and fewer would obtain coverage. Conversely, tax credits for higher earners would be larger than under the ACA.

President Proposes Spending Priorities for Congress to Consider
The White House released a preliminary budget blueprint for Fiscal Year 2018, which begins on October 1, that has been called “draconian” and “dead on arrival” by some in his own party. The budget proposal, which is essentially a request for funding by Congress (which has the “power of the purse” under the Constitution), seeks $54 billion in increased defense spending and calls for an equal level of spending cuts in domestic programs that often support the work of charitable nonprofits on behalf of governments in communities across the country. The President is asking Congress to cut the Department of Housing and Urban Development by 13 percent, the Department of Health and Human Services by 18 percent, the State Department by 28 percent, and the Environmental Protection Agency by 31 percent. The blueprint proposes to eliminate funding for several programs, including the Corporation for National and Community Service, the Corporation for Public Broadcasting, the Institute of Museum and Library Services, the Legal Services Corporation; the National Endowment for the Arts, the National Endowment for the Humanities, and the United States Interagency Council on Homelessness.

The so-called “skinny budget” only contains top-line spending requests; the more detailed budget proposal that contains policy specifics, data tables, and itemized spending levels for all programs, is not expected until May. Congress must enact twelve spending bills by September 30 or pass a stopgap funding measure known as a "continuing resolution" (CR). The federal government is operating in the current FY 2017 fiscal year under a CR that expires on April 28, meaning that Congress must address immediate decisions on spending to keep the federal government open through September 30 before turning to the proposals President Trump published last week.

Federal FastView
  • Contributing Centennial Celebrated: A resolution celebrating the 100th Anniversary of the Charitable Deduction was introduced in Congress on Friday by Representatives John Lewis (D-GA) and Pat Tiberi (R-OH). House Concurrent Resolution 34 provides a historical timeline of the deduction, enacted into the federal tax code in 1917, and highlights the benefits to the arts, humanities, religious institutions, education, human services, environment, health programs, and many other subsectors, as well as recognizing the empowerment and force of individual philanthropy. The resolution specifically “reaffirms the importance of encouraging rather than diminishing philanthropic services which respond to the needs of communities.”
  • Targeting Planned Parenthood: It has been widely publicized that the American Health Care Act pending in the House would completely defund Planned Parenthood for one year. The day after the AHCA was introduced, President Trump offered a deal to the nonprofit health provider: that if it stopped performing abortion services, the organization could maintain federal funding. Cecile Richards, President of Planned Parenthood, responded that “no federal funding goes towards abortion in the first place,” which is in fact the current law under the Hyde Amendment. Richards stated that the “defunding” of non-abortion services would “block millions of people” from access and preventative care. The Congressional Budget Office projects that 15 percent of people live in areas without health care clinics or have no medical practitioners who serve low-income populations.

More States Consider Minimum Wage Hikes
Several more states are considering minimum wage increases. A Nevada bill would raise the state’s minimum wage by $1.25 per hour until it reaches $15 per hour for employers that do not offer health insurance and $14 per hour for employers that do provide health insurance. A separate Nevada bill proposes a state constitutional amendment to increase the minimum wage to $9 per hour, and in 2022, an additional $.75 per hour per year until reaching $12 per hour. That proposal also calls for removing provisions authorizing an employer and employee to waive the minimum wage requirement in a collective bargaining agreement. New Mexico and North Carolina propose to increase pay from $7.50 per hour to $9.00 per hour over the next year, and $7.25 per hour to $15 per hour by 2022, respectively. An earlier North Carolina bill would have reached the higher rate one year faster.

This month, the Arizona Supreme Court unanimously upheld a voter-approved measure raising the minimum wage to $12 per hour by 2020. The Arizona Chamber of Commerce and Industry challenged the law, arguing in part that the state would be forced to spend more money on contracts, including services provided by charitable nonprofits. The court rejected the argument. Regardless, due to a voter initiative, employment costs will increase in Arizona, and nonprofits will likely need to seek philanthropic support to cover expenses not reimbursed by the governments. See the Open Letter from the California Association of Nonprofits for the role philanthropy can play in helping nonprofits transition to higher labor standards.

Property Tax Exemptions in the Courts
Courts in Michigan and New Jersey have temporarily stymied the trend to remove property tax exemptions from nonprofit entities. Upholding the tax-exempt status of a health care provider, the Michigan Tax Tribunal found in favor for nonprofit property tax exemption. The locality had rejected the nonprofit’s property tax exemption claiming that the organization was ineligible due to its high costs, low proportion of uninsured patients, and apparent growth-through-acquisition strategy. The Tax Tribunal rejected each of the rationales, which may dampen the efforts of other Michigan localities to seek new tax revenue from nonprofits. Similarly, the New Jersey Tax Court overturned a county board’s findings and upheld the tax exemption for religious and charitable use of properties under state law. Contrary to rulings from another New Jersey Tax Court judge, the court in the recent case concluded that “despite evidence indicating that religious activities on the subject church property had diminished … the church continued to make actual use of the property in furtherance of its religious purposes.”

Additional Taxes, Fees, PILOTs
  • Property Tax: Two bills in Connecticut are aimed at diverting resources of hospitals to fund local government operations. One bill would eliminate hospitals’ real property tax exemption and theoretically offset the hospitals’ liabilities under a new property tax scheme; a plan the hospitals do not believe will end in their favor. A separate measure would change the fixed-amount hospital tax to a levy charged every quarter, resulting in a substantial increase.
  • Property Tax: In a string of revenue bills, the Mayor of Providence, Rhode Island proposes to tax certain nonprofit hospital and college properties. Parallel city-backed state legislation would remove property tax exemption for property not essential to the institution’s mission, identifying classrooms and hospital rooms as exempt but vacant lots, parking garages, and undeveloped property as taxable.
  • PILOTs: The Mayor of New Britain, Connecticut has a budget problem and is turning to local nonprofits for help. But in a region of the country where antagonism has been growing due to aggressive government demands and the occasional threats against longstanding property tax exemptions, the Mayor’s approach is unusual: she is asking politely. Mayor Erin Steward has sent letters to 30 nonprofit service providers thanking them for their work to improve the wellbeing of the local community. She lays out the budget challenges of the City, and then asks: “Any donation your organization is willing to make to the city of New Britain to offset any further tax increases on our residents and businesses would be greatly appreciated.”

Tax-Break Transparency Lacking in the Cities
Nonprofits facing demands from local governments to make payments in lieu of taxes (PILOTs) will be interested to learn that cities typically fail to disclose the value and beneficiaries of tax breaks they give to businesses for economic development purposes. New accounting rules require states and localities to disclose revenue loss due to tax holidays and incentives, yet access to the revenue data from cities is extremely limited, according to the organization Good Jobs First. Its new report, “Show Us the Subsidies,” considers a program to be transparent only if the data were available on a public webpage and included the recipient companies’ names. The study found that 50 of the largest local governments fail to disclose basic information needed for transparency, such as who was benefiting and the amounts paid or claimed for the benefit. Over half of the localities fail to disclose any basic information about any of their incentive programs.

New York Donor Disclosure Law Challenged
The newly revised New York advocacy disclosure law is unconstitutional and harmful to nonprofits, according to a law suit filed this month by the Nonprofit Coordinating Committee of New York and the Lawyers Alliance for New York. The suit, filed against the New York State Attorney General, challenges the disclosure requirements under the law because they require 501(c)(3) nonprofits to report donations simply because the entity provided some assistance to 501(c)(4) entities. The disclosure is required even if the support is not connected to lobbying or political speech, the primary focus of the advocacy disclosure law. By challenging the statute, the parties are seeking to protect nonprofits from overbroad laws requiring nonprofits, especially advocacy organizations, technical assistance providers, and community foundations, from identifying donors whose contributions have no connection to lobbying activities.

Government-Nonprofit Contracting Update
  • Knowing When to Say When: Why would a nonprofit choose to give up $12 or $13 million of its $16 million budget? The reason for Catholic Charities of OmahaNebraska is to eliminate government grants and contracts. The charity arm of the Archdiocese of Omaha announced last year that it was getting out of addiction treatment, citing failure of governments to pay the full cost of services and government regulations, including a local ordinance that imposes employment standards contrary to the organization’s mission.
  • Audit Mandate Under Review in North Carolina: Every North Carolina nonprofit that performs services pursuant to state or local government grants or contracts would be required to have a full financial audit conducted at least once every four years, under legislation proposed this month. Under the bill, the Office of the State Auditor would direct the audits proposed under the bill and would be authorized to have nonprofits pay for the costs of audit work. Currently, nonprofits are required to get audits only if they receive at least $500,000 in state grant funds.

Making the Case for the NEA
The Trump budget proposal calls for elimination of numerous programs, including the National Endowment for the Arts (NEA). Supporters of the NEA are mobilizing to convince Congress to ignore the President’s suggestion to defund this vital program.

The American Alliance of Museums immediately emphasized that the NEA and other programs “play an essential role in helping museums make the arts and the humanities accessible to all Americans,” and vowed “to work with our allies to build on Congress’ tradition of strong bipartisan support for these agencies.”

The League of American Orchestras and others are calling on individuals and organizations to urge their U.S. Representative to sign onto the Congressional Arts Caucus letter in support of NEA funding. The League reassures and inspires its members by pointing out that leaders in Congress have voiced bipartisan support for the NEA, both in the past two years of funding proposals, and in public statements made in recent weeks.

Americans for the Arts helps arts advocates make the case by presenting the impact of the NEA in its Action Center:
  • “For more than 50 years, the NEA has expanded access to the arts for all Americans, awarding grants in every Congressional district throughout all 50 states and U.S. Territories as well as placing arts therapists in 12 military hospitals to help returning soldiers heal from traumatic brain injuries.”
  • “The NEA is also an economic powerhouse, generating more than $600 million annually in additional matching funds and helping to shape a $730 billion arts and culture industry that represents 4.2% of the nation's GDP and supports 4.8 million jobs.”
Arts Advocacy DayAnd in an example of prefect timing, arts advocates from across the country convene in Washington, DC for the annual Arts Advocacy Day on March 21. The day of advocacy brings together a broad cross section of America's cultural and civic organizations, along with more than 500 grassroots advocates from across the country, to underscore the importance of developing strong public policies and appropriating increased public funding for the arts.

The arts community is neither monolithic nor of only one mind. But when their impact and value are questioned – as elimination of the NEA and similar programs are proposed – groups with many perspectives come together to advance a common mission. 
This bi-weekly newsletter on public policy issues affecting nonprofits is provided as a benefit of membership in the New York Council of Nonprofits, part of the state association network of the National Council of Nonprofits.

Federal Issues
State and Local Issues

Nonprofit VOTE Webinar
Thursday, March 23, 2017, 2:00 pm Eastern
To prepare for future efforts, learn about voter turnout in the 2016 presidential election, including turnout trends, the relative turnout performance of the states, factors affecting turnout, such as same day voter registration and battleground state status, and recommended reforms that may improve voter participation. Register Now!

Worth Quoting
on the Affordable Care Act
“This country better be careful we're not losing the soul of our country because we play politics and we forget people who are in need."
- Ohio Governor John Kasich, speaking on NBC’s “Meet the Press,” March 12, 2017, addressing the need to work in a bipartisan manner when replacing the Affordable Care Act, and without intention making a profound statement in support of nonprofit nonpartisanship on behalf of the “soul of our country” and keeping people in need in the forefront of our minds. (Quoted in Governing.)

on Nonpartisanship
“It would become: Do we give (money) to help the poor or to help the party? Church and state aren’t a clear-cut division even now, but to do away with the Johnson amendment would just create some level of political and religious chaos.”
- Professor Bill Leonard, Wake Forest School of Divinity, quoted in “Does the church have a place in politics? Three theologians weigh in,” Winston-Salem (NC) Journal, March 19, 2017. For more information on the Johnson Amendment and advocacy efforts in support of retaining it, seeProtecting Nonprofit Nonpartisanship and go towww.GiveVoice.org.

“Nonprofit organizations are best able to advance their missions when they are nonpartisan. Nonpartisan 501(c)(3) nonprofits are able to serve as true problem solvers working in partnership with government and other community stakeholders with shared values and a common vision that moves well beyond any current political cycle. The Johnson Amendment does not unfairly limit the speech of churches or nonprofits. Religious institutions and other nonprofit organizations that want to give up their public charity status are free to expend their funds for or against political candidates and partisan election activity and keep their tax exempt status as a (c)(4), or Section 527 organization.”
- Jennifer Hutchins, Executive Director of the Maine Nonprofit Association, writing in an Action Alert to members urging their organizations to sign theCommunity Letter in Support of Nonpartisanship.

on Federal Spending Impact on the States
“Simply put, every dollar taken from the state that they can’t somehow adjust for is either a dollar taken from something else or possibly a cut or a tax increase. It really is that tight in many states.”
- Scott Pattison, Executive Director of the National Governors Association, quoted in “As Capitol Hill Debates Health Care, States Face Troubling Fiscal ‘Uncertainty’,” Quinn Libson, Route Fifty (March 9, 2017), explaining the stress that federal budget cuts will have on the states.

on National Service
“Service is a strategy to solve problems.”
- Michigan State Representative Julie Calley (R-87), Co-Chair of the Michigan Nonprofit Caucus in the Legislature and former Chair of the Michigan Community Service Commission, speaking about the value of volunteer service programs such as AmeriCorps, during a panel discussion at the Michigan Legislative Day at the Capitol.

Worth Reading
Can a Small College Save Its Small Town?, Aaron M. Renn,Governing, March 2017, relating numerous examples of nonprofit colleges investing in and strengthening their host communities in mutually beneficial ways that do not involve direct payments in lieu of taxes (PILOTs).

Worth Studying
The Social Wellbeing of New York City's Neighborhoods: The Contribution of Culture and the Arts, Mark J. Stern and Susan C. Seifert, March 2017, presenting landmark research from the University of Pennsylvania School of Social Policy & Practice finding that low- and moderate-income residents in New York City neighborhoods that have access to plentiful cultural resources are healthier, better educated, and safer overall than those in similar communities with fewer creative resources.

Worth Watching
What Makes Someone a Good Ambassador for Your Mission? Maine Association of Nonprofits, March 3, 2017, featuring Andy Robinson sharing his thoughts on what makes a good ambassador or advocate for a nonprofit. (2:15)
Andy Robinson

Worth Studying
Protecting Nonprofit Nonpartisanship | Infographic, National Council of Nonprofits, March 2, 2017

Worth Heeding
“A charity should not arrange, sponsor, or participate in an event, rally, or protest that explicitly supports or opposes any political candidate by name. Charities can and should participate in events supporting or opposing a policy issue in alignment with their mission.”
Charities Participating in Policy and Protest: 2017 and Beyond, Susan Kratz, Nilan Johnson Lewis PA, published inJD Supra Business Advisor, init March 8, 2017.

Numbers in the News
Number of states that adjusted their revenue forecast downward in fiscal year 2017.
Source: “As Capitol Hill Debates Health Care, States Face Troubling Fiscal ‘Uncertainty’,” Quinn Libson in Route Fifty (March 9, 2017).

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