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OMB
Webcast Provides Clarity, Highlights Need for Collaboration with
Nonprofits
The
Uniform Guidance from the White
House Office of Management and Budget will be binding on most of the
contracts and grants between state and local governments and
nonprofits when federal discretionary funding is utilized, according
to government officials during an OMB webcast conducted on October 2.
Presented as a “conversation” among stakeholders, the webcast
provided opportunities for various interests affected by the Uniform
Guidance to raise questions and seek clarity on key topics that have
caused confusion. OMB officials kicked off the event by discussing
how the new Uniform Guidance, among other things, is intended to
lower barriers to entry for smaller nonprofit organizations to
perform services in communities on behalf of governments.
Matt
Hammoudeh, Assistant Secretary at the Illinois Department of Human
Services, discussed the steps taken in Illinois to
implement numerous requirements of the OMB Uniform Guidance and to
change state policies to ensure consistency across government
programs. In responses to questions from David L. Thompson of the
National Council of Nonprofits, Hammoudeh confirmed that the
requirement in the Uniform Guidance for governments to pay nonprofits
their indirect costs is binding on governments at all levels of
contracting and grantmaking, and that nonprofits cannot be asked to
waive their reimbursement rights. The Illinois official also made a
strong statement against arbitrary caps to indirect costs, pointing
out that caps undermine nonprofit innovation and hurt service
delivery. Hammoudeh stressed the importance of the lesson learned by
the state of collaborating with nonprofits at the beginning of the
process to develop the changes needed to implement the OMB Uniform
Guidance. He note that nonprofits are the experts who can identify in
advance the positive and negative impacts that new policies will have
on delivering services in communities. Other panels during the
webcast addressed questions related to audits and internal controls,
procurement, and innovative funding. OMB will post a recording of the webcast within a
week.
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Public
Supports Clear Rules on What Counts as Politicking
A large majority
of American voters (60 percent) believe that having clear rules
defining political activity for social welfare organizations is
important, according to a recent public opinion poll. Eight in 10
voters believe that political operatives and donors take advantage of
vague rules and blurry lines defining what is and is not permitted.
Among voters who had an opinion, a majority favored changing the way
that activities of social welfare nonprofits organized under Section
501(c)(4) of the tax code are regulated to establish clearer and fairer
rules for what counts as partisan political activity. The poll, which
was conducted for Public Citizen and released in
conjunction with the Hudson Institute, comes at a time
when the Internal Revenue Services is seeking to clarify the rules
for 501(c)(4) social welfare nonprofits (as opposed to charitable
nonprofits) and recover from a scandal involving alleged targeting of
various groups based on presumed political leanings.
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Communications
Challenge: When Technology Meets Regulation
Calls and texts
to old cellphone numbers could result in significant liability,
according to legal pleadings in numerous federal class-action
lawsuits. Briefly stated, nonprofits and other callers could
potentially be liable if they make calls or send texts to cellphone
numbers that they previously received authorization to call but,
unbeknownst to the caller, had been reassigned to a new person who
has not given “prior express consent” to receive communications.
According to one report, more than 37 million cellphone numbers have
been reassigned in the past 10 years, so the likelihood of
organizations having old numbers on their records is great. The National Council of Nonprofits filed
comments with the Federal Communications Commission (FCC) asking
for an expedited declaratory judgment confirming that “callers who obtain
prior express consent from a called party are not liable for phone
calls and text messages to telephone numbers for which the caller has
obtained prior express consent, but that have been reassigned without
the caller’s knowledge, or for other types of ‘wrong number’ calls.”
The FCC may rule on the issue this fall.
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Candidate
Forums Connecting Office Seekers with Nonprofit Missions
This
election season several state associations of nonprofits are using
candidate forums in non-partisan ways to educate the voting public
about the candidates and their positions. Providers’ Council in
Massachusetts recently hosted the Human Services Gubernatorial Forum
where four candidates addressed 700 attendees on human services
topics. Significantly, all four candidates expressed their support
for a 2008 statute that was designed to bring human services
reimbursement rates up to market value, but whose full implementation
has been delayed. The video of the event can be found
here. Connecticut Association of Nonprofits co-sponsored the state’s
second 2014 Gubernatorial Debate last
week. Big topics of the debate included economic growth in the state
and education reform. Go here for a recording of the Connecticut debate.
The
“No Vote No Grumble” campaign, of which the Hawai`i Alliance of
Nonprofit Organization is a partner, will hold a gubernatorial candidate forum on
Wednesday, October 8th. The mission of No Vote No Grumble is to
“increase civic engagement, including registering and educating
voters, especially with the underrepresented/underserved
communities.” HANO stresses that this is an important opportunity for
nonprofits to share their community’s concerns with candidates. The Colorado Nonprofit Association
will be holding a forum during its 2014 conference that will focus on
the races for Secretary of State and Attorney General. Colorado’s PBS
station will record and air the forum, giving the public the
opportunity to learn more about the candidates in these “down ticket”
races that often get overlooked. Each forum gives nonprofits the
opportunity to educate policymakers on the work and impact of the
nonprofit community to their respective states and the ways in which
lawmakers can work with nonprofits to identify and promote solutions
in communities.
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Taxing
Student Housing on the Rise
The tax-exempt
status of student housing facilities is under attack in the courts,
at city hall, and in the ballot box. The Texas Supreme Court agreed
last week to decide whether the Texas Student Housing Authority
must pay property taxes on a dorm facility on the campus of Texas
A&M University. County tax assessors had determined that the use
of the facilities during summer months by high school students
disqualified the dorms under Texas law. In Waleska, Georgia, the City
Council is considering a tax on student residence halls at
Reinhardt University, a local nonprofit. The Mayor said that the idea
for the tax on the small Methodist university was proposed by the
state Department of Community Affairs. The city would base the tax on
the state’s hotel-motel tax, but is
awaiting comment from the Attorney General on the legality of the
proposal. Georgia voters in November will also be voting on whether to tax student housing
across all public institutions in the University System of Georgia.
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Taxes,
Fees, PILOTs
- Taxes: A bill in Pennsylvania would
impose real estate taxes on nonprofits owning property valued at
more than $200,000. The bill’s sponsor has repeatedly introduced
measures to tax tax-exempt nonprofits in the Commonwealth based
on the common misconception that taxpayers end
up paying more, but without recognizing the numerous
community benefits of nonprofits, including the lower cost to
governments.
- PILOTS:
Pittsburgh’s Mayor
has proposed his budget for 2015 that assumes $24 million annual contributions,
or payments in lieu of taxes (PILOTs), from the city’s largest
nonprofits. Large landholding nonprofits, such as University of
Pittsburgh Medical Center, have expressed a willingness to negotiate on
contribution size, as long as they are allowed some say in how
the funds will be allocated.
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California
Adopts Paid Sick Leave Employment Policy
Governor Brown
has signed the law requiring
nonprofits and other employers, starting in July 2015, to pay
employees one hour of sick leave for every 30 hours worked. In an
alert to nonprofits, CalNonprofits reports that the
amount of sick time used can be capped by employers at 3 days per
year (24 hours) and any unused sick time at the end of the
rolling-12-month period must be rolled to the next 12-month
period.
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Southern
Voters Consider Income Tax Restrictions
Voters in
Georgia and Tennessee will have the opportunity on November 4 to
alter their states’ constitutions to significantly restrict the power
of their legislatures to levy personal income taxes. Voters in
Georgia will decide on Amendment A, which would permanently
cap the top income tax rate at six percent. Polls show that the
ballot measure has broad popular support. If
approved by voters in Tennessee, Amendment 3 would prohibit
the legislature from levying, authorizing, or
permitting any state or local tax upon payroll or earned personal
income. Critics of both measures argue against removing taxation from
the tools the legislatures have to address economic downturns and
unforeseen challenges.
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Tax
Approved to Fund Philadelphia Schools
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North
Carolina Budget Cuts Demanded
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Because
Now is When Candidates are Paying Attention
The
people and communities served by charitable nonprofits “win”
elections when all the candidates learn about the significant impact
of nonprofits, look to nonprofits as community problem solvers, and
agree with the policy priorities of nonprofit organizations. It’s not
a partisan matter of who gets elected, but about using the elections
to inform candidates and the public about the value of the
contributions of nonprofit organizations. The non-partisan
election-related activities performed by state associations of
nonprofits and many other organizations across the country this
election season are helping to educate voters and promoting good
policy results.
The
lead state article, above, highlights effective non-partisan advocacy
actions in Colorado, Hawai’i, and Massachusetts in using candidate
forums to focus on the work of nonprofits in communities. Other
organizations, like the North Carolina Center for Nonprofits,
are engaging candidates through questionnaires that address a broad
array of issues that will help voters gauge the priorities of each
public office hopeful. Still other nonprofit advocates are sharing
their public policy and legislative agendas with all of the
candidates with the expectation that some will recognize the value,
adopt the priorities, and give public voice to the needs of the
communities that nonprofits serve. In all of these cases the same
strategy is at play: communicate with the candidates about policy
priorities while they are most interested in what constituents think
– from now until election evening.
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Federal Issues
- OMB Uniform Guidance
- 501(c)(4) Partisan
Politicking
- Cell Phone Regulation
State
and Local Issues
- Candidate Forums: CO,
HI, MA
- Taxing Student
Housing: GA (2): TX
- Taxes, Fees, PILOTs:
PA (2)
- Paid Sick Leave: CA
- Constitutional
Amendments: GA, TN
- Public School
Funding: PA
- State Budgets: NC
Advocacy
in Action
♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦
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Nonprofit
VOTE Webinar
Thursday, October
9th at 2:00pm Eastern
Election Day is
just four weeks away. Find out what non-partisan activities your
nonprofit can legally do to encourage voting and help get your
community to the polls. Register Now!
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Survey
Reminder
Protect
Positive Grants Reforms
 In
less than three months, new reforms governing payments to
nonprofits for their indirect costs (overhead) and other
reforms will go into effect. You can help in the development of tools
to turn the promise of the new reforms into reality for your
organization and others by completing this short survey and
encouraging your colleagues at other nonprofits to fill it out as
well.
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Worth
Quoting
“The cost
principles are designed to provide that the Federal awards pay their
fair share of the costs recognized under these principals.”
- Frequently Asked Questions, U.S.
Office of Management and Budget, August 29, 2014, explaining the
underlying reason for the mandate in the OMB Uniform Guidance that
pass-through entities (typically state and local governments)
reimburse nonprofits for their indirect costs.
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Worth
Reading
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Worth
Studying
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Numbers
in the News
On November 4,
voters will decide the following:
435
seats in the U.S. House of Representatives
36
U.S.Senate seats
36
Governorships
31
Attorneys General races
6,049
state legislative seats in 46
states
136
statewide ballot measures in 41
states
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Nonprofit
Events
- Oct. 6-7, Fall Nonprofit Conference,
Colorado Nonprofit Association
- Oct. 7, High Desert Nonprofit Leaders
Conference, Nonprofit Association of Oregon
- Oct. 9-10, Camp Finance, New York
Council of Nonprofits
- Oct. 23, Helping 501(c)(3) organizations
with charitable contributions (a primer), Internal Revenue
Service webinar
- Oct. 28-29, Kentucky Nonprofit Leadership
Forum, Kentucky Nonprofit Network
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