We couldn’t do without them, and this nice reflection from Nonprofit About.com highlights their value to all of us.
An excerpt, with links at the jump..
“I really don't want the post office or mail delivery to go away.
“It's true, I've complained over the years...about grumpy postal employees, long lines to mail packages at the holidays, circling the block waiting for a parking space in tiny post office lots, and the constantly rising cost of stamps.
“But, I've rarely met a post person delivering my mail that I didn't like. I still love checking my mailbox and am sorely disappointed when it's empty. Even junk mail seems somehow comforting.
“I don't mind if the postal service drops Saturday deliveries, closes some post offices, and phases out overnight mail...all actions that are being considered by postal service management and, soon, by congress.
“I just don't want to lose it. Nonprofits, I'm sure, don't want to lose it either. Even though all of our electronic wizardry has helped threaten the USPS, we can't get along without it.
“Direct mail fundraising is still the most widely used and successful of any fundraising technique ever, and think of all the thank you letters, newsletters, and invitations that the nonprofit sector sends daily.”
Showing posts with label Government. Show all posts
Showing posts with label Government. Show all posts
Tuesday, September 20, 2011
Thursday, September 8, 2011
California Nonprofits & Property Taxes
Some interesting developments reported by this story in the New York Times.
An excerpt.
“A growing number of nonprofit groups in California are being denied exemption from property taxes because the state’s chief tax collector and assessors contend they do not do enough to benefit state residents, according to lawyers representing the groups.
“I have a client who applied for the exemption recently and has been denied on the basis that it would not be doing enough to benefit the citizens of California,” said Ofer Lion, a lawyer. Mr. Lion would not name his client, but said it was a new charity with “a global outlook in its mission.”
“They purchased a building in California because they relied on being able to qualify for property tax exemption,” he said. “If it has to pay the tax, it’s not going to go under, but less money will, of course, be available for its mission.”
“No one knows how many nonprofit groups in California have been affected or why the issue has become contentious now, but the state’s budget woes have been mentioned as a likely motive. “It probably has something to do with the economy,” said Stephanie L. Petit, who has clients dealing with the process. “I think regulators are starting to look more closely at organizations that have the property tax exemption.”
“State and local governments have been taking a hard look at nonprofits and the various tax exemptions they receive for the last couple of years, as tax revenues have fallen and the demand for public services has risen.
“Last year, Hawaii tried — and failed — to impose a 1 percent tax on nonprofit groups. Boston has asked nonprofits to pay the city what is essentially a discounted property tax, and Chicago plans to ask nonprofits to start paying water and sewer fees.
“Not surprisingly, such plans run into stiff opposition from nonprofit groups and their political supporters. But in California, the rules on the property tax exemption for nonprofits evolved out of a 1944 ballot initiative, so they are more grounded than in many other places — if not necessarily applied assiduously by county assessors.
“The state has a two-tiered system, in which nonprofits first apply to the Board of Equalization, which collects state-mandated fees, sales and sin taxes and certifies exemption eligibility.”
An excerpt.
“A growing number of nonprofit groups in California are being denied exemption from property taxes because the state’s chief tax collector and assessors contend they do not do enough to benefit state residents, according to lawyers representing the groups.
“I have a client who applied for the exemption recently and has been denied on the basis that it would not be doing enough to benefit the citizens of California,” said Ofer Lion, a lawyer. Mr. Lion would not name his client, but said it was a new charity with “a global outlook in its mission.”
“They purchased a building in California because they relied on being able to qualify for property tax exemption,” he said. “If it has to pay the tax, it’s not going to go under, but less money will, of course, be available for its mission.”
“No one knows how many nonprofit groups in California have been affected or why the issue has become contentious now, but the state’s budget woes have been mentioned as a likely motive. “It probably has something to do with the economy,” said Stephanie L. Petit, who has clients dealing with the process. “I think regulators are starting to look more closely at organizations that have the property tax exemption.”
“State and local governments have been taking a hard look at nonprofits and the various tax exemptions they receive for the last couple of years, as tax revenues have fallen and the demand for public services has risen.
“Last year, Hawaii tried — and failed — to impose a 1 percent tax on nonprofit groups. Boston has asked nonprofits to pay the city what is essentially a discounted property tax, and Chicago plans to ask nonprofits to start paying water and sewer fees.
“Not surprisingly, such plans run into stiff opposition from nonprofit groups and their political supporters. But in California, the rules on the property tax exemption for nonprofits evolved out of a 1944 ballot initiative, so they are more grounded than in many other places — if not necessarily applied assiduously by county assessors.
“The state has a two-tiered system, in which nonprofits first apply to the Board of Equalization, which collects state-mandated fees, sales and sin taxes and certifies exemption eligibility.”
Monday, August 29, 2011
Yes, Tax Increases as a Default Solution
Which is the answer to the question the Sacramento Bee editorial poses “is anything sadder than padlocked pools”.
The other answer presented by the editorial, to give money to the government nonprofit, doesn’t work so well since people have became somewhat questioning with government’s ability to manage money and public services efficiently.
An excerpt from the editorial.
“Swim time is almost over at Sacramento's public pools.
“Only six of 13 city pools opened this summer, and they'll all be closed for the season by Labor Day. Next summer, only three pools are to open. In a city of 466,000, that's a disgrace even in these hard times.
“City Hall needs all the help it can get to keep pools open. But by not asking loudly enough and by not making donations easier, the city is missing out on a potential lifeline.
“Jonathan Rewers, chairman of the city's Parks and Recreation Commission, says the city needs to do a better job of telling the community that public pools are a "vital service." They are also smart policy: If kids aren't frolicking in pools, they could be getting in trouble on the street.
“This is a prime opportunity for a civic-minded corporation to make a sizable gift that would buy priceless good will. Some feelers have gone out, but with no success.
“The city also ought to have a formal matching donation program. If a neighborhood association raises a significant sum – say at least half the $100,000 it costs to run a city pool for a year – the city should come up with the rest.
“Rewers says the city needs to better publicize the donation programs that do exist.
“Gifts to Share, the city's 26-year-old nonprofit partner, is the conduit through which residents, businesses and community groups can support parks and recreation, cultural, education and neighborhood improvement projects. More than $1.2 million went through it last year….
“Rewers and other parks advocates are pushing for a citywide property tax assessment for parks maintenance, including pools, on the 2012 ballot. Residents would get to decide how important keeping up parks and keeping open pools is to them.”
The other answer presented by the editorial, to give money to the government nonprofit, doesn’t work so well since people have became somewhat questioning with government’s ability to manage money and public services efficiently.
An excerpt from the editorial.
“Swim time is almost over at Sacramento's public pools.
“Only six of 13 city pools opened this summer, and they'll all be closed for the season by Labor Day. Next summer, only three pools are to open. In a city of 466,000, that's a disgrace even in these hard times.
“City Hall needs all the help it can get to keep pools open. But by not asking loudly enough and by not making donations easier, the city is missing out on a potential lifeline.
“Jonathan Rewers, chairman of the city's Parks and Recreation Commission, says the city needs to do a better job of telling the community that public pools are a "vital service." They are also smart policy: If kids aren't frolicking in pools, they could be getting in trouble on the street.
“This is a prime opportunity for a civic-minded corporation to make a sizable gift that would buy priceless good will. Some feelers have gone out, but with no success.
“The city also ought to have a formal matching donation program. If a neighborhood association raises a significant sum – say at least half the $100,000 it costs to run a city pool for a year – the city should come up with the rest.
“Rewers says the city needs to better publicize the donation programs that do exist.
“Gifts to Share, the city's 26-year-old nonprofit partner, is the conduit through which residents, businesses and community groups can support parks and recreation, cultural, education and neighborhood improvement projects. More than $1.2 million went through it last year….
“Rewers and other parks advocates are pushing for a citywide property tax assessment for parks maintenance, including pools, on the 2012 ballot. Residents would get to decide how important keeping up parks and keeping open pools is to them.”
Wednesday, May 25, 2011
Catholic Charitable Works
Catholic Charities is the largest private nonprofit provider of charitable work in the United States only surpassed by the federal government, and the overall charitable work of the Roman Catholic Church is thought by many to be the largest source of charitable help in the world.
For many years, committed Catholics have struggled with the wandering missions of many of its most historical charitable efforts, but lately, that has begun to change, as this story from the Catholic News Agency reports on the changes in one of the largest of them, Caritas.
An excerpt.
“Rome, Italy, May 24, 2011 / 11:35 am (CNA/EWTN News).- The goal of a new slogan adopted by the Vatican’s official charity is being called “unrealistic” by the Church official charged with overseeing the organization.
“Cardinal Robert Sarah said he doesn’t understand Caritas International’s new theme –
“One Human Family – Zero Poverty,” which was unveiled at the charity’s annual meeting this week in Rome.
“I think it would be wise not to follow some unrealistic slogans. But, I'm very hesitant to understand what zero poverty means, because Christ said we will always have the poor. So, what is a realistic way we can fight the poverty? But, it's difficult to absolutely cancel out poverty,” he told CNA May 22.
“The slogan is both the theme for this week’s conference and for the organization’s strategic document for the next four years.
“The cardinal’s comments come at a difficult time for Caritas. The organization faces criticism from Cardinal Sarah, president of the Pontifical Council Cor Unum, and others for a perceived lack of Catholic identity.
“Earlier this year, the Vatican blocked Caritas’ current general secretary, Lesley-Anne Knight, from running for re-appointment to her post. The charity’s governance is also being revamped to give Vatican officials more control over its work.
“Cardinal Sarah alluded to these concerns in his opening remarks at the Caritas meeting on Sunday, which was attended by roughly 300 delegates.
“I believe it is important to understand that our charitable organizations are located within the Church and not alongside her,” he said.
“A Caritas that wasn’t an ecclesial expression would have no meaning or existence. The Church cannot be considered as a partner of Catholic organizations. They are the organizations that take part in her mission.”
“He also stressed that the agency’s work is “not merely philanthropic” but above all “entails giving back to human persons all their dignity as children of God.”
For many years, committed Catholics have struggled with the wandering missions of many of its most historical charitable efforts, but lately, that has begun to change, as this story from the Catholic News Agency reports on the changes in one of the largest of them, Caritas.
An excerpt.
“Rome, Italy, May 24, 2011 / 11:35 am (CNA/EWTN News).- The goal of a new slogan adopted by the Vatican’s official charity is being called “unrealistic” by the Church official charged with overseeing the organization.
“Cardinal Robert Sarah said he doesn’t understand Caritas International’s new theme –
“One Human Family – Zero Poverty,” which was unveiled at the charity’s annual meeting this week in Rome.
“I think it would be wise not to follow some unrealistic slogans. But, I'm very hesitant to understand what zero poverty means, because Christ said we will always have the poor. So, what is a realistic way we can fight the poverty? But, it's difficult to absolutely cancel out poverty,” he told CNA May 22.
“The slogan is both the theme for this week’s conference and for the organization’s strategic document for the next four years.
“The cardinal’s comments come at a difficult time for Caritas. The organization faces criticism from Cardinal Sarah, president of the Pontifical Council Cor Unum, and others for a perceived lack of Catholic identity.
“Earlier this year, the Vatican blocked Caritas’ current general secretary, Lesley-Anne Knight, from running for re-appointment to her post. The charity’s governance is also being revamped to give Vatican officials more control over its work.
“Cardinal Sarah alluded to these concerns in his opening remarks at the Caritas meeting on Sunday, which was attended by roughly 300 delegates.
“I believe it is important to understand that our charitable organizations are located within the Church and not alongside her,” he said.
“A Caritas that wasn’t an ecclesial expression would have no meaning or existence. The Church cannot be considered as a partner of Catholic organizations. They are the organizations that take part in her mission.”
“He also stressed that the agency’s work is “not merely philanthropic” but above all “entails giving back to human persons all their dignity as children of God.”
Friday, May 13, 2011
Nonprofit Works to Merge Towns
A great reminder of how an innovative nonprofit organization can impact public policy comes to us from New Jersey, as reported by the Daily Record.
An excerpt.
“MENDHAM — Forces are converging to unite both Mendhams, both Chesters and Washington Township under one municipal government and one school system.
“It is a plan Gina Genovese, co-founder of Courage to Connect NJ, encouraged Wednesday at a Mendham Borough Library forum that drew two dozen homeowners.
“The nonprofit, which has given some 30 presentations statewide since it formed last year, is pushing the idea that true savings occur when five to 10 municipalities connect by sharing a government and keeping their individual identities as neighborhoods.
“A band of 15 residents from the Chesters and Mendhams, now emerging publicly as the Mendham Chester Alliance, said at the forum that they have calculated that uniting their four municipalities under one government and one school system would save $32 million a year.
“If you adjust the tax formula and make it the same for each town, that’s about a 30 percent savings on everybody’s taxes,” said Bruce Flitcroft of Mendham Township, the chief executive officer of Alliant Technologies and an alliance member. “That’s huge. How do you argue with it?”
An excerpt.
“MENDHAM — Forces are converging to unite both Mendhams, both Chesters and Washington Township under one municipal government and one school system.
“It is a plan Gina Genovese, co-founder of Courage to Connect NJ, encouraged Wednesday at a Mendham Borough Library forum that drew two dozen homeowners.
“The nonprofit, which has given some 30 presentations statewide since it formed last year, is pushing the idea that true savings occur when five to 10 municipalities connect by sharing a government and keeping their individual identities as neighborhoods.
“A band of 15 residents from the Chesters and Mendhams, now emerging publicly as the Mendham Chester Alliance, said at the forum that they have calculated that uniting their four municipalities under one government and one school system would save $32 million a year.
“If you adjust the tax formula and make it the same for each town, that’s about a 30 percent savings on everybody’s taxes,” said Bruce Flitcroft of Mendham Township, the chief executive officer of Alliant Technologies and an alliance member. “That’s huge. How do you argue with it?”
Monday, April 25, 2011
Criminal Justice Program Funding
For programs who work to help prisoners reentering society, a major source of federal funding for those efforts appears to be on track to receive almost as much funding as last year, as reported by the National Reentry Resource Center.
An excerpt.
“On Thursday the House passed the continuing resolution (CR) for the rest of the fiscal year by a 260-167 vote. The Senate followed quickly with a 81-19 vote, avoiding a government shutdown.
“All Department of Justice (DOJ) programs were cut by 17 percent. Several programs were exempt from this cut, including the Office of Violence Against Women, National Institute of Justice, Bureau of Justice Statistics, Regional Information Sharing Systems, Justice for All, and the National Center for Missing and Exploited Children’s programs.
“Council of State Government Justice Center priority programs—the Second Chance Act program, the Mentally Ill Offender Treatment and Crime Reduction Act (MIOTCRA) program, and the Justice Reinvestment program—fall under state and local law enforcement assistance programs, which were cut by $434 million from the FY10 levels."
An excerpt.
“On Thursday the House passed the continuing resolution (CR) for the rest of the fiscal year by a 260-167 vote. The Senate followed quickly with a 81-19 vote, avoiding a government shutdown.
“All Department of Justice (DOJ) programs were cut by 17 percent. Several programs were exempt from this cut, including the Office of Violence Against Women, National Institute of Justice, Bureau of Justice Statistics, Regional Information Sharing Systems, Justice for All, and the National Center for Missing and Exploited Children’s programs.
“Council of State Government Justice Center priority programs—the Second Chance Act program, the Mentally Ill Offender Treatment and Crime Reduction Act (MIOTCRA) program, and the Justice Reinvestment program—fall under state and local law enforcement assistance programs, which were cut by $434 million from the FY10 levels."
Saturday, April 16, 2011
Nonprofits & Government Funding
As I have long advocated, nonprofits funded by the government should make the strongest effort to build a private philanthropic base to carry them over when political and budgetary decisions can—which they will continually—threaten their funding stream.
The current situation, as reported by The Chronicle of Philanthropy, is certainly one of those times.
An excerpt.
“As lawmakers and President Obama intensify their efforts to close the federal deficit, nearly every kind of nonprofit program financed by the government will have to fight to keep the budget scalpel at bay.
“This month’s battle over how much the government will spend in the 2011 fiscal year, which is more than half over, and a plan for the 2012 budget released by House Republicans both sent the message that programs to help low-income people, promote the arts, alleviate poverty overseas, and provide a range of other services will face a tough time preserving current levels of spending.
“In a compromise over the 2011 budget, Congressional leaders and the White House agreed to cut almost $40-billion from 2010 spending, leaving few non-defense programs untouched.
“In addition to an across-the-board cut of 0.2 percent, the plan--approved by both the House and Senate on Thursday--will trim money for the arts, community health centers, family planning, international aid programs, legal services for the poor, national service, and other areas that provide aid to nonprofits and the people they serve.
“The cuts were not as deep as the Republicans who control the House had sought, but many lawmakers have made it clear that their battle to cut the size of the federal government has only begun.”
The current situation, as reported by The Chronicle of Philanthropy, is certainly one of those times.
An excerpt.
“As lawmakers and President Obama intensify their efforts to close the federal deficit, nearly every kind of nonprofit program financed by the government will have to fight to keep the budget scalpel at bay.
“This month’s battle over how much the government will spend in the 2011 fiscal year, which is more than half over, and a plan for the 2012 budget released by House Republicans both sent the message that programs to help low-income people, promote the arts, alleviate poverty overseas, and provide a range of other services will face a tough time preserving current levels of spending.
“In a compromise over the 2011 budget, Congressional leaders and the White House agreed to cut almost $40-billion from 2010 spending, leaving few non-defense programs untouched.
“In addition to an across-the-board cut of 0.2 percent, the plan--approved by both the House and Senate on Thursday--will trim money for the arts, community health centers, family planning, international aid programs, legal services for the poor, national service, and other areas that provide aid to nonprofits and the people they serve.
“The cuts were not as deep as the Republicans who control the House had sought, but many lawmakers have made it clear that their battle to cut the size of the federal government has only begun.”
Wednesday, March 16, 2011
Light on Nonprofits
Paul Light is one of the more astute observers of the nonprofit sector and his recent article in the Washington Post examines the current winnowing of the sector—especially among small grassroots organizations—resulting from the tightening of government funding which all too many of the small groups are dependent on.
An excerpt.
“The nation's nonprofit sector is a leading indicator of economic collapse and recovery. It tightens first as anxious donors hold onto their dollars, and rebounds last as anxieties finally fade.
“In between the starts and stops, the sector bears the brunt of increasing demand, budget cuts and delayed payments. Reserves begin to disappear, credit lines evaporate and volunteers become clients. Asked to do much more with far less, many nonprofits end up trying to do almost everything with nothing.
“The nonprofit sector is not about to disappear, of course. It's a major industry in its own right with 11 million employees, 63 million volunteers and $1.5 trillion in annual income.
“Nevertheless, there is growing evidence that many nonprofits closed their doors over the past three years, while others are about to do so. In 2008, I estimated that 100,000 of the nation's 1 million tax-exempt nonprofits could go under during the recession. Those exits may or may not be offset by the creation of new nonprofits, but there seems to be little doubt that much of the deforestation is now occurring in low-income communities where service deserts are swallowing up thousands of relatively small community-based organizations. If we could map decimation by census tracks, we'd see the deserts popping up in all the familiar neighborhoods--the ones where the most vulnerable Americans live.”
An excerpt.
“The nation's nonprofit sector is a leading indicator of economic collapse and recovery. It tightens first as anxious donors hold onto their dollars, and rebounds last as anxieties finally fade.
“In between the starts and stops, the sector bears the brunt of increasing demand, budget cuts and delayed payments. Reserves begin to disappear, credit lines evaporate and volunteers become clients. Asked to do much more with far less, many nonprofits end up trying to do almost everything with nothing.
“The nonprofit sector is not about to disappear, of course. It's a major industry in its own right with 11 million employees, 63 million volunteers and $1.5 trillion in annual income.
“Nevertheless, there is growing evidence that many nonprofits closed their doors over the past three years, while others are about to do so. In 2008, I estimated that 100,000 of the nation's 1 million tax-exempt nonprofits could go under during the recession. Those exits may or may not be offset by the creation of new nonprofits, but there seems to be little doubt that much of the deforestation is now occurring in low-income communities where service deserts are swallowing up thousands of relatively small community-based organizations. If we could map decimation by census tracks, we'd see the deserts popping up in all the familiar neighborhoods--the ones where the most vulnerable Americans live.”
Friday, March 4, 2011
Public Pensions
An article from the California Chamber of Commerce, reporting on a Little Hoover Commission report, that if followed, would impact public pensions substantially, might also impact those from the nonprofit sector.
An excerpt.
“(March 4, 2011) With the debate over public sector pension costs roiling the nation, a bipartisan, independent state commission released a report charting a bold path for pension reforms that would create both short- and long-term budget savings.
“The Little Hoover Commission unanimously adopted Public Pensions for Retirement Security, calling for legislative action to establish the legal authority to allow state and local governments to freeze pension benefits for current workers, and allowing those workers to accrue future benefits under more sustainable pension plans.
“Reform for Current Workforce
“After 10 months of public hearings and background research, commissioners concluded that California’s pension crisis cannot be solved without addressing the obligations of current employees, many of whom have accrued generous benefits augmented during the go-go years of the dot.com and real estate bubbles.
“Without doubt, the proposal will face significant political and legal hurdles. But ignoring the burden that the current obligations place on government budgets and on taxpayers is like pretending the underwater earthquake won’t create a tsunami. The disaster will happen; the only question is how soon. In the words of the commission’s report, “Pension costs will crush government.”
“The commission included a number of forward-looking reforms, too. It recommended a “hybrid” pension model that combines a lower defined-benefit pension formula with an employer-matched and risk-managed defined-contribution plan.
“The commission also suggested that the state explore extending Social Security old-age benefits to uncovered state and local employees, as is the case with the federal workforce.”
An excerpt.
“(March 4, 2011) With the debate over public sector pension costs roiling the nation, a bipartisan, independent state commission released a report charting a bold path for pension reforms that would create both short- and long-term budget savings.
“The Little Hoover Commission unanimously adopted Public Pensions for Retirement Security, calling for legislative action to establish the legal authority to allow state and local governments to freeze pension benefits for current workers, and allowing those workers to accrue future benefits under more sustainable pension plans.
“Reform for Current Workforce
“After 10 months of public hearings and background research, commissioners concluded that California’s pension crisis cannot be solved without addressing the obligations of current employees, many of whom have accrued generous benefits augmented during the go-go years of the dot.com and real estate bubbles.
“Without doubt, the proposal will face significant political and legal hurdles. But ignoring the burden that the current obligations place on government budgets and on taxpayers is like pretending the underwater earthquake won’t create a tsunami. The disaster will happen; the only question is how soon. In the words of the commission’s report, “Pension costs will crush government.”
“The commission included a number of forward-looking reforms, too. It recommended a “hybrid” pension model that combines a lower defined-benefit pension formula with an employer-matched and risk-managed defined-contribution plan.
“The commission also suggested that the state explore extending Social Security old-age benefits to uncovered state and local employees, as is the case with the federal workforce.”
Friday, February 25, 2011
Programs That Work
Many of the nonprofit organizations that are primarily funded by government are seeing their funds shrink or at worst, disappear, as government struggles with less revenue.
This article from Governing suggests ways to determine what programs work before reducing or removing funding, which is a very good idea.
An excerpt.
“Nearly all states have imposed some level of budget cuts -- some quite deep -- since the recession began in 2008. But very few have established systematic ways of sorting programs that are working from those that aren't.
“That's problematic. Without a serious evaluation of program effectiveness, politics tend to dictate important budget decisions, and arguments over stakeholder interests and political palatability drown out important questions of real-world impact.
“As a result, states and cities respond to record budget shortfalls with across-the-board cuts, and some vital public services end up on the chopping block unnecessarily.
“That's why we've developed the "Reviewing What Works" tools, a process for evaluating the effectiveness of government programs. They are part of a Center for American Progress report entitled The Secret to Programs that Work.
“The key to the Reviewing What Works approach is an interagency assessment of effectiveness with specific, concrete steps to compare various programs. The tools include a series of basic questions that should be asked of every existing program: What impact has it had on the problem it's trying to solve? How does it compare to other programs with similar goals? Is it well run?
“Given the grim budget picture, statehouses need to focus on cost effectiveness.
"Openly measuring the performance of our public institutions, and communicating that performance to citizens, has never been more important," Maryland Gov. Martin O'Malley said at Governing magazine's annual Outlook in the States and Localities conference. "The states that win will be the states that...manage for results."
This article from Governing suggests ways to determine what programs work before reducing or removing funding, which is a very good idea.
An excerpt.
“Nearly all states have imposed some level of budget cuts -- some quite deep -- since the recession began in 2008. But very few have established systematic ways of sorting programs that are working from those that aren't.
“That's problematic. Without a serious evaluation of program effectiveness, politics tend to dictate important budget decisions, and arguments over stakeholder interests and political palatability drown out important questions of real-world impact.
“As a result, states and cities respond to record budget shortfalls with across-the-board cuts, and some vital public services end up on the chopping block unnecessarily.
“That's why we've developed the "Reviewing What Works" tools, a process for evaluating the effectiveness of government programs. They are part of a Center for American Progress report entitled The Secret to Programs that Work.
“The key to the Reviewing What Works approach is an interagency assessment of effectiveness with specific, concrete steps to compare various programs. The tools include a series of basic questions that should be asked of every existing program: What impact has it had on the problem it's trying to solve? How does it compare to other programs with similar goals? Is it well run?
“Given the grim budget picture, statehouses need to focus on cost effectiveness.
"Openly measuring the performance of our public institutions, and communicating that performance to citizens, has never been more important," Maryland Gov. Martin O'Malley said at Governing magazine's annual Outlook in the States and Localities conference. "The states that win will be the states that...manage for results."
Friday, February 18, 2011
Program Needs Replication
Turning over job development efforts—from government to a nonprofit— as the Columbus Dispatch reports, makes perfect sense, as the connection to the private sector, the largest producer of jobs in the American economy, will be strengthened.
An excerpt.
“Gov. John Kasich will set in motion one of his key campaign promises when he signs a bill Friday allowing him to privatize Ohio's economic-development efforts.
“Swift action by state lawmakers culminated yesterday in a bipartisan vote in the Senate and another contentious debate in the House over whether JobsOhio, the new nonprofit corporation, would be constitutionally sound and transparent enough to avoid scandal.
“The bill "will enable Ohio to begin the process of fielding a top-flight development team that speaks the language of business and moves at the rapid pace of today's world economy," said Sen. Mark Wagoner, R-Toledo.
“The bill allows Kasich's team, headed by his development director, California venture capitalist Mark Kvamme, to replace the Department of Development with a nonprofit corporation headed by a board of business leaders appointed by the governor.
“Kvamme and other supporters, including a number of business groups, have argued that Ohio's current economic-development efforts are not fast or flexible enough to keep up with competition from other states and countries for jobs.
“The board would use potentially hundreds of millions of dollars in publicly funded incentives to help attract jobs and grow companies. It also plans to raise millions in private dollars that can be used to take equity in companies, with the goal of one day making JobsOhio a self-sustaining entity.
“House Democrats said Kasich suggested to them in a closed-door meeting on Tuesday that the state might direct some money from the sale or lease of the turnpike to JobsOhio, which they said raised constitutional questions.
“Republicans called JobsOhio a vital first step toward stopping the state's economic slide.
"Ohio must embrace new, innovative job-creation methods, and with JobsOhio we will be able to pursue economic opportunities otherwise unattainable through our outdated development structure," Kasich said in a statement.
“The Senate passed the bill 31-2 with wide Democratic support, after majority Republicans agreed to a number of changes that strengthened or clarified provisions related to JobsOhio operations.”
An excerpt.
“Gov. John Kasich will set in motion one of his key campaign promises when he signs a bill Friday allowing him to privatize Ohio's economic-development efforts.
“Swift action by state lawmakers culminated yesterday in a bipartisan vote in the Senate and another contentious debate in the House over whether JobsOhio, the new nonprofit corporation, would be constitutionally sound and transparent enough to avoid scandal.
“The bill "will enable Ohio to begin the process of fielding a top-flight development team that speaks the language of business and moves at the rapid pace of today's world economy," said Sen. Mark Wagoner, R-Toledo.
“The bill allows Kasich's team, headed by his development director, California venture capitalist Mark Kvamme, to replace the Department of Development with a nonprofit corporation headed by a board of business leaders appointed by the governor.
“Kvamme and other supporters, including a number of business groups, have argued that Ohio's current economic-development efforts are not fast or flexible enough to keep up with competition from other states and countries for jobs.
“The board would use potentially hundreds of millions of dollars in publicly funded incentives to help attract jobs and grow companies. It also plans to raise millions in private dollars that can be used to take equity in companies, with the goal of one day making JobsOhio a self-sustaining entity.
“House Democrats said Kasich suggested to them in a closed-door meeting on Tuesday that the state might direct some money from the sale or lease of the turnpike to JobsOhio, which they said raised constitutional questions.
“Republicans called JobsOhio a vital first step toward stopping the state's economic slide.
"Ohio must embrace new, innovative job-creation methods, and with JobsOhio we will be able to pursue economic opportunities otherwise unattainable through our outdated development structure," Kasich said in a statement.
“The Senate passed the bill 31-2 with wide Democratic support, after majority Republicans agreed to a number of changes that strengthened or clarified provisions related to JobsOhio operations.”
Thursday, February 10, 2011
American Philanthropy
As a result of working on yesterday’s post I came across an excellent article by Heather Mac Donald in City Journal focusing on the efforts to infuse American Philanthropy with identity politics.
An excerpt.
“American philanthropy is the envy of the world. Since colonial times, when Benjamin Franklin’s Junto Society, a proto–think tank of public-minded Philadelphia citizens, developed volunteer fire departments and a lending library, Americans have evolved a unique civic culture of giving and entrepreneurial problem solving. From 1995 to 2002, charitable donations as a percentage of GDP were nearly six times higher in the United States than in France and 14 times higher than in Germany. In 2007, America’s charitable giving amounted to $306 billion. No wonder that European universities and arts organizations look first to their American alumni and patrons for support when their government funding dries up.
“Yet American generosity is under fire. A growing number of activists and politicians argue that foundations should meet diversity targets in their giving and on their staffs. If foundations fail to diversify “voluntarily,” threaten the race, ethnicity, and gender enforcers, they risk legislation requiring them to do so. In other words, the diversity police, having helped bring on the subprime meltdown through mortgage-lending quotas, now want to fix philanthropy. And instead of rebuffing this power grab, the leaders in the field have rolled over and played dead.
“The idea that foundations should view the world through the trivializing lens of identity politics dates back to the 1980s, when some liberal foundations, including the Ford Foundation, started asking groups seeking grants to report the race and sex of their staff and board members. But today, politicians are getting into the act. This latest diversity push began in 2005, when the Greenlining Institute, a “multiethnic advocacy group” in Berkeley, started pumping out studies claiming that foundations were ignoring “communities of color.” (This despite the fact that in California, 39 percent of large foundations’ grants primarily benefit minorities, according to the Foundation Center, a respected research body.) Greenlining’s definition of helping a community of color: bestowing foundation grants on a nonprofit whose staff and board are at least 50 percent minority. In other words, the Greenlining effort is purely a jobs racket. The racial composition of a nonprofit’s staff and board has exactly zero relation to whether it is actually helping minorities. Agronomists supported by the Rockefeller and Ford Foundations helped wipe out famine in Southeast Asia by developing high-yield cereal crops; pressure to diversify their labs would have hindered their research, not advanced it.”
An excerpt.
“American philanthropy is the envy of the world. Since colonial times, when Benjamin Franklin’s Junto Society, a proto–think tank of public-minded Philadelphia citizens, developed volunteer fire departments and a lending library, Americans have evolved a unique civic culture of giving and entrepreneurial problem solving. From 1995 to 2002, charitable donations as a percentage of GDP were nearly six times higher in the United States than in France and 14 times higher than in Germany. In 2007, America’s charitable giving amounted to $306 billion. No wonder that European universities and arts organizations look first to their American alumni and patrons for support when their government funding dries up.
“Yet American generosity is under fire. A growing number of activists and politicians argue that foundations should meet diversity targets in their giving and on their staffs. If foundations fail to diversify “voluntarily,” threaten the race, ethnicity, and gender enforcers, they risk legislation requiring them to do so. In other words, the diversity police, having helped bring on the subprime meltdown through mortgage-lending quotas, now want to fix philanthropy. And instead of rebuffing this power grab, the leaders in the field have rolled over and played dead.
“The idea that foundations should view the world through the trivializing lens of identity politics dates back to the 1980s, when some liberal foundations, including the Ford Foundation, started asking groups seeking grants to report the race and sex of their staff and board members. But today, politicians are getting into the act. This latest diversity push began in 2005, when the Greenlining Institute, a “multiethnic advocacy group” in Berkeley, started pumping out studies claiming that foundations were ignoring “communities of color.” (This despite the fact that in California, 39 percent of large foundations’ grants primarily benefit minorities, according to the Foundation Center, a respected research body.) Greenlining’s definition of helping a community of color: bestowing foundation grants on a nonprofit whose staff and board are at least 50 percent minority. In other words, the Greenlining effort is purely a jobs racket. The racial composition of a nonprofit’s staff and board has exactly zero relation to whether it is actually helping minorities. Agronomists supported by the Rockefeller and Ford Foundations helped wipe out famine in Southeast Asia by developing high-yield cereal crops; pressure to diversify their labs would have hindered their research, not advanced it.”
Wednesday, February 9, 2011
Philanthropy & Government
There is an accepted level of tension between the two, but as government extends its reach deeper and deeper into work generally associated with private philanthropy—and without much programmatic success—the tension increases.
That is the subject of a new book—which I have just begun to read—Generosity Unbound: How American Philanthropy Can Strengthen the Economy and Expand the Middle Class reviewed in City Journal.
An excerpt.
“The past decade has been a disquieting one for private philanthropic foundations in the United States. Not in a pecuniary sense: while foundation endowments were hit hard in 2008 and 2009, the last ten years have brought plenty of new wealth and energy into philanthropy. On the regulatory front, though, foundations have faced years of uncertainty about heightened government intrusion.
“In 2004, the Senate Finance Committee raised the prospect of new regulations as part of its examination of accountability at philanthropic organizations. And in 2008, most significantly, a bill introduced into the California legislature would have required large foundations in the state to provide information on the racial composition of their boards, staff, and grantees. This episode, known as “Greenlining” after the organization whose work inspired the pending legislation, resulted in an extortive deal, whereby the largest foundations in the state set aside $30 million for minority-led nonprofits; the legislation then died.
“The next year, the influential National Committee for Responsive Philanthropy (NCRP), which receives funding from private foundations, issued a report claiming to outline “philanthropy at its best.” The substance of such grant-making, according to NCRP, requires that foundations dedicate 50 percent of their spending to organizations that help “marginalized” populations, and another 25 percent to social-justice “advocacy.” Many foundations expressed dismay, albeit quietly, that their grant-making in areas such as the arts and health care would not meet such arbitrary standards.
“Several state legislators around the country have expressed interest in pursuing their own “Greenlining” strategy. One California congressman articulated the worldview behind these episodes: foundation dollars, he asserted, are really just “earmarks.” Because foundations enjoy favorable tax status and are devoted to public benefit, their philanthropic funds are “public money.”
“This is quite the rhetorical trick. As Claire Gaudiani writes in her new book, Generosity Unbound: “There are great dangers in treating foundation assets as a piggybank. Foundation endowments are private property held for the public benefit according to the donor’s intent. Tax deductions for charitable donations were established to provide an incentive to sustain our tradition of citizen generosity. . . . Deductible contributions do not, however, make foundation endowments any more public than are the homes of citizens who have elected to deduct their mortgage-interest payments from their taxes.”
“Gaudiani’s book is a patient explanation of the enduring vitality of American philanthropy and an all-too-necessary reminder to policymakers and critics across the political spectrum that government is not, and never can be, a substitute for private philanthropy. Prompted to write the book by the Greenlining episode and the NCRP report, she seeks to ground philanthropy in the values of the Declaration of Independence and insulate it from efforts at government expropriation.”
That is the subject of a new book—which I have just begun to read—Generosity Unbound: How American Philanthropy Can Strengthen the Economy and Expand the Middle Class reviewed in City Journal.
An excerpt.
“The past decade has been a disquieting one for private philanthropic foundations in the United States. Not in a pecuniary sense: while foundation endowments were hit hard in 2008 and 2009, the last ten years have brought plenty of new wealth and energy into philanthropy. On the regulatory front, though, foundations have faced years of uncertainty about heightened government intrusion.
“In 2004, the Senate Finance Committee raised the prospect of new regulations as part of its examination of accountability at philanthropic organizations. And in 2008, most significantly, a bill introduced into the California legislature would have required large foundations in the state to provide information on the racial composition of their boards, staff, and grantees. This episode, known as “Greenlining” after the organization whose work inspired the pending legislation, resulted in an extortive deal, whereby the largest foundations in the state set aside $30 million for minority-led nonprofits; the legislation then died.
“The next year, the influential National Committee for Responsive Philanthropy (NCRP), which receives funding from private foundations, issued a report claiming to outline “philanthropy at its best.” The substance of such grant-making, according to NCRP, requires that foundations dedicate 50 percent of their spending to organizations that help “marginalized” populations, and another 25 percent to social-justice “advocacy.” Many foundations expressed dismay, albeit quietly, that their grant-making in areas such as the arts and health care would not meet such arbitrary standards.
“Several state legislators around the country have expressed interest in pursuing their own “Greenlining” strategy. One California congressman articulated the worldview behind these episodes: foundation dollars, he asserted, are really just “earmarks.” Because foundations enjoy favorable tax status and are devoted to public benefit, their philanthropic funds are “public money.”
“This is quite the rhetorical trick. As Claire Gaudiani writes in her new book, Generosity Unbound: “There are great dangers in treating foundation assets as a piggybank. Foundation endowments are private property held for the public benefit according to the donor’s intent. Tax deductions for charitable donations were established to provide an incentive to sustain our tradition of citizen generosity. . . . Deductible contributions do not, however, make foundation endowments any more public than are the homes of citizens who have elected to deduct their mortgage-interest payments from their taxes.”
“Gaudiani’s book is a patient explanation of the enduring vitality of American philanthropy and an all-too-necessary reminder to policymakers and critics across the political spectrum that government is not, and never can be, a substitute for private philanthropy. Prompted to write the book by the Greenlining episode and the NCRP report, she seeks to ground philanthropy in the values of the Declaration of Independence and insulate it from efforts at government expropriation.”
Friday, February 4, 2011
Redevelopment Funds
As many states, ours is one, debate the future of redevelopment funds which have driven some urban development for several years, it is worthwhile to consider, as this article from the Wall Street Journal does, allowing the effort to become a nonprofit enterprise.
An excerpt.
“Some cash-strapped states have identified another job they want to shift to the private sector: economic development.
“A number of governors are working to turn their development offices into some form of nonprofit private entity, a move that would transfer the task of giving out state grants, tax breaks and other economic incentives from the hands of government.
“The idea, which has as much to do with economic philosophies as with saving money, is mainly gaining ground in states with Republican governors, including Ohio, Wisconsin, Iowa and Arizona.
"It's a matter of greater flexibility and the ability to act more like a chamber [of commerce] rather than a state agency," said Wisconsin's new Republican governor Scott Walker, adding that private groups are better equipped to create jobs and attract companies.
“As tax revenue has shriveled in recent years, cities and states have moved to privatize various operations, such as state-run liquor stores, local libraries and parking meters.
“Seven states, including Michigan and Florida, already have some form of private group filling the economic-development role. Critics say handing this power to a private entity can create conflicts of interest, because the nonprofits usually have boards made up of public officials and private business leaders. This can create conflicts as these boards help steer tax breaks and incentives.
“Also, in many cases private economic-development agencies aren't subject to the same standards for public disclosure as government agencies, even though they receive government money. In Ohio, where newly elected Gov. John Kasich has proposed dissolving the state's Department of Development and creating an entity called JobsOhio, lawmakers have pushed to increase disclosures and allow the state's inspector general to investigate the proposed entity.
“Advocates say it makes sense to separate the task of creating jobs from large government agencies that often have a broader mission. In Wisconsin, the current Department of Commerce has responsibility for regulation as well as economic development. Among the 400 employees in Ohio's Department of Development, 60 are focused on economic development; the balance handle areas including homeless programs, community development and home energy assistance.”
An excerpt.
“Some cash-strapped states have identified another job they want to shift to the private sector: economic development.
“A number of governors are working to turn their development offices into some form of nonprofit private entity, a move that would transfer the task of giving out state grants, tax breaks and other economic incentives from the hands of government.
“The idea, which has as much to do with economic philosophies as with saving money, is mainly gaining ground in states with Republican governors, including Ohio, Wisconsin, Iowa and Arizona.
"It's a matter of greater flexibility and the ability to act more like a chamber [of commerce] rather than a state agency," said Wisconsin's new Republican governor Scott Walker, adding that private groups are better equipped to create jobs and attract companies.
“As tax revenue has shriveled in recent years, cities and states have moved to privatize various operations, such as state-run liquor stores, local libraries and parking meters.
“Seven states, including Michigan and Florida, already have some form of private group filling the economic-development role. Critics say handing this power to a private entity can create conflicts of interest, because the nonprofits usually have boards made up of public officials and private business leaders. This can create conflicts as these boards help steer tax breaks and incentives.
“Also, in many cases private economic-development agencies aren't subject to the same standards for public disclosure as government agencies, even though they receive government money. In Ohio, where newly elected Gov. John Kasich has proposed dissolving the state's Department of Development and creating an entity called JobsOhio, lawmakers have pushed to increase disclosures and allow the state's inspector general to investigate the proposed entity.
“Advocates say it makes sense to separate the task of creating jobs from large government agencies that often have a broader mission. In Wisconsin, the current Department of Commerce has responsibility for regulation as well as economic development. Among the 400 employees in Ohio's Department of Development, 60 are focused on economic development; the balance handle areas including homeless programs, community development and home energy assistance.”
Wednesday, January 26, 2011
IRS Form 990-N Threshold Increased
This is very good news, reported by Guidestar.
An excerpt.
“The IRS reminds smaller nonprofits that a higher filing threshold has gone into effect for Form 990-N; invites smaller businesses, including nonprofits, to attend a free webinar on the Small Business Health Care Tax Credit; has published new fees for exempt organizations for 2011; and has released instructions and withholding tables related to the payroll tax cut.
“New Form 990-N Filing Threshold
“The filing threshold for Form 990-N, also known as the ePostcard, has been raised for returns covering the 2010 tax year that are filed in 2011. Most exempt organizations with gross annual receipts of $50,000 or less may now file Form 990-N instead of Form 990-EZ or 990. Private foundations, however, must continue file Form 990-PF, regardless of organization size.
More info here.
An excerpt.
“The IRS reminds smaller nonprofits that a higher filing threshold has gone into effect for Form 990-N; invites smaller businesses, including nonprofits, to attend a free webinar on the Small Business Health Care Tax Credit; has published new fees for exempt organizations for 2011; and has released instructions and withholding tables related to the payroll tax cut.
“New Form 990-N Filing Threshold
“The filing threshold for Form 990-N, also known as the ePostcard, has been raised for returns covering the 2010 tax year that are filed in 2011. Most exempt organizations with gross annual receipts of $50,000 or less may now file Form 990-N instead of Form 990-EZ or 990. Private foundations, however, must continue file Form 990-PF, regardless of organization size.
More info here.
Wednesday, January 19, 2011
Nonprofit Media-Based Ministries
Congress, as reported by the Senate Committee on Finance, is beginning to look more closely at the activities of these groups and what develops could also impact other nonprofit churches and nonprofits in general.
An excerpt.
“WASHINGTON -- Sen. Chuck Grassley, ranking member of the Committee on Finance, today released a staff review of the activities and practices of six media-based ministries and reports concerning other churches and religious organizations referred to the committee. He pursued this review as part of an ongoing effort to strengthen the tax-exempt sector. The review contains a summary of findings and identifies key issues for discussion by stakeholders.
“The tax-exempt sector is so big that from time to time, certain practices draw public concern,” Grassley said. “My goal is to help improve accountability and good governance so tax-exempt groups maintain public confidence in their operations.”
“Grassley said tax-exempt policy involving churches and religious organizations is an area Congress hasn’t looked at in decades. Then-Senator Mark Hatfield’s 1977 request to evangelical groups to be more transparent caused the formation of the Evangelical Council for Financial Accountability (ECFA). Joining this organization has become like a Good Housekeeping seal of approval for those in the evangelical community.
“According to the ECFA, Hatfield issued his request in response to legislation introduced by Rep. Charlie Wilson that would have required certain disclosures by organizations soliciting funds. Similarly, Grassley expects that the issues raised as part of the staff review will generate discussion about increasing accountability among all types of churches and religious organizations, not just evangelical groups. “The staff review sets the stage for a comprehensive discussion among churches and religious organizations. I look forward to helping facilitate this dialogue and fostering an environment for self-reform within the community,” Grassley said.
“Grassley wrote to six media-based ministries in November 2007, based on requests for review from members of the public who wrote to him because of his previous tax-exempt oversight work. In addition, these ministries had received media coverage and attention from watchdog groups. One of the six ministries, Joyce Meyer Ministries, responded fully to Grassley’s inquiry and joined the ECFA in March 2009
. Benny Hinn of World Healing Center Church also provided complete answers to all questions. Both ministries wrote to Grassley to explain they have undertaken significant internal governance reforms. “I appreciate these efforts,” Grassley said. “Self-correction can be more effective than government action. It’s something that’s worked with other entities I’ve looked at, such as the Nature Conservancy and the Smithsonian Institution and some top colleges that were amassing large endowments without increasing student aid.”
An excerpt.
“WASHINGTON -- Sen. Chuck Grassley, ranking member of the Committee on Finance, today released a staff review of the activities and practices of six media-based ministries and reports concerning other churches and religious organizations referred to the committee. He pursued this review as part of an ongoing effort to strengthen the tax-exempt sector. The review contains a summary of findings and identifies key issues for discussion by stakeholders.
“The tax-exempt sector is so big that from time to time, certain practices draw public concern,” Grassley said. “My goal is to help improve accountability and good governance so tax-exempt groups maintain public confidence in their operations.”
“Grassley said tax-exempt policy involving churches and religious organizations is an area Congress hasn’t looked at in decades. Then-Senator Mark Hatfield’s 1977 request to evangelical groups to be more transparent caused the formation of the Evangelical Council for Financial Accountability (ECFA). Joining this organization has become like a Good Housekeeping seal of approval for those in the evangelical community.
“According to the ECFA, Hatfield issued his request in response to legislation introduced by Rep. Charlie Wilson that would have required certain disclosures by organizations soliciting funds. Similarly, Grassley expects that the issues raised as part of the staff review will generate discussion about increasing accountability among all types of churches and religious organizations, not just evangelical groups. “The staff review sets the stage for a comprehensive discussion among churches and religious organizations. I look forward to helping facilitate this dialogue and fostering an environment for self-reform within the community,” Grassley said.
“Grassley wrote to six media-based ministries in November 2007, based on requests for review from members of the public who wrote to him because of his previous tax-exempt oversight work. In addition, these ministries had received media coverage and attention from watchdog groups. One of the six ministries, Joyce Meyer Ministries, responded fully to Grassley’s inquiry and joined the ECFA in March 2009
. Benny Hinn of World Healing Center Church also provided complete answers to all questions. Both ministries wrote to Grassley to explain they have undertaken significant internal governance reforms. “I appreciate these efforts,” Grassley said. “Self-correction can be more effective than government action. It’s something that’s worked with other entities I’ve looked at, such as the Nature Conservancy and the Smithsonian Institution and some top colleges that were amassing large endowments without increasing student aid.”
Wednesday, January 12, 2011
State Budget & Nonprofits
As reported by the Contra Costa Times, the new budget proposed by Governor Brown may result in less money to nonprofits.
An excerpt.
“Local nonprofit groups stretched thin by the recession could be hard-pressed to meet increased demand if nearly $4 billion in proposed cuts to programs for the poor become part of the final state budget.
“The need for food, housing assistance and other services has grown 30 to 40 percent in Contra Costa County since the economic downturn began in 2008, said Larry Sly, executive director of the Concord-based Food Bank of Contra Costa and Solano.
“Food banks, food pantries and housing services have been struggling to keep up with demand, Sly said.
“An influx of clients cut off or with reduced checks from state programs might drastically reduce agencies' ability to offer aid, he said.
“Gov. Jerry Brown's proposed budget released Monday calls for a nearly 25 percent reduction to CalWORKs, which provides income and child care subsidies to low-income families with children.
“The proposal would also eliminate child care grants for 11- and 12-year-olds, for a savings of $750 million.
“Those affected by the cuts likely would seek free food and other services from nonprofit groups, Sly said.”
An excerpt.
“Local nonprofit groups stretched thin by the recession could be hard-pressed to meet increased demand if nearly $4 billion in proposed cuts to programs for the poor become part of the final state budget.
“The need for food, housing assistance and other services has grown 30 to 40 percent in Contra Costa County since the economic downturn began in 2008, said Larry Sly, executive director of the Concord-based Food Bank of Contra Costa and Solano.
“Food banks, food pantries and housing services have been struggling to keep up with demand, Sly said.
“An influx of clients cut off or with reduced checks from state programs might drastically reduce agencies' ability to offer aid, he said.
“Gov. Jerry Brown's proposed budget released Monday calls for a nearly 25 percent reduction to CalWORKs, which provides income and child care subsidies to low-income families with children.
“The proposal would also eliminate child care grants for 11- and 12-year-olds, for a savings of $750 million.
“Those affected by the cuts likely would seek free food and other services from nonprofit groups, Sly said.”
Friday, January 7, 2011
Estate Tax Law
Many nonprofits and especially the associations of nonprofits representing them, have called for retaining and even increasing estate taxes as a method of increasing donations.
I feel this position is counter to the founding roots of the nonprofit sector: built on faith, an American philanthropic culture animated by the donor’s freedom of charitable choice, rather than being spurred by the coercive effect of taxation
Forbes Magazine reports on the new estate tax law.
An excerpt.
“For donors, a crucial question has always been how much to give to charity while alive and what to leave as charitable bequests in their wills or trusts. The economic crisis has caused many people to cut back on current charitable giving, perhaps figuring they could always make up for it with bequests. But changes in the federal estate tax system signed into law by President Obama on Dec. 17 may well lead some of those who had postponed charitable giving to cut back on future bequests too.
“The new tax law raises the exemption from federal estate tax to $5 million a person ($10 million per couple) for deaths in 2011 and 2012. As a result, fewer families will even come close to paying the tax. That means that, except for the super wealthy, the tax benefits of giving through an estate plan have been wiped out.
“Previously, charities could point to the estate planning benefits of both lifetime gifts and charitable bequests. There’s an income tax deduction associated with gifts during life--adjusted gross income can be reduced up to 50% for cash gifts to public charities and by up to 30% for donations of appreciated assets, such as stock held longer than 12 months. But charities could also make another argument: If you’re not comfortable making a large gift now, remember your favorite cause or alma mater money in your will and you will be leaving less for Uncle Sam.”
I feel this position is counter to the founding roots of the nonprofit sector: built on faith, an American philanthropic culture animated by the donor’s freedom of charitable choice, rather than being spurred by the coercive effect of taxation
Forbes Magazine reports on the new estate tax law.
An excerpt.
“For donors, a crucial question has always been how much to give to charity while alive and what to leave as charitable bequests in their wills or trusts. The economic crisis has caused many people to cut back on current charitable giving, perhaps figuring they could always make up for it with bequests. But changes in the federal estate tax system signed into law by President Obama on Dec. 17 may well lead some of those who had postponed charitable giving to cut back on future bequests too.
“The new tax law raises the exemption from federal estate tax to $5 million a person ($10 million per couple) for deaths in 2011 and 2012. As a result, fewer families will even come close to paying the tax. That means that, except for the super wealthy, the tax benefits of giving through an estate plan have been wiped out.
“Previously, charities could point to the estate planning benefits of both lifetime gifts and charitable bequests. There’s an income tax deduction associated with gifts during life--adjusted gross income can be reduced up to 50% for cash gifts to public charities and by up to 30% for donations of appreciated assets, such as stock held longer than 12 months. But charities could also make another argument: If you’re not comfortable making a large gift now, remember your favorite cause or alma mater money in your will and you will be leaving less for Uncle Sam.”
Monday, January 3, 2011
Tax Policy & Nonprofits
An article—Talking About Taxes, (pp.18-23)—in the current issue of the Nonprofit Quarterly tries to make the case that taxes should be raised to support nonprofits dependent on government, which instead makes the case of why government dependent nonprofits, especially those in the human service area, continue to fail.
Government does have a role in the nonprofit sector—encouraging and initial funding in some cases—but it needs to be a limited role rather than a permanent one.
The nonprofit sector works best when it remains true to its faith-based roots, expressed by Count Alexis De Tocqueville, who came to America in the early 1800’s, met with many of the founders and wrote one of the most perceptive books ever written about America. Here is but a small part of what he said about voluntary associations—nonprofits.
“Americans of all ages, all conditions, all minds constantly unite. Not only do they have commercial and industrial associations in which all take part, but they also have a thousand other kinds: religious, moral, grave, futile, very general and very particular, immense and very small; Americans use associations to give fetes, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes; in this manner they create hospitals, prisons, schools. Finally, if it is a question of bringing to light a truth or developing a sentiment with the support of a great example, they associate. Everywhere that, at the head of a new undertaking, you see the government in France and a great lord in England, count on it that you will perceive an association in the United States.
“I have since traveled through England, from which the Americans took some of their laws and many of their usages, and it appeared to me that there they were very far from making as constant and as skilled a use of association.
“It often happens that the English execute very great things in isolation, whereas there is scarcely an undertaking so small that Americans do not unite for it. It is evident that the former consider association as a powerful means of action; but the latter seem to see in it the sole means they have of acting.
“Thus the most democratic country on earth is found to be, above all, the one where men in our day have most perfected the art of pursuing the object of their common desires in common and have applied this new science to the most objects. Does this result from an accident or could it be that there in fact exists a necessary relation between associations and equality?”
(Alexis de Tocqueville, Democracy in America, 2000 translation by H. C. Mansfield and D. Winthrop. pp. 489-490)
Government does have a role in the nonprofit sector—encouraging and initial funding in some cases—but it needs to be a limited role rather than a permanent one.
The nonprofit sector works best when it remains true to its faith-based roots, expressed by Count Alexis De Tocqueville, who came to America in the early 1800’s, met with many of the founders and wrote one of the most perceptive books ever written about America. Here is but a small part of what he said about voluntary associations—nonprofits.
“Americans of all ages, all conditions, all minds constantly unite. Not only do they have commercial and industrial associations in which all take part, but they also have a thousand other kinds: religious, moral, grave, futile, very general and very particular, immense and very small; Americans use associations to give fetes, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes; in this manner they create hospitals, prisons, schools. Finally, if it is a question of bringing to light a truth or developing a sentiment with the support of a great example, they associate. Everywhere that, at the head of a new undertaking, you see the government in France and a great lord in England, count on it that you will perceive an association in the United States.
“I have since traveled through England, from which the Americans took some of their laws and many of their usages, and it appeared to me that there they were very far from making as constant and as skilled a use of association.
“It often happens that the English execute very great things in isolation, whereas there is scarcely an undertaking so small that Americans do not unite for it. It is evident that the former consider association as a powerful means of action; but the latter seem to see in it the sole means they have of acting.
“Thus the most democratic country on earth is found to be, above all, the one where men in our day have most perfected the art of pursuing the object of their common desires in common and have applied this new science to the most objects. Does this result from an accident or could it be that there in fact exists a necessary relation between associations and equality?”
(Alexis de Tocqueville, Democracy in America, 2000 translation by H. C. Mansfield and D. Winthrop. pp. 489-490)
Wednesday, December 15, 2010
Local Nonprofits in Downturn
As reported by the Sacramento Bee, the impact on local nonprofits from the economic doldrums—especially those dependent largely on government—has been substantial.
An excerpt.
“The rough economy has left charities that provide help needing more help themselves.
“Several dozen Sacramento nonprofits absorbed revenue losses of more than $1 million last year, according to a Bee analysis of charity tax forms.
“The revenue declines not only have led to lost services for area residents but have resulted in lost clout for professional associations based in Sacramento and lost jobs as they have had to cut their own staffs.
"I think the woes we have are pretty common," said Michael Minnick, executive director of the youth services charity Sacramento ENRICHES, which will shut down after almost 15 years at the end of the month. "There's less and less money out there."
“Sacramento's nonprofit industry is large and diverse. It employs about 50,000 local residents and collects billions in revenue annually. It depends heavily on government grants, membership fees and donations. But governments have been cutting back, layoffs are reducing membership rolls and donors are struggling with their own financial problems.
“Of the 400 largest area nonprofits by annual revenue, about 340 have filed tax returns showing how much money they collected in 2009. Those 340 nonprofits saw gross revenues drop by roughly $150 million last year, or about 6 percent, according to a Bee examination of the returns.
“To put that figure in perspective, $150 million is about what the city of Sacramento spends each year on its Police Department.
“Several nonprofit officials said 2010 is shaping up worse.”
An excerpt.
“The rough economy has left charities that provide help needing more help themselves.
“Several dozen Sacramento nonprofits absorbed revenue losses of more than $1 million last year, according to a Bee analysis of charity tax forms.
“The revenue declines not only have led to lost services for area residents but have resulted in lost clout for professional associations based in Sacramento and lost jobs as they have had to cut their own staffs.
"I think the woes we have are pretty common," said Michael Minnick, executive director of the youth services charity Sacramento ENRICHES, which will shut down after almost 15 years at the end of the month. "There's less and less money out there."
“Sacramento's nonprofit industry is large and diverse. It employs about 50,000 local residents and collects billions in revenue annually. It depends heavily on government grants, membership fees and donations. But governments have been cutting back, layoffs are reducing membership rolls and donors are struggling with their own financial problems.
“Of the 400 largest area nonprofits by annual revenue, about 340 have filed tax returns showing how much money they collected in 2009. Those 340 nonprofits saw gross revenues drop by roughly $150 million last year, or about 6 percent, according to a Bee examination of the returns.
“To put that figure in perspective, $150 million is about what the city of Sacramento spends each year on its Police Department.
“Several nonprofit officials said 2010 is shaping up worse.”
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