Nonprofits

What Are the Key Federal Policy Issues for Nonprofits?

/ The Old Crank

Pablo Eisenberg, a senior fellow at the Georgetown Public Policy Institute, wrote an opinion piece last week for The Chronicle of Philanthropy that was critical of the Independent Sector’s new report on nonprofit advocacy, Beyond the Cause, arguing that is was undermined by “a self-serving agenda and an implicit, if not intentional, suggestion that Independent Sector become the central hub of the [nonprofit] sector’s advocacy efforts.”

The Chronicle headline would lead you to believe that the article was primarily about Eisenberg’s discomfort with the notion of Independent Sector serving as the voice for all on nonprofits, but the meatier part of his critique actually concerned the specific policy issues that they reported as the most critical to the field. He doesn’t agree with their choices, and suggests five policy changes that he thinks would make more of a difference. Those changes are (in a nutshell):

  • Improving what he labels as a “dysfunctional” nonprofit regulatory system.
  • Mandating an increase to the share of assets foundations must distribute annually.
  • Encouraging greater socioeconomic diversity on nonprofit boards of both foundations and nonprofits.
  • Closing the growing gap between large and small nonprofits. He notes that small organizations are shrinking (or closing) while large nonprofit are thriving and that tis disproportionately hurts the poor and disadvantaged, who typically get services from smaller, community-based nonprofits.

You can read the entire article to read his arguments in depth.

It’s useful to think about the most pressing policy issues impacting nonprofits, even though I don’t think it’s easy to come up with a list that every nonprofit would agree on, considering the size and diversity of the sector—which includes organizations ranging from universities with multi-million endowments to small, all-volunteer organizations with tiny budgets. And sometimes we forget that the sector includes a wide variety of political points of view as well.

For his part, Eisenberg thinks it’s impossible for nonprofits to share a broad consensus about which issues are most important, and that “the best that nonprofits can accomplish is to strengthen their individual advocacy and lobbying activities and join with other organizations in coalitions that fight for specific policy changes.”

But is it really impossible to come up with a short list of changes that a broad consensus of organizations could agree are important? And while I agree that working via coalitions is an effective strategy, the reality is that the best coalitions often are led by a trusted leader that pulls everyone together and keeps things organized. While I don’t think a single entity could speak for everyone on every issue facing nonprofits, a lead organization that was able to bring the sector together on a handful of the most critical issues, if it resisted the temptation to dominate the advocacy space on its own, could be very effective. The more groups there are advocating here in Washington on behalf of this sector, the more likely we are to drown each other out.

For the record, here are the issues that Independent Sector picked as most important:

  • Protecting against proposals that could limit the organizations eligible for charity status.
  • Protecting against proposals to limit or remove charitable tax deductions for donors.
  • Clarifying advocacy and lobbying rules for charities and private foundations.
  • Guarding against any proposed revisions to Internal Revenue Service disclosure forms that could hamper nonprofit operations.
  • Reducing/eliminating overly burdensome paperwork and red tape involving government contracts with nonprofits.
  • Providing more government-financed research on the nonprofit sector.

Fittingly, Nonprofit Free Speech Curtailed by Congress Before Anyone Had a Chance to Say Anything About It

/ The Old Crank

A leftover nonprofit/1st amendment issue raised by the FY 2012 omnibus appropriations bill passed by Congress last December got some attention this week in the form of a strong opinion piece by Mark Rosenman, director of Caring to Change, and Gary D. Bass, executive director of the Bauman Foundation and affiliated professor at Georgetown University’s Public Policy Institute. Their article was published in both The Chronicle for Philanthropy and the Foundation Center’s “Philantopic” blog.

The issue concerns some language that was inserted into the bill that, in the author’s opinion, curtails the free-speech rights of certain non-profit organizations. Rosenman and Bass see this is part of a long history of efforts (primarily by right-wing political groups) to prevent nonprofits that receive federal dollars from informing policymakers and the public about issues they care about.

The authors do a nice job of describing the language that was inserted, (although you have to get almost halfway through the article to get to it), and I agree that nonprofit organizations should be concerned:

With the new law, groups that receive money under the appropriations measure cannot use federal grants for “any activity to advocate or promote” any “proposed, pending, or future” tax increase (at any level of government) or any “future requirement or restriction” on a “legal consumer product” (e.g., tobacco and alcohol products, junk foods and beverages, and guns).

None of those key terms is defined. Suppose a group received federal aid to fight cancer by decreasing tobacco use and wanted to educate the public about the health dangers of cigarette sales, especially to minors. Presumably, that wouldn’t be allowed under the law. Or say another nonprofit won a grant to curb obesity. It might want to suggest a surcharge on sodas and other sugary foods as a way to deter consumption, but it probably couldn’t promote that idea.

The new law also forbids nonprofits from using federal money to influence some regulatory and executive-branch actions. That means a charity that receives federal money to provide care and support to families with disabled children, for example, would no longer be allowed to use any of its government money to comment on proposed state regulations that govern residential treatment or in-home services.

The point I want to add to this is about the process. What a lot of people who don’t follow Congress very closely may not realize—and may be surprised by—is that policy language like this often finds its way into appropriations bills. Before I started paying attention to how the appropriations process worked, I just assumed that appropriations bills solely concerned… appropriations. That is, I thought they just described spending amounts, and didn’t include much else. But Congress often inserts policy language into these bills that can have far-reaching consequences.

Rosenman and Bass complain that “charity leaders didn’t find out about [the language] in time to take action to prevent their passage,” which is quite possible, because the omnibus bill was rushed into passage after Congress failed to get FY12 appropriations bills out under the normal process. This raises the question: is it a good idea for Congress to be able to insert legislative language like this into bills during an expedited process where there is little time for advocacy or debate? But overall the authors are more critical of the substance of the language that was inserted into the bill than by the process by which it got in there.

In any case, it’s a good lesson for advocates on the importance of paying attention to the appropriations process, and that it’s especially important to be alert when spending bills come together quickly, like this one did.