Washington Snapshot - September 4, 2015

Due to the Labor Day holiday, this week’s edition of Washington Snapshot is slightly abbreviated. We wish our readers an enjoyable Labor Day!

Congress IconNews from the Hill

Congress is in recess through the Labor Day holiday and will return to Washington on September 8th for a busy end-of-year legislative agenda.

State Policy IconHappening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

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State Budget Impasses, Policy Disputed Keep Nonprofits on Edge

Several states have started their fiscal years without a budget agreement in place, putting in doubt when or whether nonprofits will be paid for the services they provide on behalf of governments. The Illinois budget impasse may not be resolved for several more months as the Governor and Legislature remain far apart on spending priorities. The parties did agree on a measure to fund education and a separate bill to continue programs that operate using federal funds. Social services nonprofits in recent weeks have signed contracts for the new fiscal year, but there is no guarantee that they will get paid.

In Pennsylvania, there is grave concern that the government will not be paying its bills in the absence of a budget and nonprofits are having to take out loans, curtail programs, or worse. More than a quarter of the social services nonprofits expect to cut services due to the budget impasse, according to results from a survey conducted by a partnership of nonprofits including the Pennsylvania Association of Nonprofit Organizations and the United Way of Pennsylvania. About half of those responding to the survey report experiencing cash-flow problems and sixty percent plan to borrow money to continue providing services. In a news release, the organizations that sponsored the survey called on the Governor and Legislature to provide some stopgap measures to ensure that “vulnerable Pennsylvanians do not suffer while a final budget is being negotiated.” The groups recommend that policymakers immediately authorize continuing appropriations at the level of the prior fiscal year, ensure that federal pass-through funds continue to flow, and expand the list of services considered essential to ensure that payments are made during the impasse.

The North Carolina budget stalemate continues as well, but legislators have passed a series of continuing resolutions to make sure that the government’s bills get paid. The latest extension, running through September 18, is intended to give the House and Senate time to conclude negotiations over many very controversial issues affecting nonprofits, such as adding charitable donations to an existing cap on itemized deductions and limiting sales-tax exemptions. The North Carolina Center for Nonprofits has developed a comparison of the differences between the House and Senate budgets.

Last month, the Alabama Legislature ended a special session without reaching agreement on a budget for the fiscal year that starts October 1. Although failing to achieve the purpose of the session – enacting a budget – the Legislature did pass new reporting requirements on nonprofits that are exempt from sales taxes. A second “special session” to resolve the budget stalemate starts on September 8.

News IconPhilanthropy News and Op-Eds

Skepticism of University Endowments

A recent op-ed in the New York Times—which questions universities’ endowment management and spending practices and proposes an 8 percent annual payout—has sparked a number of opinion pieces on the topic of university endowments. An NPR piece explains that Malcom Gladwell, author and writer for The New Yorker, has taken on university endowments at schools like Yale and suggested that these endowments should not be tax-exempt. Howard Gleckman of Urban Institute also responded to the debate this week, writing a post for TaxVox Blog that expresses an even more skeptical perspective; questioning why university endowments are “tax-exempt at all.”

In contrast to the New York Times piece, Gleckman proposes a tax on endowments in excess of $500 million, with the universities required to direct a percentage of their endowments toward a specific need that would serve to the community’s benefit.

This scrutiny is an important component of a concerning trend the Council has alerted our members to: the skepticism of endowed philanthropy. This skepticism is not new, nor is it limited to universities—it extends to all endowed institutions. However, commentary often misses the mark and mischaracterizes, or misunderstands, the purpose and value of endowed funds.

U.S. Department of Education Invites Applications for Juvenile Justice Re-Entry Program

This week, the U.S. Department of Education (ED) gave notice in a Federal Register posting that it would be accepting award applications for the Juvenile Justice Reentry Program: Opening Doors to College and Careers through Career and Technical Training (JJ Reentry CTE Program).

The awards are meant to support the establishment and operation of projects that build on existing efforts to improve reentry outcomes for justice-involved youths, make career and technical education (CTE) the focus of their efforts, and build strong partnerships to implement a comprehensive, collaborative approach to improving education, employment, and other positive well-being outcomes for justice-involved youths.

If you or an organization you work with is interested in learning more about this opportunity, click here.

Events IconEvents

The Role of Nonprofit Media in a Vibrant Civil Society - Next Wednesday!

Join the Council on Foundations, nonprofit media organizations, foundations, journalists, academics, and other stakeholders for a conversation on Wednesday, September 9th about the role of nonprofit media in fostering a vibrant civil society in local communities.

To learn more and to register, click here!

Reauthorization of Higher Education Act - September 17th

Join our policy and foundation guest speakers who will provide an overview of the status of Congressional reauthorization of the Higher Education Act that authorizes billions of dollars for Pell Grants, student loans, and many other supports for students. teachers, and institutions of higher education. Some of the issues likely to be debated center around affordability of college; access, persistence and completion; better information for consumers; student loan programs; accreditation and oversight; innovation; and the burden of federal reporting and regulations. Let's talk about why the foundation sector should be interested in the outcome of the legislation.

To learn more and to register, click here!

Government Cost Reimbursement Rules for Nonprofits - October 14th

This webinar will provide an overview of OMB Uniform Guidance that streamlines and clarifies cost allocation and other rules related to government grants and contracts, while removing some areas of confusion and inconsistency and treating more of a nonprofit’s expenses as direct (reimbursable) costs.

To learn more and to register, click here!

Membership with COF

15 for 12: New Council Members get Three Months Free

As the new year approaches, the Council is offering a remarkable deal to interested foundations that are considering becoming members in 2016.

Starting now, any non-member who applies and is approved for 2016 Council membership will receive free membership for the remainder of 2015. The 2015 free membership will become effective upon payment of the 2016 dues.

If any of our readers are interested in becoming members of the Council, please contact our Membership Associate, Phillip Blackmon, for details.