In This Week's Edition of Snapshot...
Philanthropy Statements in Response to the January 6th Attack of the U.S. Capitol
Last week’s acts of terror against the U.S. Capitol and state houses captured our nation and the world’s attention. Council president and CEO Kathleen Enright released a statement in response. Also, over 200 philanthropic leaders co- signed a letter condemning the violence and calling on elected officials to protect democracy.
House Committee on Ways & Means
On Wednesday, the Democrats on the House Committee on Ways & Means sent a letter to Secretary Mnuchin urging him to issue emergency guidance in response to news reports that tax-exempt organizations helped to fund and facilitate the attacks at the U.S. Capitol on January 6, 2020. The letter states, “Given the media reports and long-standing position on these activities, we urge the Department of the Treasury to immediately issue emergency guidance to tax-exempt organizations on the current laws, rules, and sanctions related to their participation in illegal activities seeking to overturn or interfere with the conduct of our government.”
117th Congress – Expected Priorities
With the elections of both Democratic Senate candidates, Rev. Raphael Warnock and Jon Ossoff, in the Georgia run-off election on January 5, Democrats will control the House, Senate, and White House after President-elect Biden is sworn into office on January 20, 2021. The close margins in both the House and Senate mean that Democratic leaders will need either unanimity from their caucus to pass legislation, with Vice President-elect Harris serving as the tie-breaker vote in the Senate, or find Republican votes. In either scenario, Democratic leaders are expected to push forward on their agenda for the coming months with an expected focus on:
COVID-Relief: Both Speaker Nancy Pelosi and Senate Democratic Leader Chuck Schumer have said another health and economic package responding to the ongoing impacts of the COVID-19 pandemic is a top priority. On Thursday, President-elect Biden released a nearly $2 trillion economic and health care package, called the American Rescue Plan. The proposal includes additional stimulus relief payments for individuals, enhanced unemployment insurance benefits, aid to communities and businesses, funding for state, local and tribal governments, as well as additional health care funding for a national vaccination program. In addition, the plan says that President-elect Biden will put forward an additional economic recovery plan in the coming weeks.
Biden Administration Confirmations: Delays in Congress mean that President-elect Biden may begin his presidency without a single Cabinet official confirmed on Inauguration Day. He has indicated he will appoint career officials in an acting capacity until his nominees are approved. Once Democrats take control of the U.S. Senate, committees are expected to begin confirmation hearings quickly.
2021 Budget Reconciliation: Given the razor thin majority in the Senate, Democrats will need to use budget reconciliation to move part of their agenda forward, but this legislative vehicle has limits on what can be included. Reconciliation has been used to make changes to mandatory spending, but not discretionary spending. Previously, Congressional Republicans used the reconciliation process to pass their comprehensive tax reform through Congress in 2017, and Democrats have suggested they may use the same process to repeal pieces of that legislation this time. The appeal of reconciliation is that it is filibuster-proof in the Senate and just requires a majority to pass.
Congressional Democrats have floated using reconciliation to pass a range of legislative priorities but have yet to put forward a budget resolution with “reconciliation instructions” telling Congressional committees their spending, revenue, or deficit targets. As their reconciliation strategy takes shape, it will become clearer what, if any, impacts are expected for foundations and other tax-exempt organizations.
Supreme Court Agrees to Hear Charitable Donor Disclosure Cases
Two advocacy groups, the Thomas More Law Center and Americans for Prosperity Foundation, have filed legal challenges, arguing that the California Attorney General’s Office donor disclosure requirement is a violation of free speech. Those legal challenges, Americans for Prosperity Foundation v. Becerra and Thomas More Law Center v. Becerra, have made their way to the U.S. Supreme Court that has agreed to consider them.
Department of Commerce
- According to NPR, the Bureau has halted all work on January 12 on President Trump's directive to produce a state-by-state count of unauthorized immigrants that would have been used to alter a key set of census numbers.
- The Bureau announced on January 14 that 2020 Census redistricting geographic support products will be available for all states, the District of Columbia and Puerto Rico on a flow basis starting Jan. 19 and ending no later than Feb. 28. These products consist of 2020 Census geography with the newly created 2020 Census blocks and updated block groups, census tracts, voting districts, and current boundaries for legal governments and school districts referenced to Jan. 1, 2020. Each state’s package will include shapefiles, maps, block assignment files and name lookup tables. These products are provided to support redistricting efforts by state and local governments.
Small Business Administration
The SBA will reopen the Paycheck Protection Program (PPP) loan portal to PPP-eligible lenders with $1 billion or less in assets for First and Second Draw applications on Friday, January 15, 2021 at 9a.m. ET. The portal will fully open on Tuesday, January 19, 2021 to all participating PPP lenders to submit First and Second Draw loan applications to SBA.
Environmental Protection Agency
The U.S. Environmental Protection Agency (EPA) released its 2020 Support of Rural America Report that highlights key scientific decisions and successful partnerships that directly impact rural communities across the country, and ultimately, our nation’s food supply.
The Federal Reserve System
The Federal Reserve Board's Division of Consumer & Community Affairs advances community reinvestment and research to increase understanding of the impacts of financial services policies and practices on consumers and communities. Philanthropic funders can tap valuable resources such as:
- The Community Advisory Council -- a diverse group of representatives of consumer, workforce, and community development organizations and interests who provide information, advice, and recommendations to the Board.
- COVID-19 resources is a hub of useful information of the Board System’s response to the global pandemic.
- The Federal Reserve's Work Related to Economic Disparities analyzes and understands income, wealth, employment, and other disparities for demographic groups and areas.
- 2020 survey research on covid-19's impact on low- to moderate-income communities from the Fed’s surveys of leaders of nonprofit organizations, financial institutions, government agencies, and other community organizations to better understand the effects of COVID-19 on these communities.
- The Fed’s broader range of work in low- and moderate-income communities and other underserved areas across the U.S .
Department of Treasury
On Monday, January 11, Treasury and the IRS released final regulations under section 4960 of the 2017 Tax Cuts and Jobs Act, which imposes an excise tax on remuneration in excess of $1 million and any excess parachute payment paid by an applicable tax-exempt organization (ATEO) to any covered employee. The excise tax and the final regulations can affect not only ATEOs, but also certain entities that are treated as related to those organizations. In June 2020, Treasury and the IRS published proposed regulations under section 4960. The final regulations retain the basic approach and structure of the proposed regulations, with certain revisions.
Exclusive from our colleagues at the National Council of Nonprofits.
COVID-19 Influences Dynamics of State Legislatures
By the end of today, legislatures in 40 states will have gaveled in for the 2021 session. Yet those sessions will look very different this year because of COVID-19. To address public health concerns, legislatures have amended their rules, altered their protocols, and seen changed expectations among lawmakers, staff, and the public. The most common change - hybrid meetings that provide a mixture of virtual convenings and in-person meetings that follow social distance rules - likely will adversely impact the ability of nonprofits and others to advocate effectively. Connecticut, Delaware, Hawai`i, Oregon, Vermont, and Virginia have announced all meetings will be virtual at the start of their sessions. Last week, New Hampshire lawmakers met in their cars in a parking lot for the first-ever drive-in legislative session. During a virtual presentation, legislative leaders in Hawaii called for all virtual hearings, shortened meetings, reduced number of bill introductions, and prioritization of legislation taken up for consideration during public hearings.
Unemployment Relief Remains Top Priority
State associations of nonprofits are continuing to advocate for unemployment insurance relief. New Jersey Governor Murphy signed into law legislation that stops experience rate increases for contributing employers, makes direct payments to the state to pay for unemployment claims, holds reimbursing employers harmless, and delays an automatic payroll tax increase. “This important legislation will provide vitally needed relief for [nonprofit] employers of all sizes, helping to keep more resources available for charitable missions,” according to the Center for Non-Profits, the state association of nonprofits in New Jersey. Minnesota enacted COVID relief legislation that provides an additional 13 weeks of extended unemployment benefits and covers 100 percent of the costs that would otherwise be charged to reimbursing employers. The Massachusetts Nonprofit Network successfully advocated for the inclusion in their state budget of a 6-month deadline extension for nonprofit employers that self-insure for their unemployment costs. Without this deadline extension, nonprofits across the Commonwealth would now be facing large balloon payments. Reimbursing employers in Delaware had initially secured relief from making payments to the state payments, but the short-term relief has now expired.
In December, Kentucky’s Governor announced that the Commonwealth is dedicating $51.5 million in remaining Coronavirus Relief Funds to cover the non-federal half of the costs of benefits charged to reimbursing employers. “This relief will help nearly 1,000 nonprofits keep their doors open to maintain services and meet the urgent needs of Kentuckians,” said Danielle Clore, CEO of the Kentucky Nonprofit Network. Likewise, last month, the North Dakota Emergency Commission reallocated $2.65 million of Coronavirus Relief Funds to cover 50 percent of unemployment costs for reimbursing employers in the state.