Non Profit Organizations

Federal Nonprofit Policy Updates:

House Efforts Fail to Overturn President’s Veto of SCHIP
Two weeks of passionate debate surrounding the fate of a State Children’s Health Insurance Program (SCHIP) extension were not enough to turn the tide, as the House fell 13 votes short of the two-thirds majority needed to overturn President Bush’s veto of H.R. 976. While the Senate passed the bill with two-thirds support, the October 16 House vote ultimately fell just short of the 286 votes required to nullify Bush’s veto.

Shortly after votes were tallied, House Speaker Nancy Pelosi (D-CA) pledged that Democrats would begin working on another SCHIP bill. That effort was made good a week later, on Thursday, October 25, as the House passed a revised bill by a vote of 265-192. While the new bill called for the same $35 billion expansion over five years – spending identified by the White House as major grounds for the Bush veto – it did make some concessions on other contentious issues, including restricting access according to age, income, and immigration status.

Though the White House alleges that this bill will likewise be vetoed owing to its large price tag, efforts to compromise have increased notably. Presently, continuing resolutions are being utilized to fund SCHIP at its current level. For more information and updates on SCHIP, visit the Center for Medicare and Medicaid Services.

IRS Updates:

IRS has announced its priority issues for the next year, which include several topics related to nonprofits: forthcoming regulations on the new Form 990, the e-Postcard, new requirements for supporting organizations under the Pension Protection Act of 2006, and revocation standards for nonprofits that engage in excess benefit transactions. A full listing of the 2008 IRS agenda is available on their website.

* The IRS plans to release the Revised Form 990 by year-end. Some changes have already been announced, such as the elimination of expenditure ratios, prominent placement of program accomplishments and mission statement, and delineation of required versus recommended governance practices. Many of the changes reflect recommendations submitted by NCNA and the State Association network.
* Small nonprofits that were not previously required to file returns will be required to file a new Form 990-N electronically starting in 2008. This change will primarily affect small tax-exempt organizations whose gross receipts are $25,000 or less and have not previously been required to file Form 990. Exceptions to this requirement include organizations that are part of a group return and private foundations required to file Form 990-PF. In addition, this filing requirement does not apply to churches, their integrated auxiliaries, and conventions or associations of churches. IRS will revoke the tax-exempt status of nonprofits that don’t file Form 990-N for three consecutive years, so it is imperative that small nonprofits comply with this new requirement. The IRS has published a useful frequently asked questions document describing the new Form 990-N (e-Postcard) requirements.
* The IRS has proposed new rules that would make group exemption letters and decisions to deny or revoke tax-exempt status publicly available. The IRS is accepting public comments on these disclosure rules through November 13, 2007. The IRS also announced that they have resumed issuing determination letters for Type III organizations and established new determination criterion for these rulings.

State Nonprofit Policy Updates:

In October, state legislators introduced dozens of bills that impact all nonprofits in their respective states. Below is a partial list of these bills, listed alphabetically by state. Unless otherwise noted, the bills below have not become law.

MI | Michigan Passes State Budget
SB 0772 was passed in the pre-dawn hours of October 1, 2007, when the Michigan Legislature and Governor Jennifer Granholm reached an agreement allowing for the signing of a 30-day continuation budget and forestalling an impending government shutdown. It is expected that the comprehensive 2008 budget will include additional budget cuts and governmental reforms designed to create increased revenue for the state. Key items contained on this bill include: an income tax increase; an expansion of the sales tax; $400 million worth of cuts to state services; the establishment of health care insurance pooling/competitive bidding for schools; the privatization of mental health services for prisons; mandates of an intermediate school district common calendar; the establishment of health incentives for those covered by Medicaid. 501(c)(3) and 501(c)(4) nonprofit charitable organizations continue to be exempt from the sales tax, including the expanded sales tax on services. For updates and additional information on the Michigan State Budget, visit Michigan Nonprofit Association’s public policy page.

NJ | Election Law Enforcement Commission Extends Pay-to-Play Filing Deadline
During its September meeting, the Election Law Enforcement Commission (ELEC) voted to extend until October 30, 2007 the deadline for nonprofit organizations to file electronic disclosures of the individual political campaign contributions made by their officers, directors, trustees, and respective spouses pursuant to its "Pay to Play" regulations. This deadline extension applies exclusively to non-profit filers; the deadline for other entities expired on September 28. Learn more about this and other state policy issues by visiting the Center for Nonprofit Corporations' advocacy page.

WA | Executive Alliance Clarifies Charitable Solicitation per Revised Code of Washington
Following its citation in the Revised Code of Washington, Executive Alliance has published a report detailing the rules governing charitable solicitation in the state of Washington. Issues covered within the document include the act of solicitation, fundraising, commercial fundraisers, and contracts between the aforementioned and charitable organizations.

Nonprofits and Elections:

Election cycles represent additional responsibilities and opportunities for nonprofits. While 501(c)(3) organizations must adhere to additional lobbying and advocacy restrictions, they also have the opportunity to fulfill a critical role promoting individual participation in democracy. Every nonprofit can participate in nonpartisan election activities such as nonpartisan voter registration and education. Indeed, front-line nonprofits are often in the best position to mobilize traditionally underrepresented groups – their constituents – to vote.

This page contains guidance and strategies for nonprofit activities during election cycles.