Opportunities for Action: July Public Policy Update

July 13, 2018

This summer is a busy one on the public policy front. Below is a brief summary of public policy developments and action opportunities for your nonprofit. Also, read on to view this month’s Advocacy Success Story from our friends at Spokane Neighborhood Partners.

Take Action Now: Johnson Amendment Still Under Threat

Anti-Johnson Amendment forces are at it again. This time, they’ve attached an anti-Johnson Amendment policy rider to the Financial Services and General Government Operations Bill slated for a vote in the House in the near future. Section 112 of the bill would effectively block enforcement of the Johnson Amendment against “churches” and their auxiliaries – even when they engage in egregious, partisan activities. The rider offers no reductions or lessening of the restrictions on enforcement against secular organizations and leaders, thus creating a framework that explicitly encourages discriminatory enforcement of the law. All 501(c)(3) organizations should recognize that weakening the protections of the Johnson Amendment for any of us weakens it for all of us. Your Representative needs to hear from you today on this issue. Call the Capitol Switchboard at (202) 225-3121 and ask to speak to your Representative to deliver this message:

Partisanship has NO place in charitable organizations – whether houses of worship, charitable nonprofits, or private foundations. Please work to remove Section 112 from the FSGG bill.

Take Action Now: Urge Delay of New Tax on Nonprofit Transit Benefits

Hidden in the weeds of the federal tax law enacted in December are two new taxes on nonprofits’ “unrelated business income” that are surprising just about everyone. One provision requires tax-exempt employers to pay a 21 percent income tax on its expenses for employee transportation benefits such as transit passes and parking. Another tax change requires nonprofits with business income to pay the tax on each separate “trade or business” and prohibits the blending of profits and losses across lines of business. Both technically became effective on January 1, 2018, with quarterly tax payments due on April 15 for many nonprofits. Unfortunately for all law-abiding nonprofits, the IRS hasn’t told anyone which transportation benefits are taxable or what types of activities constitute a separate “trade or business.” Please consider submitting comments to the IRS requesting that they delay implementation of the new unrelated business income tax on employee transit benefits. Our action alert, with a template for you to use, is available here.

In addition, Representative Michael Conaway (R-TX) introduced a new bill to repeal the new UBI tax on employee transit benefits. H.R. 6037, The Nonprofits Support Act, is currently in the House Ways and Means Committee and has no cosponsors from Washington State. Call the Capitol Switchboard today at (202) 225-3121 and ask to speak to your Representative to urge them to cosponsor H.R. 6037.

It is especially important for you to call if Representative Dave Reichert (R-WA) represents you. He serves on the House Ways and Means Committee, which has jurisdiction over the bill. Washington Nonprofits has spoken with his staff on this issue and they are very interested in hearing from nonprofit organizations based in his district that are impacted by the new tax.

Don’t Miss Your Nonprofit’s Chance to Comment on the Census’ Data Collection Plan

The U.S. Census Bureau has an active comment request in the Federal Register on its proposed data collection plan. This is an opportunity to weigh in on what information is collected (including the proposed citizenship question) and how it is collected (internet collection, in-person, etc…). Your organization can review the request and submit comments here before August 7, 2018. Please contact us with any questions or to discuss what you are planning to submit.

Urge Senators Cantwell and Murray to Support Nonprofit Employees with Student Loans

Senator Heidi Heitkamp (D-ND) introduced a new bill, S. 3124, that would eliminate federal student loan interest for borrowers working in public service professions, which includes nonprofit professionals. The bill currently needs cosponsors, and Senators Patty Murray and Maria Cantwell have yet to sign on. Call their offices today and deliver this brief message:

My name is [your name] and I am a constituent working for a nonprofit. I strongly encourage Senator [Cantwell or Murray] to cosponsor S. 3124 to reduce the student debt burden on nonprofit employees [including me (if you have federal student loans)]. Thank you.

Senator Maria Cantwell: (202) 224-3441

Senator Patty Murray: (202) 224-2621

Washington State Overtime Rulemaking Update

Washington State’s Department of Labor and Industries is currently engaged in rulemaking to update our state’s overtime pay exemption threshold. The likely effect of this process is that more workers will be eligible for overtime pay, which will undoubtedly impact your nonprofit organization. Washington Nonprofits submitted comments to the state to help inform its rulemaking process. Click hereto learn more and click hereto view the comments. We expect that there will be additional opportunities to comment on the rule making process during July and August. Make sure you are subscribed to the Washington Nonprofits Public Policy and Advocacy Updates email list hereso that you receive the latest information on this issue.

Washington Nonprofits in The Spokesman-Review: “To defend against ‘dark money,’ keep the Johnson Amendment”

Washington Nonprofits Executive Director Laura Pierce published an op-ed in the Spokesman-Review urging Washington’s congressional delegation to support maintaining the Johnson Amendment as a means to stay consistent with Washington’s new DISCLOSE Act. Laura wrote:

If the long-standing Johnson Amendment is repealed or weakened, there can be no doubt that savvy political donors would begin to misuse the nonprofit sector by making contributions to houses of worship and their auxiliaries for partisan political purposes in order to receive a tax deduction. Donors would do this instead of contributing to candidate committees or political parties, or to 501(c)(4)s, political action committees, and SuperPACs, all of which exist specifically for political purposes but do not provide a tax benefit to their donors or shield from disclosure.

Previous attempts to repeal or weaken the Johnson Amendment failed because nonprofits, houses of worship, state charity regulators, and private citizens raised their voices against this harmful policy proposal. It is time for us to do so again by encouraging our senators and representatives to support preserving the long-standing Johnson Amendment so that all nonprofits and houses of worship can focus on their missions, not politics, and serve communities, not candidates. It is our sincere hope that Washington state’s congressional delegation will stand with the nonprofit organizations that serve their constituents by working to maintain the Johnson Amendment.

Click here to read the full op-ed.

Washington Nonprofits Board Member Rhona Sen Hoss in The Columbian: Rep. Herrera Beutler Should Work to Keep the Johnson Amendment

Washington Nonprofits Board Member Rhona Sen Hoss published an op-ed in The Columbian urging Representative Jaime Herrera Beutler to work to maintain the Johnson Amendment. Rhona wrote:

During a recent House Appropriations Committee vote on the FSGG, Rep. Jaime Herrera Beutler, R-Battle Ground, voted to keep the anti-Johnson Amendment policy rider. Thankfully, there is still time for Rep. Herrera Beutler to change her position. By stating clearly that the Johnson Amendment should remain fully intact and working to remove the policy rider at Section 112 in the FSGG, she would be joining the broad coalition of nonprofit organizations, religious denominations, the National Association of State Charity Officials — and our homegrown, statewide Washington Nonprofits — and many other groups committed to the responsible use of charitable resources. As a board member of Washington Nonprofits, I strongly encourage Rep. Herrera Beutler to join us in keeping all tax-exempt charitable, religious, and philanthropic organizations nonpartisan.

Click here to read the full piece.

New Reports Hint at Drop in Charitable Giving for 2018

Two new reports suggest that charitable giving is likely to decline in 2018 as a result of the Tax Cuts and Jobs Act. The American Enterprise Institute released a new report suggesting that charitable giving could fall by 4% nationally, totaling an approximate $16-17 billion decrease in total giving. In addition, Independent Sector released a poll indicating that 35% of taxpayers who itemize are expecting to give less in 2018, and that low dollar donors may stop giving entirely. Click hereto read the AEI report. Click hereto read the Independent Sector poll data.

Good News for Nonprofits that Receive Federal Funding:More Reasonable Procurement Thresholds Implemented

Complying with federal procurement rules just got easier for nonprofits with government grants and contracts paid using federal money. Pursuant to the OMB Uniform Guidance, government grantees and contractors are required to follow detailed policies and procedures when purchasing goods and services from others. Thanks to several years of advocacy by nonprofits, the federal Office of Management and Budget on June 20 raised the dollar thresholds for the micro-purchase threshold from $3,500 to $10,000.  In other words, purchases under $10,000 (e.g. a group of computers purchased from a supplier) no longer require multiple written bids.  The simplified acquisition threshold under the Uniform Guidance is also increased from $150,000 to $250,000. Washington Nonprofits plans to continue to advocate for government contract reform and is listening to our community to better understand what rules should be changed.

Advocacy Tip: Yes, Your Nonprofit Can Comment on the Supreme Court Confirmation Process

Did you know that your nonprofit organization is permitted to weigh in on the Supreme Court confirmation process? In fact, the IRS treats commenting on a Supreme Court nominee as lobbying since the Senate ultimately votes to confirm the nominee, as they would with any other piece of legislation. This means that your organization should feel free to voice its opinion to Senators as the Senate debates Justice Anthony Kennedy’s successor. Be sure to consult this guidance sheetfrom Bolder Advocacy about the rules your organization needs to know for commenting.

Advocacy Success Story: SNAP and HB 2444

Our July Advocacy Success Story comes from Spokane Neighborhood Action Partners (SNAP). During the 2018 legislative session, SNAP worked to pass HB 2444, a new law that removes the real estate excise tax on federal tax credit housing properties, which are generally developed, owned, and maintained by nonprofit organizations. The excise tax removal makes it significantly easier for SNAP and other housing providers to continue developing and maintaining low-income housing.

SNAP’s organizational involvement on the bill began before the legislative session started. Its Advocacy Committee recommended to the Board of Directors that the organization should champion the bill. This committee process helped SNAP plan for the advocacy campaign to push for the bill. This enabled the organization to assign roles for the advocacy campaign as well as to dedicate unrestricted dollars from the organization’s budget to secure the bill’s passage.

During the advocacy campaign for the bill, SNAP faced a significant challenge due to its distance from Olympia, which prevented the organization from testifying at hearings and lobbying for the bill in-person at the Capitol. Instead, SNAP leveraged the relationships that it built with key local elected officials to advance the bill. To develop those relationships, SNAP meets frequently with elected officials during the summer and fall before the legislative session begins each January. SNAP also includes local elected officials on its board of directors, which helps SNAP cultivate bipartisan support for its services. The organization worked directly with Senator Andy Billig (a board member), Representative Timm Ormsby (a board member), Representative Jeff Holy (a board member), and Representative Marcus Riccelli (an advisor to SNAP), among other key legislators, to support the bill’s passage. SNAP board members conducted much of the outreach through phone calls and emails to officials, which demonstrates the importance of engaging your board in advocacy.

The campaign was also challenged by the legislature’s short session calendar, which meant that SNAP and its champions needed to pay extra attention to the bill’s progress through the legislative process in order to avoid the bill missing cut off dates. If a bill fails to meet a cutoff milestone, it dies for the session and must be reintroduced the next year. To keep on top of the bill, SNAP subscribed to updates from the legislature’s website on HB 2444. Instructions for bill tracking are available here. During the floor debate on the bill, Representative Holy recognized SNAP for its leadership on the bill, which illustrates the importance of SNAP’s relationship building and persistent advocacy on HB 2444. SNAP’s hard work resulted in the bill’s passage and Governor Jay Inslee signing it into law.

Three important lessons from SNAP’s success story are:

  1. Build relationships with your local elected officials during the summer and fall periods before the start of the legislative session each January. You can discuss your policy agenda before the hectic legislative session begins and be ready to hit the ground running in January.
  2. Consider including elected officials on your board because this can help you cultivate champions for legislation you support.
  3. Leverage your board members’ relationships. SNAP relied heavily on its board members’ personal and professional relationships with officials to build support for the bill. Advocacy is a relationship-driven business, so make sure your board members are introducing themselves to officials, attending legislative visits, and corresponding with officials when appropriate.

Additionally, if your organization is based far from Olympia, it can still play a role in the committee process without making the trip. If you want to testify but cannot attend in-person, write up your testimony and email it advance of the hearing to the committee members, their staff, and the nonpartisan staff that manage the committee. This will help you get your testimony in front of the officials before the hearing begins. Legislative hearings are also streamed live on TVW.org, which means you can watch the hearing online and assemble responses that can be shared with committee members and staff during and after the hearing. As long as you get your information to the committee before the work session on the bill (typically the next hearing date), you should be set.

Upcoming Trainings and Webinars

July 17: Independent Sector hosts “Is Your Organization Ready for the Taxman?”

Description from Independent Sector: “You may be tax-exempt, but your taxes still may increase in 2018. New laws will increase taxes for organizations that provide employee parking, allow employees to make pre-tax transportation payments, or operate social enterprises. Join us to learn more about how recent changes to unrelated business income tax (UBIT) impact your bottom line.”

August 2: Standing for Justice Together

Description from 501 Commons: “On August 2, 501 Commons, Win/Win Network, and Asian Counseling and Referral Service are collaborating to bring AFJ back to Seattle for a full day of Bolder Advocacy training at Pacific Tower from 8:30 – 4:00.

  • The morning session covers the basics of advocacy and lobbying, and includes a networking lunch.
  • The afternoon session delves into coalitions, affiliations with 501(c)(3)s and 501(c)(4)s, political organizations, and unions.

Attendees can choose to attend one or both sessions. Getting board members engaged is key to success in advocacy. Bring your board members to get them excited about advocacy and ensure that they know what they can – and cannot – do when representing your organization.”

Upcoming Town Hall and Constituent Events

Multiple Dates: U.S. Representative Dan Newhouse Mobile Office Hours

Multiple Dates: U.S. Representative Pramilla Jayapal Coffee Hours

Multiple Dates: State Representative Carolyn Eslick Weekly Coffee Hours

Multiple Dates: Department of Social and Health Services Town Halls with Secretary Cheryl Strange

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