As the Social Innovation Fund gears up to make grants, nonprofit leaders raised concerns this week that the fund could have the unintended consquence of discourging grant makers from speaking out about federal policies.

During an event at the Hudson Institute's Bradley Center for Philanthropy and Civic Renwal, speakers of different political stripes discussed the foundation world's relationship with the Obama administration and the importance that grant makers remain a strong independent voice in Washington.

But they said advocacy work could be hampered by Mr. Obama's Social Innovation program, which will give money to existing grant-making organizations that, in turn, will support effective charities helping youth and other causes.

"The more dependent you are on government revenues, the more likely you are to bite your tongue," said Gara LaMarche, chief executive of the Atlantic...

The Senate has approved a jobs bill that has a tax credit that could provide $1-billion in savings to nonprofit groups and generate 8,000 to 18,000 new nonprofit jobs, according to an analysis by the Alliance for Children and Families.

The measure would exempt private employers, including nonprofit groups, from paying their share of Social Security taxes for employees they hire through the end of 2010. The new hires must have been out of work for at least 60 days.

They would get an additional $1,000 bonus if they kept the employee on the payroll for a full year.

The House of Representatives now will consider the Senate legislation.

For more information, read The Chronicle's previous coverage of the provision.

The Supreme Court heard arguments this morning in a case challenging the constitutionality of a law that international human-rights and humanitarian-aid charities say stifles their speech and advocacy work.

The charities take issue with the U.S. government making it a crime to provide "material support" to groups deemed "foreign terrorist organizations." In the case, Holder v. Humanitarian Law Project, the charities say the definition of material support -- which includes services, training, expert advice, or personnel -- is too broad and could criminalize their work to promote reconciliation among warring groups and provide aid in parts of the world controlled by terrorist organizations.

Under a law dating back to 1996 and revised under the Patriot Act, individuals face up to 15 years in prison for providing material support to terrorist groups, even if that work is legal and has...

The head of global health for the Bill & Melinda Gates Foundation is under scrutiny by members of Congress for his previous job at one of the world's largest pharmaceutical companies.

The Senate Finance Committee is investigating whether the drug company GlaxoSmithKline knew of possible health risks associated with the diabetes medicine Avandia. The committee's senior members, Max Baucus, a Democrat from Montana, and Charles Grassley, a Republican from Iowa, released a report over the weekend that says that the company intimidated outside researchers from studying the drug.

A figure in this controversy is Tachi Yamada, the Gates official who formerly served as director of research for SmithKline, the predecessor to GlaxoSmithKline.

Only a small portion of the 334-page report focuses on Dr. Yamada. But it says he made phone calls to officials at the University of North Carolina and the...

The Internal Revenue Service hired 155 new employees for its Exempt Organizations office, bringing the total to 921, Nikole Flax, an official in that division, told participants at the annual Washington Non-Profit Legal & Tax Conference.

The IRS has “heard from many of you about the concern of the retirement of many people within the service who have decades of knowledge,” Ms. Flax said. “The good news is that the IRS has been able to “replace some of the knowledge that we’ve lost.”

About 100 of the new employees are working in the tax agency’s examinations office, which audits nonprofit organizations, Ms. Flax said.

Several new employees are “tax law specialists” in Washington who are working to produce guidance, such as private-letter rulings that are sought by nonprofit groups that need approval of changes to their charitable mission or activities, she said.

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President Obama said today he plans to nominate Jonathan Andrew Hatfield, deputy inspector general of the Federal Election Commission, as the new inexpector general of the Corporation for National and Communty Service.

The corporation, which manages AmeriCorps and other national-service and volunteer programs, has been without an inspector general since Mr. Obama removed Gerald Walpin from the post in June, saying he no longer had "fullest confidence" in him.

Mr. Walpin has sued the agency to get his job back and Sen. Charles Grassley, Republican of Iowa, opened an investigation into how the case was handled.

Mr. Hatfield has served in the Federal Election Commission's inspector general's office since 1994, becoming deputy inspector general in 2005.

The nomination comes just days after the Senate voted to confirm Patrick Corvington as the corporation's new chief executive.

The Internal Revenue Service has made final its 2009 Form 990 informational tax return that charities will file in 2010 or 2011.

To help charities understand the updated form, the IRS has released a list of changes made to modify and clarify reporting requirements in the revised form, as well as in the form's schedules and instructions.

For example, the IRS said that Line 2 in the form's Part VI: Governance, Management, and Disclosure, now "clarifies that, if two officers, directors, trustees, or key employees of the filer serve in similar positions with another tax-exempt organization, that involvement does not create a reportable business relationship between the two." Line 15 in the same Part VI defines "conflict of interest" for compensation arrangements.

The Form 990 is the primary document that charities file with the government each year.

The IRS also...

The federal Congressional Research Service has issued a report for members of the House and Senate that reviews the tax provisions for people who use their cars, trucks, and other vehicles as part of their volunteer work.

In recent years, key members of Congress have been trying to increase the standard mileage rate for charitable activities.

Under federal law, volunteers who drive their cars for charitable purposes may deduct 14 cents a mile for their car costs or be reimbursed by a charity at that rate without the payments being subject to federal income tax.

Without needing to seek Congressional approval, the Internal Revenue Service continually adjusts the mileage rate for business, medical, and moving expenses to account for inflation and other costs. The business rate is currently 50 cents per mile; the rate for medical and moving expenses is 16.5 cents.

A tax credit that is part of a draft jobs bill that the U.S. Senate is now considering could provide $1-billion in benefits to nonprofit groups and generate from 8,000 to 18,000 new nonprofit jobs, according to an analysis by the Alliance for Children and Families.

The measure -- drawn up by Sens. Charles E. Schumer of New York and Orrin Hatch of Utah -- would exempt private employers, including nonprofit groups, from paying their share of Social Security taxes for employees they hire through the end of 2010. The new hires must have been out of work for at least 60 days.

They would get an additional $1,000 bonus if they kept the employee on the payroll for a full year.

The Alliance for Children and Families -- an association of human-services groups -- used Congressional Budget Office analyses on the impact of job tax credits to estimate how the proposal would affect nonprofit jobs,...

President Obama praised the work of religious charities in a speech today and said he has tried to improve how the government supports their charitable efforts.

But civil-liberties groups criticized his administration's "faith-based initiative," saying Mr. Obama has yet to fulfill his promise to place better safeguards against proselytization and religious discrimination.

Speaking at the National Prayer Breakfast in Washington, Mr. Obama focused on how religion can help bring civility to political debates, but also applauded Jewish, Christian, Hindu, and other faiths that are responding to the earthquake in Haiti.

He said such compassion should be harnessed for everyday disasters, like hunger and poverty. He also said that liberals have started to embrace the idea that religious groups and other private efforts can play a major role in fighting social problems.

There is an...