Government and Politics Watch

November 19, 2009

Charity Leaders Ask Congress to Help on Hunger Relief

Charity and foundation leaders Thursday urged Congress to take action to help the nonprofit organizations that are on the front lines of the mounting demand for food aid as the economic recession cuts a wide swath.

“The number of new users coupled with the growing need of existing clients has made it increasingly difficult for food banks to adequately serve the needs of those who need it most,” Scott Wolf, a founding member of the Feeding America Entertainment Council, told two House Ways and Means subcommittees that held a hearing on the issue.

The witnesses — who also included representatives of Catholic Charities USA; Northwest Harvest, in Seattle; United Way Worldwide; and the J. Bulow Campbell Foundation, in Atlanta — said the demand was rising at a time when donations were static or falling. They offered a variety of proposals for easing the strain in their written testimony, including:

Strengthen tax breaks for charitable donations. For example, Congress could pass the Good Samaritan Hunger Relief Tax Incentive Act (H.R. 3327 and S. 1313), which would permanently extend and expand a charitable deduction for businesses that donate food inventory. Brian A. Gallagher, United Way president, urged lawmakers to resist proposals to cap tax breaks for charitable gifts as a way to pay for a health-care overhaul and to consider allowing people who do not itemize their taxes to get charitable deductions.

Increase spending on federal safety-net programs like the Supplemental Nutrition Assistance Program and Emergency Food and Shelter Program. Also, continue extending unemployment benefits and reauthorize the Child Nutrition Act, which provides food to schoolchildren.

Provide money to help nonprofit groups meet the growing demand. “One sector that has been stunningly absent from the national economic-recovery discussion is the nonprofit sector,” said Candy Hill, senior vice president for social policy and government affairs at Catholic Charities.

The hearing was held by the Ways and Means subcommittees on oversight and on income security and family support.

— Suzanne Perry

November 17, 2009

Report Urges Congress to Expand National Service to Create Youth Jobs

Congress should provide close to $1.5-billion in extra spending on national-service programs over the next two years to provide jobs for young people who have been hit hard by the economic crisis, a new report by the Center for American Progress argues.

The effort could help both young people who are experiencing the country’s highest unemployment rates in years and nonprofit groups that could use youth workers to help meet the rising demand for antipoverty services, it says.

The center, a liberal think tank in Washington, proposes increasing the federal funds for AmeriCorps, Vista, Youth Corps, and Youth Build in fiscal years 2010 and 2011 in a way that would create the equivalent of more than 100,000 new jobs.

It suggests, for example, speeding up plans to expand AmeriCorps, which is now slated to more than triple its size, to 250,000 positions, by 2017 under the Edward M. Kennedy Serve America Act.

“By connecting unemployed youth with opportunities to serve our country and our people, investments in national service can fill the needs not only of low-income Americans but also jobless young Americans,” the report says. “This policy solution also helps the economy overall — putting people back to work creates economic demand that will help get the economy back on its feet.”

The report, “National Service and Youth Unemployment: Strategies for Job Creation Amid Economic Recovery,”“ was written by Melissa Boteach, Joy Moses, and Shirley Sagawa.

— Suzanne Perry

'Promise Neighborhood' Projects Will Require Disciplined Approach, Report Says

Groups that plan to apply for federal money to help create “Promise Neighborhoods” to fight poverty will have to demonstrate “an unusual degree of discipline and clarity” to make the projects succeed, a new report by the Bridgespan Group says.

The Education Department’s Office of Innovation and Improvement will award one-year planning grants in 2010 to nonprofit groups in 20 cities that want to create Promise Neighborhoods — that is, projects modeled after Harlem Children’s Zone, which provides a comprehensive set of services in a specific area to poor children from birth through college.

Drawing on its experience working with antipoverty groups, Bridgespan — a nonprofit consulting group — predicts that policy makers working on such projects will be pressured to base crucial decisions on political considerations rather than on objective criteria, while local leaders will be tempted to spread resources too thin to create real change.

The report, “Realizing the Promise of Promise Neighborhoods,” offers five tips to help Promise Neighborhood leaders achieve their aim of breaking the cycle of poverty:

Create common goals, focusing on educational success. “Education is the single most-effective way to end the cycle of inter-generational poverty.”

Because the pressure to show results will be enormous, turn to programs that have evidence they work.

Create Promise Neighborhoods that are small enough to allow available resources to reach enough children and families to make a real difference.

Create a “learning community” that allows for testing and refining strategies.

Ensure that the organization leading the project has strong management and leadership and the ability to raise the money needed for long-term success.

President Obama has proposed $10-million for the 2010 planning grants, but Congress has not yet allocated the money.

See The Chronicle’s recent article about Promise Neighborhoods.

— Suzanne Perry

November 10, 2009

Former Gates Official Named to Lead U.S. Agency for International Development

Rajiv J. Shah, a former official with the Bill & Melinda Gates Foundation who currently works at the U.S. Department of Agriculture, has been nominated to head the U.S. Agency for International Development.

The nomination comes as a relief to some aid groups, which have assailed the Obama administration for leaving the post vacant for nearly a year.

Mr. Shah could face a relatively smooth vetting process, as he has already been confirmed once this year by the Senate for his current job as under secretary for research, education, and economics.

Before joining the U.S. Department of Agriculture, Mr. Shah served as director of agricultural development with the Gates Foundation. Previously, he was the foundation’s director of strategic opportunities and deputy director of policy and finance for global health. In these roles, he helped create an immunization program that raised more than $5-billion to immunize children around the world.

As head of agricultural efforts for Gates, Mr. Shah has focused on helping small farmers in developing nations increase how much food they produce and increase their ability to sell their crops in world markets.

Raymond C. Offenheiser, president of Oxfam America, called Mr. Shah “well positioned to lead this crucial U.S. agency.”

“We look forward to working with Shah and USAID to reinvigorate and restore the agency’s capacity to lead development efforts around the world,” Mr. Offenheiser said in a press release.

— Caroline Preston

November 09, 2009

Senate Republicans Worry Charitable-Deduction Limits Could Be Revived

President Obama’s proposal to limit tax breaks for charitable gifts and other itemized deductions to help pay for a health-care overhaul has so far gone nowhere in Congress.

But Senate Republicans fear the stake has not been driven completely through the proposal’s heart. “Please join us in protecting the full value of the charitable deduction by opposing any amendments to the health-care reform bill that impose a cap on itemized deductions,” 30 senators wrote in a letter last week to their Senate colleagues.

Sen. John Thune, of South Dakota, led the effort, saying in a statement that “the American tradition of charitable giving is particularly important in difficult economic times.”

Several Senate Finance Committee members in September proposed adding caps on the value of itemized deductions to their committee’s health-care bill. But that idea did not make it into the committee’s final text. The bill would raise money in other ways, including an excise tax on insurers offering high-cost, or “Cadillac,” health plans.

The House version of the health-care bill, adopted on Saturday, would impose a surtax on the wealthiest Americans.

Sen. Harry Reid, the Senate majority leader, is now crafting a bill to bring to the Senate floor, merging the finance committee’s text with one adopted by the Health, Education, Labor, and Pensions Committee.

— Suzanne Perry

Foundation Leaders Enjoy Access to White House

It seems foundation leaders are making house calls on the Obama administration.

As part of an effort to be more public about who is meeting with the president and other officials, the administration last month released the names of people who have visited the White House and the adjacent offices of the executive branch.

The list is not comprehensive and only covers the first six months of Mr. Obama’s term, but it shows at least eight philanthropy executives have made visits, some multiple times. (The names of other foundation leaders may appear on the list, but The Chronicle was unable to confirm them.)

The list includes Gara LaMarche, president of the Atlantic Philanthropies; Steve Gunderson, chief executive of the Council on Foundations; Luis Ubiñas, chief executive of the Ford Foundation; Carol Larson, chief executive of the David and Lucile Packard Foundation; Risa Lavizzo-Mourey, chief executive of the Robert Wood Johnson Foundation; Judith Rodin, president of the Rockefeller Foundation; Darren Walker, Rockefeller’s vice president for foundation initiatives; and Sally Osberg, chief executive of the Skoll Foundation.

The executives say they visited the White House to discuss specific national issues related to their grant making and many attended a June event marking the start of the White House Office of Social Innovation and Civic Participation.

Mr. Gunderson, who went to the White House and its nearby offices eight times, says the visits are a sign that the Obama administration is serious about its pledge to work with foundations.

“I jokingly say that I’ve been to the White House more times since January than during my entire 16 years in Congress! That says something about this administration’s commitment to partnership with philanthropy,” he writes in an e-mail message.

Mr. LaMarche, of Atlantic, says his nine or so visits include a lunch with Valerie Jarrett, a senior adviser to Mr. Obama, lunch with Cecilia Muñoz, director of intergovernmental affairs, a cocktail party, and a bill signing.

But he somewhat plays down his access to the halls of power.

“I am just pleased that I visited the White House seven times more often than Oprah,” he writes in an e-mail message.

— Ian Wilhelm

Khazei Senate Campaign Ads Highlight His National-Service Work

Alan Khazei, the nonprofit leader who is hoping to succeed Edward M. Kennedy as a Democratic senator from Massachusetts, is highlighting his national-service work in two new advertisements.

Both spots, one produced for television and the other for the Internet, applaud his work building City Year, the youth service corps, and fighting for the Edward M. Kennedy Serve America Act, a bill signed into law last April that will expand the country’s national-service programs.

“He led a movement to help craft and pass national legislation all from his office as citizen,” says the Internet ad. “Imagine what he could do in the Senate.”

“I’ve always believed one person has the power to change things,” Mr. Khazei says in the television commercial. “So I started City Year and we created 15,000 jobs teaching kids, rebuilding communities.”

Mr. Khazei took a leave of absence from his post heading Be the Change, a civic-engagement nonprofit group in Boston, to run in the Democratic primary on December 8 for the seat that was vacated when Senator Kennedy died. Be the Change manages ServiceNation, a coalition of groups that promote volunteerism and national service.

The Internet ad also plays with Mr. Khazei’s name: “Daisy? No, Khazei.” “Hazy? No, Khazei.” “Jay-Z? No, Khazei.”

The television ad:

The Internet ad:

— Suzanne Perry

November 04, 2009

New York Voters Approve Prisoner Volunteer Proposal

Buried within this week’s election coverage is the news that New York State voters approved a proposal that allows prisoners to volunteer at nonprofit groups.

Technically, the proposal changes the state constitution so that the legislature can pass a bill to permit inmates in state and local correctional facilities to work with charities. Before, the state said prisoners cannot “be farmed out, contracted, given, or sold to any person, firm, association, or corporation,” including charities.

According to The New York Times, New Yorkers overwhelmingly supported the idea, with 67.6 percent voting for the proposition.

Proponents of the change said it would assist charity work and help rehabilitate convicts.

“It can be helpful in repaying society, rehabilitating them, and re-acclimating them to people in the world,” Assemblyman Jeffrion L. Aubry, a Democrat from Queens and chairman of the Assembly’s Correction Committee, told The Times.

However, some people have raised questions about which charities will benefit and whether they will offer political favors to do so.

“The parceling out of these favors establishes a new source for the favoritism and corruption that is already so prevalent in our political life,” writes Daan Zwick, a Rochester resident, in a letter to the editor of the Democrat and Chronicle newspaper.

— Ian Wilhelm

November 03, 2009

Nonprofit Workers Seek Political Clout

As Virginia voters decide today who will be their next governor, nonprofit workers in the state have been pushing the candidates to speak up on charity issues.

The V3 Campaign, an advocacy group in Washington, asked the 350,000 people who work at nonprofit organizations in Virginia to sign an online petition asking the candidates to appoint a “senior official” in the state capital who would encourage volunteering, identify partnerships between local government and charities, and in general advocate for nonprofit interests.

The group has made its pitch on economic grounds, saying that nonprofit efforts generate $8-billion in wages and $461-million in tax revenue for Virginia.

While neither of the candidates — Republican Bob McDonnell or Democrat Creigh Deeds — have endorsed the plan so far, there are signs that the idea is gaining traction elsewhere.

In Connecticut, for example, Stamford Mayor Dan Malloy has developed a “three-point plan” for charities as part of his potential campaign for governor in next year’s election. (Mr. Malloy, a Democrat, has formed an exploratory committee but has not yet entered the race.)

The politician says he would create a new, commissioner-level position to oversee a Nonprofit Human Services Cabinet. “The state should elevate a single individual whose purview and responsibility would be to serve as a representative and voice for nonprofits in Connecticut’s executive branch,” the plan says on his Web site.

Robert Egger, the founder of V3, says, “This is the first time I’ve seen anyone take this tone.”

Read The Chronicle’s 2008 article about V3. (A paid subscription or temporary pass is required to view the article.)

— Ian Wilhelm

October 27, 2009

IRS Focuses on Tax-Avoidance Efforts of Very Wealthy Individuals

The Internal Revenue Service has started a new audit program that will try to stop very rich individuals from using “complex financial arrangements” — including private foundations — to avoid paying taxes.

The new Global High Wealth Industry group “will centralize and focus IRS compliance expertise involving high-wealth individuals and their related entities, which can often have an international component,” Douglas H. Shulman, Commissioner of Internal Revenue, told a Washington conference of the American Institute of Certified Public Accountants.

“For a variety of reasons, including valid business reasons, many high-wealth individuals make use of sophisticated financial, business, and investment arrangements with complicated legal structures and tax consequences,” Mr. Shulman said. “Many of these arrangements are entirely above board; others mask aggressive tax strategies.”

Mr. Shulman said examples of these complex arrangements could include “trusts, real-estate investments, royalty and licensing agreements, revenue-based or equity-sharing arrangements, private foundations, privately held companies,” and partnerships that “require looking at the entire, and often huge, spectrum of transactions and entities.”

A single high-wealth individual “may have actual or beneficial ownership of numerous related entities, sometimes alone and sometimes along with other family members or business associates,” Mr. Shulman said.

Initially, the IRS program will examine individuals with tens of millions of dollars of assets or income, the commissioner said.

— Grant Williams