May 2008
May 30, 2008
Grants Offered to Groups That Offer Ideas for Cleaning Up Elections
Mobilize.org, an “all-partisan” network focused on encouraging young people to become more fully engaged in the political process, is seeking grant proposals for innovative projects that encourage clean election practices at the local, state, and national level.
The organization is seeking the proposals by June 15, in anticipation of its Democracy 2.0 Entrepreneur Grant Summit, Money in Politics, to be held July 18 through 21, in Denver.
In partnership with the Sunlight Foundation and Common Cause, Mobilize.org is, according to an announcement on its Web site, “focusing efforts on empowering members of the Millennial Generation to develop innovative clean elections practices, emphasizing the creation of public finance reforms at the local and state level. These types of reforms are intended to give voters more control over the government by making politicians accountable to voters rather than wealthy campaign contributors,” according to the announcement.
At the meeting in Denver, the announcement says, grant winners will “each receive . . . between $3,000 and $5,000 and more importantly, will receive the support of Mobilize.org and our extensive partner network to champion their proposal and create systemic and long lasting change in the way elections are run.”
For more on how nonprofit groups can engage the millennial generation, see the transcript of The Chronicle‘s recent online discussion on the subject. And to share your opinion, click on the “comments” link below.
May 29, 2008
Senator Steps Up Pressure on College Endowments
Sen. Charles Grassley of Iowa is still considering proposing legislation that would require colleges and universities to distribute at least 5 percent of their endowments each year..
Mr. Grassley, the senior Republican on the Senate’s powerful Finance Committee, wrote in an opinion article published in The Chronicle of Higher Education to express concern that colleges and universities are not doing enough to make higher education more affordable.
Several major universities — including Harvard University, Yale University and Stanford University — have announced plans in recent months to reduce tuition costs and increase aid to students from lower- and middle-income families. Those plans followed a Finance Committee hearing last fall in which Mr. Grassley and others called for more scrutiny of college endowments.
But while the changes have mollified the concerns of some observers, Mr. Grassley writes that he is not yet convinced that all colleges and universities are doing enough to justify their tax-exempt status.
“Not only are higher-education institutions exempt from federal taxes, but their endowments are tax-free, and donations to them are tax-deductible. Part of the recent endowment spike came from the aggressive use of off-shore tax-avoidance strategies,” he writes. “Taxpayers pay for federal tax incentives to make higher education more accessible and affordable through 529 college-savings plans, a deduction for taxpayers filing jointly of up to $4,000 for tuition (depending on income), and the tax deductibility of interest on student loans.
“Such favorable tax treatment came through Congress, specifically through the Senate Finance Committee. Congress has an obligation to make sure those tax policies are working as intended.”
May 21, 2008
Government Drops Inquiry Into Obama Church
The Internal Revenue Service has dropped its investigation into allegations the United Church of Christ violated federal laws on electioneering.
In a letter. to the church, the IRS said the church’s responses to its inquiry had satisfied the tax agency that the organization had not broken any laws.
The IRS notified church officials in February that the government had a “reasonable belief” that the church had engaged in forbidden political activities when Sen. Barack Obama spoke at a major conference held by the church last year in Hartford, Conn. The IRS also expressed its concern that 40 volunteers for Mr. Obama, an Illinois Democrat who belongs to the church, “staffed campaign tables outside the [convention] center to promote” Mr. Obama’s presidential bid.
Under federal law, churches and charities must not participate in a political campaign by supporting or opposing a candidate for public office.
Officials of the United Church of Christ denied any wrongdoing. They told the IRS that they extended the invitation to Mr. Obama months before he announced his candidacy and that Mr. Obama was asked to speak about how his personal faith intersected with his public life.
What’s more, the church said it did not authorize campaign volunteers for Mr. Obama to set up tables near the convention center’s entrances, which are on public property.
House of Representatives Passes IRA Incentive
The U.S. House of Representatives on Wednesday passed a bill that would renew a tax break that encourages older Americans to give money from their individual retirement accounts to nonprofit causes.
Until December 31 of last year, donors age 70½ or older were able to transfer up to $100,000 to charity from their individual retirement accounts each year without paying income taxes on the money.
Members of Congress have been working to revive the tax break, and the House on Wednesday approved legislation that would extend the break for one year, from January 1, 2008, through December 31.
Before the bill passed the House Ways and Means Committee, a Democratic member of the committee unsuccessfully proposed shaping the measure to encourage colleges to lower their tuition costs.
Rep. Peter F. Welch, from Vermont, wanted to forbid colleges from receiving IRA rollover gifts if the institutions were not using their endowments to reduce tuition for needy students or to help veterans attend.
Foundation Leader on Inside Track to Congress
The leader of a Washington foundation is widely expected to become the newest member of Congress.
Donna Edwards, executive director of the Arca Foundation in Washington, is the favorite to win a June 17 special election to represent Maryland’s Fourth Congressional District.
Ms. Edwards, a Democrat, defeated Rep. Albert R. Wynn, who now holds the seat, in the Maryland primary in February.
Mr. Wynn has since decided to vacate his seat — a decision that is expected to allow Ms. Edwards to get a head start in Congress and solidify her effort to win the seat in November’s general election.
Ms. Edwards said during a recent speech at the Council on Foundations annual meeting that her experience in the nonprofit world will inform her decision making as a lawmaker.
“You’re going to have yet another friend on Capitol Hill,” Ms. Edwards told the foundation leaders.
May 15, 2008
Senator Dodd to Introduce Bill to Improve AmeriCorps Educational Grants
Sen. Christopher Dodd, Democrat of Connecticut, plans to introduce legislation on Friday to increase the value of the educational awards earned by participants in AmeriCorps, the federal national-service program, and make them tax-exempt.
The senator, a former Peace Corps volunteer, plans to introduce the AmeriCorps:Together Improving Our Nation (ACTION) Act of 2008, according to a statement from his office.
People who complete a year of full-time service in AmeriCorps, often at nonprofit groups, now receive $4,725 in money they can use to take college courses. The new legislation would raise that amount “to reflect the rising cost of college,” the statement said.
Senator Dodd has scheduled a news conference on Friday to provide further details of the legislation, which would also make the chief executive of the Corporation for National and Community Service—the federal agency that operates AmeriCorps—a member of the president’s cabinet.
Abortion-Rights Group Faces Backlash After Obama Endorsement
NARAL Pro-Choice America, the abortion-rights group, is feeling a backlash after endorsing Barack Obama for president on Wednesday.
Allison Fine, author of A. Fine Blog, writes that “e-mails started to fly around yesterday” from supporters of Hillary Clinton, who is challenging Mr. Obama for the Democratic nomination.
“In pained tones the senders, my circle of Hillary supporters, expressed their shock that one of the preeminent pro-choice organizations, one that they have supported in good times and bad, had double-crossed them in the eleventh hour of the presidential campaign.”
Ms. Fine, an author and senior fellow at Demos: A Network for Change and Action, a public-policy research organization in New York, criticizes NARAL for “spitting in the eye of the strongest woman candidate in the history of the country,” rather than waiting for three weeks, when the Democratic primaries will be over.
NARAL may be suffering from the panic that is afflicting many “last century” membership organizations as their donors age, prompting them to “flail around” trying to attract young people, she adds. “I would be happy to tell you about far more graceful ways to enter the connected age than scorning your core constituency,” she writes.
In explaining on the Huffington Post why NARAL’s political action committee backed Mr. Obama, Nancy Keenan, the group’s president, praises the senator’s record on reproductive-health issues and says he will be able to unite Americans with different viewpoints.
“He has reached new generations and energized young voters, independent voters, and Republican voters,” she writes. “He’s the candidate of the future.”
The reaction to that post was mixed, but many commenters praised NARAL’s move. “Although the backlash may seem overwhelming please understand that a new generation of young ladies is ready to take up the call for action,” one wrote, saying it made no sense to support a candidate simply because she is a woman.
What do you think? Did NARAL make the right decision to back Senator Obama? Will it suffer by alienating some of its donors? Or win by attracting new ones?
Cindy McCain Joins Board of Montana Military Charity
Cindy Hensley McCain, wife of Sen. John McCain, the Republican presidential contender, has joined the board of Grateful Nation Montana, a new charity that provides scholarships and other services to children of Montana soldiers killed in Iraq or Afghanistan.
“There are not many more noble causes than the young soldiers who have given their lives for the cause of freedom. And, especially for me as a military mother, it is certainly significant to support this newly founded organization as a board member,” Ms. McCain said in an e-mail message.
Grateful Nation Montana, in Conrad, Mont., was started by David Bell, an insurance executive, and John McCarrick, a lawyer. Mr. Bell said the group — which is working with the Montana state university system to provide tutors and mentors to the children who get scholarships — is a pilot project that the organization hopes can be spread across the country.
Ms. McCain is the mother of two sons who are in the military.
(To read more about charities that are helping families recover from the wars, see The Chronicle’s special report.)
May 14, 2008
Lawmaker Proposes New Twist on IRA Donation Incentives
Charities have been facing an uphill battle persuading Congress to make permanent a tax break that encourages older Americans to give money from their individual retirement accounts to nonprofit causes.
Now a Democratic lawmaker is pushing the idea — but he wants to do so in a way that encourages colleges to lower their tuition costs, The Chronicle of Higher Education reports.
Rep. Peter F. Welch, a Democrat of Vermont, wants to forbid donors from taking advantage of the tax break if they give their money to colleges that are not using their money to reduce tuition.
In a letter to the House Ways and Means Committee, Mr. Welch said wealthy colleges were among the biggest beneficiaries of those IRA distributions and should not be eligible to receive them unless they started using their endowments “specifically for containing college costs” for needy students. He urged the Ways and Means Committee to modify the Internal Revenue code as part of its drafting of a tax bill under consideration.
Mr. Welch has previously proposed requiring colleges to spend at least 5 percent of their endowments every year, and to report annually on how much of their endowments had been spent.
May 09, 2008
IRS Updates Rules on Dislosing Business Activities
The Internal Revenue Service has updated its guidelines that explain how charities must make public their Form 990-T filings, which list business activities not directly related to a charity’s mission.
As part of the Pension Protection Act of 2006, charities that file the Form 990-T must now make their filings available for public inspection.
New IRS reporting guidelines released this week clarify the rules behind this requirement. Most notably, the guidelines say nonprofits must make filings available for three years after their filing date. The requirement applies to all Form 990-T filings made after August 17, 2006.
The tax agency’s guidelines also state that charities do not have to provide supporting documents and attachments that do not relate to the imposition of unrelated business income tax.
As a result, nonprofit groups do not have to make public Form 5471 (Information return of U.S. persons with respect to certain foreign corporations), Form 8886 (Reportable Transaction Disclosure Statement), and Form 8913 (Credit for federal telephone excise tax paid).
May 08, 2008
A Project to Create More Hillary Clintons
Despite Sen. Hillary Clinton’s historic run for the presidency, women are greatly underrepresented in the U.S. political system – -a scenario the White House Project is attempting to change.
Marie Wilson, the group’s president, told a session at a Council on Foundations conference about her group’s efforts to train women across the country to run for political office, calling it an example of nonpartisan political activity that is permitted under the tax code governing charities.
The United States ranks 71st in the world in the percentage of women serving in parliament (here, the House of Representatives). “It is not really a representative democracy,” said Ms. Wilson.
Ms. Wilson, who headed the Ms. Foundation for almost two decades before starting the White House Project in 1998, said many of the women who received grants from the foundation were creating innovative social programs that focused on HIV/AIDS, health care, small loans, and promoting a “living wage.”
“That’s the government in exile,” she thought, and wanted to find a way to give them more power. The White House Project, in New York, has trained 1,700 women over the past three years in the mechanics of running for office, touching on campaigning, communications, and fund raising, Ms. Wilson said.
But it has found the most effective way to persuade them to become candidates is to give them examples of other women who have made that leap — for example, by showing a documentary about Shirley Chisholm, a black congresswoman who ran for the Democratic presidential nomination in 1972. Many women are reluctant to step forward because they see so few other politicians who look like them, she said.
In that sense, she said, Senator Clinton has inspired more women to want to try politics, showing “you can get to the highest level.”
May 07, 2008
IRS Filing Deadline Is Fast Approaching for Small Charities
Next week comes the first annual deadline for the smallest nonprofit groups to comply with a new federal requirement to file annual information with the Internal Revenue Service, and a group of accountants in Connecticut want to make sure organizations are ready.
New tax law requires nonprofits groups with $25,000 or less in annual revenue to file the new Form 990-N informational tax return by the 15th day of the fifth month after the end of a fiscal year. For those operating on a calendar year, for example, the deadline would be May 15.
Previously, small groups were exempt from filing any returns with the IRS. To inform them of the new requirement, the IRS sent out 650,000 letters last year, and posted an online question-and-answer page meant to help organizations comply.
But Adam P. Cohen, a West Hartford accountant, thinks more ought to be done to get the word out about the new rule and to teach organizations how to file. So, in conjunction with the Connecticut Society of CPAs and a local group that offers pro-bono accounting services, Mr. Cohen has publicized information about the Forms 990-N, and is running free clinics this week to assist in their preparation.
Charity officials can visit the clinics on Friday afternoon at any of three libraries around the state to learn how to file the online Forms 990-N, also known as “e-postcards.”
The form requires only basic information, such as the name of a principal officer, a mailing address, and confirmation that gross receipts total less than $25,000. Still, some charity observers worry that many small organizations may be intimidated by the federal forms, and that many more may not even be aware they exist.
If an organization fails to file the Form 990-N three years in a row, the IRS will automatically revoke its tax-exempt status.
“My suspicion is that there are many micro-nonprofit groups that don’t know about the requirement,” Mr. Cohen says. “You might have the checkbook for your kid’s soccer league, but the information about your responsibilities has not reached you.”
— Debra E. Blum
May 03, 2008
Spreading Innovative Solutions to Society's Problems
A new project Public Innovators, seeks to build stronger ties between government officials and social entrepreneurs.
The premise is that people from both worlds have a lot to share with each other.
Social entrepreneurs have developed creative new approaches to many of the pressing problems that government officials are trying to solve in areas like education, health care, and poverty. Government, in turn, has the resources that social entrepreneurs need to expand the reach of their programs and create systemic change.
“What social entrepreneurs are really doing is they’re responding to market failures, not unlike a regular entrepreneur responds to market opportunities,” says Andrew Wolk, chief executive of Root Cause, the Cambridge, Mass., nonprofit group behind Public Innovators. “They are trying to do that by creating transformative, innovative solutions that are sustainable.”
Together with the Aspen Institute, a Washington think tank, Root Cause has published a report that discusses how government agencies could use their influence – and grant dollars – to encourage more innovative approaches to solving social problems.
Among the report’s recommendations: Government agencies should give nonprofit groups greater latitude in how they spend government grants to encourage creativity, but at the same time, set performance standards and publish results.
Over the next 18 months, Root Cause and Aspen plan to hold a series of meetings in cities nationwide to discuss how government officials and social entrepreneurs can do a better job of collaborating. Those discussions will be followed by a conference for government officials to come together to share lessons learned about working with social entrepreneurs.
May 01, 2008
How the Next President Plans to Help Young People
America’s Promise has asked the three presidential candidates about their views on children’s issues and how they were personally affected by the organization’s five promises to today’s young people — providing caring adults, safe places, a healthy start, effective education, and opportunities to help others.
The politicians’ video responses have been posted on the group’s Web site. While short on detail, the videos offer some insight to the three’s priorities.
Sen. Hilary Clinton, a Democrat from New York, cites her experience working with the Children’s Defense Fund and supporting children’s health care.
Sen. John McCain, Republican from Arizona, says his generation was lucky to have parents who were able to fulfill the five promises with their children, but today’s young people face more obstacles.
Sen, Barack Obama, Democrat from Illinois, discusses his dedication to his daughters and how the last promise — giving children the opportunity to aid others — is perhaps the most important.
To learn more about how the senators stand on other nonprofit issues, read The Chronicle’s campaign coverage.
— Ian Wilhelm