May 2009
May 27, 2009
White House Official Defends Deduction Proposal
An Obama administration official is advising charities not to worry about the White House’s plan to limit charity tax breaks for the wealthy and to keep in mind the “broader context” of President Obama’s plan.
Under the proposal, which has drawn fire for its potential to damage charitable giving, the tax break for itemized deductions would be limited to 28 cents for every dollar spent by couples who earn more than $250,000 (or individuals earning more than $200,000), starting in 2011.
Under the current system, taxpayers in the highest tax brackets can write off the same percentage as their tax bracket, or up to 35 percent.
The administration says the itemized deduction limits would raise $267-billion over 10 years to help pay to overhaul the country’s health-care system.
“To a large extent this proposal has been perceived among the nonprofit community that’s reliant on charitable giving as really piling on,” Jeffrey Liebman, chief economist at the White House Office of Management and Budget, said in remarks to members of the District of Columbia Bar.
“That we’re in a moment in history where, because the stock market has fallen as far as it had, charities are short on resources,” he said. “The folks who charities try to assist have probably greater needs than they’ve had at any time in recent decades. And how in the world could we be doing something that might discourage charitable giving among some of the high-income folks that charities like to target for donations?”
But Mr. Liebman said charities need to keep in mind that changes to the health-care system should reduce costs for charities that currently help the uninsured, and should drive down health-care expenses for small organizations.
What’s more, Mr. Liebman said, scholarly research shows that a rising stock market encourages Americans to make charitable contributions.
“What’s going to determine whether there’s resources out there for high-income people to make contributions to charitable organizations is how the economy does,” said Mr. Liebman. “If our general economic strategy works, and health care is an important part of the economy being strong in the medium to the long term, basically everything is going to be fine for charitable giving. And if it doesn’t, it doesn’t matter what our tax policy is — things are still going to be crummy.”
He concluded: “The broader point here is, getting the economy going, doing health-care reform, are good things that, if they work, everyone in the country is going to be in good shape, including people who may have to pay a little more taxes with these provisions.”
Nonprofit Leader Seen as Next Head of U.S. Foreign-Aid Unit
Paul Farmer, co-founder of the nonprofit group Partners in Health, seems to be among a shrinking list of contenders to lead the U.S. Agency for International Development, Foreign Policy magazine reports on its blog.
A spokesman for Partners in Health confirmed to Foreign Policy‘s Laura Rozen that Mr. Farmer met with Secretary of State Hillary Clinton last week.
Mr. Farmer, a medical doctor and winner of a a MacArthur Foundation “genuis” award, started Partners in Health over two decades ago. Best known for its projects in Haiti, the charity is credited with pioneering an approach to community health based on an understanding of the connections between poverty and disease.
Foreign Policy reports that the selection of Mr. Farmer could come with a reorganization of the U.S. Agency for International Development, with the goal of better integrating all non-military U.S. assistance.
One international health activist who spoke to Foreign Policy on the condition of anonymity said that Mr. Farmer might be appointed to lead USAID on a temporary basis, and then fill a yet-to-be-created position focused on global health.
May 26, 2009
IRS Explains How Organizations That Close Must Notify the Government
The Internal Revenue Service has released a fact sheet that explains the steps that tax-exempt organizations should follow to notify the government if they close or merge their operations.
“Most tax-exempt organizations that end their operations, either by shutting down, transferring their assets, or merging with another organization, must inform the IRS about the details of the action,” the revenue service said.
May 21, 2009
Independent Sector Seeks Changes in White House Lobbying Restrictions
Independent Sector, a national coalition of charities and foundations, has asked the Obama administration to rescind or modify rules that restrict contacts between lobbyists and federal officials regarding the $787-billion economic-stimulus law enacted in February.
The rules, which the White House said it designed to ensure that spending decisions are not made “in response to improper influence or pressure,” say that registered lobbyists may communicate with administration officials about specific stimulus projects only in writing — no phone calls or in-person contacts.
“While we applaud the administration’s efforts to bring the highest standards of transparency and accountability to the distribution and use of government funds intended to strengthen our economy and assist the millions of Americans who are suffering in these difficult times, we believe the prohibition on conversations between registered lobbyists and government officials is deterring, rather than enhancing, such accountability,” said Patricia Read, senior vice president of public policy and government affairs at Independent Sector, in a letter to the White House Office of Management and Budget.
Ms. Read said that many nonprofit organizations that are “critical partners to government in delivering vital services to people in need” employ staff members or hire outside consultants “to assist them in sharing their expertise and experience with government officials.”
When these people meet certain criteria established under federal law, they register as lobbyists and file regular, detailed reports on their activities that are on the public record, Ms. Read said.
Many of these charity lobbyists “have substantial program responsibilities as well,” said Ms. Read, “and are frequently the most knowledgeable and capable representatives to communicate their organizations’ concerns, questions, and recommendations to the relevant government officials.”
‘Unintended Consequences’
But Ms. Read said the directives in the administration’s rules were preventing registered charity lobbyists from playing that role.
“It now appears that those directives have had further unintended consequences of restricting all communications between federal agency officials and registered lobbyists, as we have heard numerous reports that cautious agency staff are now refusing to talk to registered lobbyists on any matter, including those unrelated to stimulus funds,” said Ms. Read.
Independent Sector is asking the White House to rescind or modify the restrictions “to permit all individuals and organizations — including those who register as federal lobbyists — to share their knowledge and insights, as well as their critiques, with public officials regarding economic recovery efforts or any of the many pressing matters facing our nation,” Ms. Read said.
She added that Independent Sector would welcome the chance to confer with the administration on alternatives “that might accomplish our shared goal of ensuring the fair, responsible, and effective distribution of [economic-stimulus] funds to achieve economic recovery while protecting the constitutional rights of individuals and organizations represented by registered lobbyists.”
The White House has said that its rules, which also have been criticized by other organizations, are tough but fair.
See The Chronicle’s coverage of the conflict over the stimulus rules and separate rules limiting the ability of lobbyists to get administration jobs.
May 20, 2009
Fight Continues for Federal Program to Help Small Charities
President Obama did not include money in his fiscal 2010 budget proposal for a program to provide grants to help small and medium-size charities get training and management help that was authorized by a new national-service bill.
But the plan to spend $25-million over five years on a Nonprofit Capacity Building Program is not dead.
Sen. Max Baucus, the Senate Finance Committee chairman, who championed the program during the debate over the national-service bill, still considers it a priority and will fight for it when Congress formally appropriates spending for 2010, one of his aides said.
The Edward M. Kennedy Serve America Act, signed into law last month, included a last-minute amendment — proposed by Senator Baucus, Democrat of Montana, and Senator E. Grassley, Republican of Iowa — that called for spending of $5-million a year for five years on the Nonprofit Capacity Building Program, which would be housed in the Corporation for National and Community Service.
The spending, which would be matched by money from nonfederal sources, would go to nonprofit organizations that could train small and medium-size charities in areas like raising money, writing grant proposals, and complying with tax laws.
But when the White House submitted its 2010 budget plan this month, it did not propose any spending on the program.
Sandy Scott, a corporation spokesman, acknowledged that the money was missing but said the president had proposed a 29-percent increase in the corporation’s overall budget, which would bolster a range of programs that help nonprofit groups — for example, by providing more AmeriCorps members, who help charities recruit and manage volunteers.
“In essence, the entire spectrum of the corporation’s programs help to build nonprofit capacity,” he said. However, he added, the corporation was in the process of seeking further ideas from nonprofit groups on how to carry out the Serve America Act.
Tim Delaney, president of the National Council of Nonprofits, which represents state nonprofit associations, says his group will press Congress to allocate money for the “capacity-building” program when it adopts the 2010 appropriations legislation.
He said it is the only budget proposal specifically geared to help small and medium-size charities, which could use the money to strengthen their ability to contribute to the country’s economic recovery. “They don’t have access to lawyers, accountants, consultants, and others,” he says.
Nonprofit Groups Meet With Administration About Summer Service Project
Leaders from more than 300 nonprofit organizations across the country attended a meeting today in Washington with White House and administration officials to discuss ways to mobilize people to volunteer this summer.
First Lady Michelle Obama was among those who addressed the group.
“A diverse group of organizations came together today to discuss ways to encourage and facilitate service all across the country this summer,” said a statement that was forwarded by the Corporation for National and Community Service, which participated in the meeting.
The meeting was not publicized or open to the news media, but the statement said that “more details on this summer project will be forthcoming in the next few weeks.”
Among those attending were nonprofit and foundation associations including the Council on Foundations, Independent Sector, and the National Council of Nonprofits. One participant, who asked not to be named, said the president planned to issue a call to service in early June.
State Department Uses Text Messages to Raise Money for Pakistan
In an effort to help Pakistani refugees, U.S. Secretary of State Hillary Clinton is using a relatively new fund-raising tool: text messages.
The secretary announced yesterday that by typing the word “swat” into cell phones and dialing 20222, Americans can make a $5 gift to the United Nations High Commissioner for Refugees.
The U.N. group is providing tents, clothing, food, and medicine to the almost 1.5 million people who have been displaced in the Swat Valley region of Pakistan, where the government is fighting the Taliban.
Ms. Clinton did not say how much she expected to garner with the campaign, but did say, “I’m hoping that we’ll have a big response to the text messaging. Just think if a million people in the United States gave at least $5, that’s $5-million. And that would be a significant contribution from ordinary citizens, just people who care about what’s happening.”
Text messages are becoming more popular as a fund-raising tool. Read The Chronicle’s article about new ways charities are using the technology.
(A paid subscription is required to view the Chroncile article.)
May 19, 2009
Senate Committee Discusses Change in Treatment of Hospitals' Tax Status
The two top members of the Senate Finance Committee have released what they call policy options for revamping the nation’s health-care system that include a change in how the tax-exempt status of nonprofit hospitals would be handled under federal law.
Under the proposal, “nonprofit hospitals would be required to maintain a minimal level of charitable activity, limit charges to uninsured, indigent patients, and limit aggressive collection actions. Hospitals that do not meet those requirements would be subject to an excise tax.”
Sen. Max Baucus, the Montana Democrat who chairs the finance committee, and Sen. Charles E. Grassley, the Iowa Republican who is the most senior member of his party on the committee, said the committee would begin to draft legislation to change the country’s health-care system next month.
The Internal Revenue Service currently uses a “community benefit” standard to determine a hospital’s eligibility for nonprofit status.
Under a 40-year-old IRS ruling, nonprofit hospitals must show that they provide benefits to the people and neighborhoods in the region they serve. The ruling listed five ways that hospitals can show they qualify. Among them: They can make a full-time emergency room open to all people regardless of their ability to pay. Or they can use surplus revenue to improve patient care and for medical training.
The ruling said that a hospital need not use all five methods and that its tax-exempt status would be determined by an analysis of all “facts and circumstances” involved.
Before its 1969 ruling, the IRS required that nonprofit hospitals provide charity care: free or discounted care to people who cannot afford to pay. Today, IRS officials say that while hospitals do not have to provide charity care, doing so is considered a form of community benefit.
Mr. Grassley has said the community-benefit standard is “weak” and that the IRS needs a “bright-line test” to be able to determine whether hospitals are doing enough to earn nonprofit status. Members of Mr. Grassley’s staff in the past have suggested in a background paper that a nonprofit hospital should generally be required to dedicate “a minimum of 5 percent of its annual patient operating expenses or revenues to charity care, whichever is greater.”
May 14, 2009
State And Local Governments Consider Fees on Nonprofit Groups
With state and local governments strapped for cash, they are increasingly looking for new sources of revenue — including imposing fees on nonprofit groups.
According to Governing magazine, states and localities are receiving money from the economic-stimulus package, but it’s not enough to cover budget gaps. To find revenue, some municipalities have placed fees on tax-exempt groups to pay for city or county services.
Nonprofit organizations “don’t have to pay property or sales taxes, but they are liable for fees,” the magazine says. “One Minnesota city is charging a curb fee based on property frontage as a way of generating revenue for street upkeep — and as a way to get 501c3s to chip in for the local services they receive.”
Even before the recent downturn took hold, governments considered such fees to make up for losses in property taxes.
According to a 2006 study by The Chronicle, property-tax exemptions granted to nonprofit groups in 23 of the nation’s 30 most-populous cities cost those municipalities more than $1.5-billion annually.
Microfinance Leader Nominated To State Department Position
President Obama has nominated María Otero, chief executive of Accion International, a microfinance group, to be the under secretary of global affairs at the U.S. Department of State.
The appointment requires Senate approval, which is expected in a few weeks, and comes as the State Department says it is seeking greater partnerships with international nonprofit groups.
According to Accion’s Web site, the group’s chief deputy, Catherine Quense, will serve as the interim head as a search committee looks for Ms. Otero’s successor.
Ms. Otero joined Accion in 1986 to lead its lending program in Honduras. Three years later she helped open the group’s Washington office, and in 2000 she was appointed chief executive.
As under secretary, Ms. Otero would be part of an office that oversees a variety of international issue.
According to the State Department’s Web site: “The Office of the Under Secretary for Democracy and Global Affairs coordinates U.S. foreign relations on a variety of global issues, including democracy, human rights, and labor; environment, oceans, health. and science; population, refugees, and migration; women’s issues; and trafficking in persons and avian and pandemic influenza.”
Details Posted About Stimulus Money for Nonprofit Management Help
The U.S. Health and Human Services Department has posted information on its Web site about how to apply for $50-million that was allocated by the federal economic-stimulus law to help nonprofit groups strengthen their ability to aid victims of the economic downturn.
The money, dubbed the Strengthening Communities Fund, will pay for two programs:
- The Nonprofit Capacity-Building Program, which will provide two-year awards of up to $1-million to experienced nonprofit groups that provide training and management assistance to charities. The applicants must agree to provide 20 percent of the grant’s value in cash or in-kind contributions.
- The State, Local, and Tribal Government Capacity-Building Program, which provides grants of up to $250,000 to government agencies to help them offer free training and management assistance to charities.
Both programs, operated by the Administration for Children and Families, are designed to bolster charities that are providing services like helping low-income people get jobs, earn higher wages, and get better access to state and federal benefits and tax credits.
Deadline for applications is July 7.
President Obama proposed extending the Strengthening Communities Fund in his fiscal 2010 budget.
May 13, 2009
Site Map Now Available on IRS's Web Site for Charities
A detailed site map is now available on the Internal Revenue Service’s Charities and Nonprofits Web site to help visitors find what they are looking for.
To get to the map, go to the left navigation bar on the Charities and Nonprofits site and click on EO Site Map.
“If you are unable to find the information you need on the site map, or have any suggestions to improve it, please contact us electronically at EO.Web.Comments@irs.gov and enter Site Map in the subject line,” the IRS said in its newsletter for tax-exempt organizations.
IRS Provides New Tips for Filing Redesigned Form 990
The Internal Revenue Service has released the second in a series of filing tips to help nonprofit organizations prepare their Form 990 informational tax return, the primary document that groups file each year.
The second batch of tips explains how to report executive compensation on both the “core form” filed by all organizations and the Schedule J on compensation information that some organizations must also submit.
The IRS redesigned the Form 990 for the 2008 tax year, making the most-significant changes to the form in nearly 30 years.
IRS Seeks Advice on Topics That Require More Explanation
The Internal Revenue Service is asking charities to recommend the “tax issues” that the government should focus on over the next year as it issues guidance to help organizations understand federal law.
The tax agency said it hoped the public would offer suggestions for its annual Guidance Priority List that it uses “to identify and prioritize the tax issues that should be addressed through regulations, revenue rulings, revenue procedures, notices, and other administrative guidance.”
The IRS said that the Treasury Department and the revenue service “recognize the importance of public input to formulate a Guidance Priority List that focuses resources on guidance items that are most important to taxpayers and tax administration.”
The IRS added: “Published guidance plays an important role in increasing voluntary compliance by helping to clarity ambiguous areas of the tax law.”
May 08, 2009
Obama Proposes $10-Million to Expand Harlem Children's Zone Approach
President Obama’s proposed 2010 budget includes $10-million to help nonprofit groups develop plans to expand a poverty-fighting approach that was pioneered by the Harlem Children’s Zone, a charity in New York.
The “Promise Neighborhoods” program, housed in the Education Department’s Office of Innovation and Improvement, would provide one-year planning grants to nonprofit groups to explore ways to set up programs that provide comprehensive services to poor children from birth through college.
“The core idea behind the initiative is that providing both effective schools and strong systems of support to children and youth in poverty, and thus meeting their health, social services, and education needs will offer them the best hope for a better life,” the Education Department said in its budget explanation.
Groups that develop promising plans and partnerships would be eligible for grants to carry out their ideas in 2011, the department said.
President Obama pledged on the campaign trail to create “promise neighborhoods” in 20 cities modeled after the Harlem project, which provides a comprehensive set of educational, medical, and social services to residents in a 100-block area of Harlem.
He said the government would provide half the money, and private sources the rest.
Two Women's Health Groups Criticize President's Budget
Officials from two women’s health and family planning groups have released statements expressing concern and disappointment over President Obama’s 2010 budget, released yesterday.
Officials from the Planned Parenthood Federation of America, and the National Latina Institute for Reproductive Health-- said in new releases that they were discouraged that the Obama administration did not seek to strike restrictions on government financing of abortions.
“We are disappointed that the budget did not remove restrictions on women’s ability to access the full range of reproductive heath-care services, said Cecile Richards, Planned Parenthood’s president. “Placing onerous restrictions on women is not effective public policy.” She added that her group plans to encourage the president and Congress to remove the restrictions.
Officials at National Latina Institute for Reproductive Health said Hispanic women make up almost 25 percent of women who are of reproductive age and who rely on Medicaid. Silvia Henriquez, the organization’s director said the decision to retain such restrictions, especially in a time of financial crisis for many people, “perpetuates a two-tier system in the U.S.: women with private health insurance or private funds can access abortion, but poor women cannot.”
Ms. Richards, of Planned Parenthood, said while such restrictions were disappointing, other requests in the budget were “a step in the right direction.” Among them: efforts to fight pregnancy among teenagers.
Ms. Richards also said a $10-million increase in the Title X family planning program, bringing support for the program up to $317-million, while “modest” was good news, but that more needed to be done for the program so it could keep up with inflation and demand.
Hispanic Group Expresses Concern Over Budget Provisions
Officials at the National Council of La Raza said in a new release that they are concerned over the President’s 2010 budget that was announced yesterday.
“What we have seen so far with the budget is discouraging and suggests that some of the key priorities of the Latino community are not those of the administration,” said Janet Murguia, the group’s President. “I am very surprised that the Obama administration in its first budget would mirror similar cuts made by the Bush administration.”
Ms. Murguia cited as an example the Obama administration’s decision not to increase spending for health programs that serves Hispanics, or unemployment programs for the country’s Hispanic population, even though, the group says, 11.4 percent of Hispanics are currently unemployed.
Yet the group also praised some parts of the budget.
For example, the budget requests $37-million for a program that fights mortgage fraud and predatory lending practices, $10-million for new immigrant integration programs, and a 50-percent increase in support for a housing counseling assistance program.
Ms. Murguia also said the budget doesn’t invest enough in programs for Hispanic students, but vowed to pursue more money for such programs.
Charities Criticize Obama's Proposed Cut to an Education and Technology Program
The Obama administration’s budget proposal to cut the Enhancing Education Through Technology program from $269-million down to $100-million has raised the ire of several nonprofit organizations.
The Consortium for School Networking, International Society for Technology Education, Software & Information Industry Association, and State Educational Technology Directors Association released a statement saying such cuts harm efforts to increase American competitiveness.
“During the past several months, the Obama Administration has outlined a vision of educational innovation and improvement to enable our nation’s children to compete in the global economy. But today’s budget proposal falls far short of the targeted investments needed to ensure all students have the modernized classrooms and technology-rich instruction needed to achieve this vision.”
The groups urged President Obama to reconsider the cuts and instead increase spending beyond the amount now spent — about $269-million.
Education and the Budget: A Think Tank Offers Questions to Consider
What are the key questions for policy makers and others to consider as they review President Obama’s proposal on federal spending for education programs?
The New America Foundation, a Washington think tank, spent the day combing through the proposal and developed dozens of questions to consider.
Has your organization developed a set of questions about how Mr. Obama’s spending policies should be considered? Let us know by including a link to your documents in the comments box or sending an e-mail message to our Web editor, Peter Panepento.
Obama Budget Proposes $50-Million to Help Charities Offer Social Services
President Obama has proposed $50-million in his fiscal year 2010 budget for a new program to help nonprofit groups improve their ability to provide social services to low-income and disadvantaged people.
The Strengthening Communities Fund, which was passed as part of the new economic-stimulus law, provides money to nonprofit organizations and state and local government agencies to offer training and management assistance to charities, with an emphasis on “increasing community access to public benefits.”
The stimulus law provided $50-million for the new fund, which Congress created to replace the Compassion Capital Fund, a program created by President Bush to provide money to religious and other charities. President Obama’s request would add $50-million to the Strengthening Communities Fund next fiscal year and sought no money for the compassion fund.
The Department of Health and Human Services, which operates the fund, said in its budget explanation (page 105) it is composed of two grant programs:
- The Nonprofit Capacity-Building Program, which offers money to organizations to provide training, management assistance, or money to small nonprofit groups, including religious and community-based organizations.
- The State, Local, and Tribal Government Capacity-Building Program, which offers money to help government agencies provide services to nonprofit groups.
Both programs seek especially to help charities advise low-income people how to get access to government benefits and tax credits.
International Antipoverty Groups Pleased With Budget
International programs would get a boost if President Obama’s proposed budget is approved by Congress.
The 2010 budget proposal requests roughly $2.73-billion for “development assistance” provided through the U.S. Agency for International Development, compared with $2-billion the previous year.
It also calls for increases for the Millennium Challenge Corporation, a government program that seeks to reduce poverty abroad, and for aid after natural disasters.
Jim McDonald, vice president for policy and programs at the nonprofit group Bread for the World, said those and other increases would result in nearly $2.6-billion in additional money for efforts to fight poverty abroad. Of the total $51.7-billion included in the budget for all non-military efforts abroad, about $20.5-billion would go toward poverty-focused development assistance, he said.
“We’re encouraged,” said Mr. McDonald. He described the budget as a “first cut” at trying to put greater emphasis on development assistance, and less on military efforts.
“There really is, I think, a sincere effort to ramp up the U.S. response to poverty and hunger, both here and domestically, and some of that is reflected in this budget,” he said.
InterAction, the umbrella organization of international charities, also praised the budget proposal. “The administration has followed through on its promise to begin rebuilding much-needed capacity at the U.S. Agency for International Development and reinvesting in our countries poverty-focused development and humanitarian programs,” Samuel A. Worthington, the group’s president, said in a statement.
The United Nations Foundation also praised the administration for its plans to meet the U.S. government’s obligations to the United Nations.
Despite the overall increase, some entities would face cuts.
- The Center for Cultural and Technical Interchange Between East and West, a nonprofit group known as the East-West Center, would receive just shy of $12-million in 2010 compared with $21-million this year.
- The National Endowment for Democracy would receive $100-million, 15 percent less.
May 07, 2009
Obama Budget Would Eliminate Some Social-Services Programs
The Obama administration’s proposed 2010 budget would eliminate money for some social-services programs that had been staples of the Bush era.
Several other longstanding programs would receive about as much as they do now.
The White House would eliminate spending for the Compassion Capital Fund, which helps charities and religious groups provide social services through the Department of Health and Human Services. The fund received $48-million in 2009.
Mr. Obama sought no money for abstinence education; the government now spends about $133-million on such efforts.
Mr. Obama is, however, asking for $164-million for programs designed to reduce pregnancy among teenagers.
The budget also proposed no money for a program that now offers about $10-million to rural community facilities.
Several other programs to provide services to children and families would receive the same amount as they did in fiscal 2009. Child-welfare services, for example, would receive $242-million — the same amount set aside for such services in 2009.
The department’s Social Service Block Grant program would also remain flat at $1.7-billion. The program supports groups that provide services to low-income families and individuals, including day care, employment counseling, home meal delivery, and transitional housing.
In addition, Mr. Obama’s budget would provide $301-million to the Department of Energy’s Weatherization Assistance Program, which supports charities and local governments in making homes for poor people more energy efficient. The program received $516-million in 2009.
Housing Programs Would Get 18% Increase in Obama Budget
The Department of Housing and Urban Development would receive $7.4-billion in new federal spending in the 2010 budget the Obama administration released today. The department would receive nearly $48-billion next year, an increase of more than 18 percent.
The Community Block Grants program would receive $550-million in new money, for a total of $4.5- billion, while programs to help the homeless would receive nearly $1.8-billion, an increase of $117-million.
New programs to combat mortgage fraud and lending discrimination would receive $37-million. Spending on housing counseling programs would increase by $35-million.
The president would allocate $1-billion to the National Affordable Housing Trust Fund, money local government and nonprofit groups could use to help construct, rehabilitate, and preserve low-cost housing units.
The fund was authorized by Congress last year and initially designed to be paid for through small assessments on the financial activities of the government-sponsored mortgage lenders Fannie Mae and Freddie Mac. That method for paying for the fund is on hold given the two organization’s financial difficulties.
Mr. Obama also sought $250-million for the New Choice Neighborhood Initiative to combat concentrated urban poverty. The initiative essentially updates the HOPE IV program (which received no money this year) that demolished public housing developments to create mixed-income communities. The new Choice Neighborhood program can also pay for the renovation or replacement of private housing units.
Nonprofit housing advocates praised much of the budget plan.
“We are quite pleased that the president has included the initial capitalization for the housing trust fund in the budget, though we would like the money to come from a dedicated source of revenue other than HUD appropriations,” says Sheila Crowley, president of the National Low Income Housing Coalition, in Washington. “There are important increases in some other programs and we think overall it’s a very good direction.”
Corporation for Public Broadcasting Would Get Small Increase Under Obama Plan
President Obama asked Congress to provide $502-million for the Corporation for Public Broadcasting. Included in that total is a $440-million two-year advance appropriation for the 2012 fiscal year, a $10-million increase from the amount the organization will now receive for 2011 programs.
Public broadcasting gets money in advance because its programs take a long time to plan; the advance budget allocation process also is designed to ensure that public broadcasters retain editorial independence in their program decisions.
Additionally, $36-million would support efforts to help public television and radio broadcasters convert from an analog to a digital signal.
Another provision in the budget seeks to makes $27-million available for the final phase of a joint project between the corporation and National Public Radio to replace and upgrade the public radio satellite system, and $25-million for Ready to Learn, the corporation’s early childhood literacy program.
Noting the recession, officials at the corporation said in a news release they realized President Obama had to make difficult budgetary decisions, but said they are “deeply concerned” that the budget didn’t provide emergency support for stations that face a sharp decline in money from private sources.
Moreover, they said, “the Administration did not recommend funding for the Public Telecommunications Facilities Program, a critical infrastructure program within the Department of Commerce targeted to meet the unique needs of local public television and radio stations, Ready To Teach or USDA’s Rural Digital program.”
The officials urged Congress to consider such programs and said they planned to “work closely with Congress and the administration to make our case for fully funding public broadcasting so that we can continue, and enhance the valuable programming we provide to communities across the country.”
Global-Health Groups Upset by President's Budget Proposal
President Obama’s proposal to spend $8.6-billion next year on what he dubbed a “new, comprehensive global-health strategy” has drawn ire from some global-health charities, which say he has requested far less to fight AIDS, tuberculosis, and malaria than he had previously pledged.
In a statement released this week and in the budget proposal released today, Mr. Obama described a new approach to global health that would support President Bush’s popular President’s Emergency Plan for AIDS Relief while also putting greater emphasis on efforts to prevent deaths of mothers and children and improving health systems in poor countries.
Mr. Obama’s budget proposal calls for $63-billion to be spent over six years, approximately $51-billion of which would be spent to fight AIDS, tuberculosis, and malaria. The budget calls for increases of $366-million this year for AIDS, tuberculosis, and malaria programs, and $100-million more for projects focused on other health priorities.
But some health activists expressed disappointment. Joanne Carter, executive director of the advocacy group Results, said the figures were far less than what was called for in legislation passed last summer to extend the AIDS fund. And as a candidate, Mr. Obama had pledged to increase spending on the AIDS fund by $1-billion a year.
“The president fails to put us on a path to meeting objectives laid out in that legislation,” she said in a conference call today. Ms. Carter said the president’s plan “halts the dramatic scale up of funding we’ve seen” for AIDS under the Bush administration; provides “disturbingly low” support for fighting tuberculosis, and provides no increase in support for the Global Fund to Fight Aids, Tuberculosis, and Malaria.
She and other health activists said they were alarmed that Mr. Obama seemed to be putting the breaks on expanding programs like Pepfar and the Global Fund, while the other priorities he emphasized — child and maternal health and improving local health systems — likewise would receive only small increases.
But others in the philanthropic and charity world were supportive of Mr. Obama’s budget proposal and his plan to integrate health priorities.
“Today, ‘Doctor Obama leads the next chapter in the U.S. response to global health crises, building on the record of results from the previous administration and bipartisan support from Congress,” Bono, the musician and One campaign founder, said on the charity’s blog.
Groups that work on so-called “neglected tropical diseases” such as hookworm and leprosy were also pleased with the president’s plans. Mr. Obama requested $70-million for such diseases, an 180 percent jump.
Budget Requests 29% Increase for Corporation for National and Community Service
The Corporation for National and Community Service could get close to $1.15-billion under President Obama’s 2010 budget.
That is 29 percent more than is now being spent, and about $200-million more than President Obama had proposed earlier this year. The increase reflects a spending boost authorized by the Edward M. Kennedy Serve America Act signed last month by President Obama.
The corporation is an umbrella agency that works with charities, religious groups, schools, civic groups, and other types of nonprofit organizations to provide volunteering opportunities for Americans.
Under the new budget, $220.9-million would support 500,000 Senior Corps volunteers programs such as the RSVP program, Foster Grandparents, and Senior Companions.
The new budget requests also expand the AmeriCorps program. The President is requesting that $692.3-million be directed toward four AmeriCorps programs, according to a corporation news release.
Of the four, $372.5-million would support AmeriCorps State and National Grants, $195.6-million would go to AmeriCorps National Service Trust, AmeriCorps Volunteers in Service to America would get $97.9-million, and AmeriCorps National Civilian Community Corps would get $26.3-million.
In addition, the newly created Social Innovation Fund would get $50-million. The fund was created to support nonprofit groups that are taking a new and creative approach.
The Volunteer Generation Fund, which makes grants to help states and nonprofit groups recruit volunteers and manage volunteer programs efficiently, would get $10-million.
Budget Plan Includes $164-Millon to Prevent Pregnancy Among Teenagers
The Obama administration’s proposed 2010 budget includes $164-million to create a new program to prevent pregnancy among teenagers that would be administered largely by nonprofit groups.
Much of the money would be awarded to groups that can run programs based on evidence of what works best to prevent teenage pregnancy. In addition, money would be awarded for research and evaluation to further determine what works.
The program would be administered by the Department of Health and Human Services.
Pregnancy-prevention advocates are campaigning Congress to approve the measure.
“During an economic downturn and at a time when the teen birth rate is on the rise after 14 straight years on the decline, it is particularly important that public dollars be devoted to those interventions that have evidence of success,” said Sarah Brown, chief executive of The National Campaign to Prevent Teen and Unplanned Pregnancy, a nonprofit advocacy group in Washington.
Obama Budget Will Seek $17-Billion in Cuts
President Obama’s proposed 2010 federal budget will call on Congress to eliminate or reduce spending on 121 current programs, which would save nearly $17-billion, according to administration officials.
The budget proposal will seek the elimination of Even Start, a $66-million program that provides early childhood education and adult literacy services, often through community organizations. The program is run by the U.S. Department of Education.
“Obviously, the president and the administration feel very strongly that early childhood education, done in a high-quality way, is crucially important,” an administration official said. “However, a variety of studies of Even Start have suggested that that program does not work well,” the official said. “So we are proposing that Even Start be eliminated even while we are investing in other programs that do work, including Early Head Start and Head Start.”
The official added: “That’s a general theme. We’re trying to cut back on the things that don’t work, invest more in the things that do.”
The Obama budget will also seek to save $1-million by eliminating the Christopher Columbus Fellowship Foundation, an independent federal agency that was established to “encourage and support research, study, and labor designed to produce new discoveries in all fields of endeavor for the benefit of mankind.” Donations to the agency are tax deductible.
The Obama administration official said only 20 percent of the agency’s million-dollar annual appropriation is paid out in fellowships and awards. “That’s obviously inefficient and we are proposing that that appropriation be eliminated,” the official said.
Obama's $3.5-Trillion Budget Has Cuts Affecting Nonprofit Groups
President Obama’s proposed $3.5-trillion federal budget for 2010 asks Congress to eliminate or reduce spending on 121 current programs, which would save nearly $17-billion. The cuts could affect many nonprofit organizations.
“We have to admit that there is a lot of money that’s being spent inefficiently, ineffectively, and, in some cases, in ways that are actually pretty stunning,” Mr. Obama said as the budget was released.
“Some programs may have made sense in the past, but are no longer needed in the present,” the president said. “Other programs never made any sense: the end result of a special interest’s successful lobbying campaign. Still other programs perform functions that can be conducted more efficiently, or are already carried out more effectively, elsewhere in the government.”
Among the programs that would see elimination in the Obama budget:
- Student Mentoring Program ($47-million). The Obama budget says the program, run by the U.S. Department of Education for students in grades four through eight, was found to be ineffective in a recent study. The program provides money to schools, community organizations, and religious groups for mentor programs. The Obama administration said the program also is duplicative of many other federal programs.
- Public Broadcasting Grants ($5-million). The U. S. Department of Agriculture made these grants to help rural public broadcasting stations in their conversions to digital broadcasting and “that transition is almost complete,” said Peter Orszag, director of the Office of Management and Budget, in a blog posting this morning.
- Even Start ($66-million). The program, which provides early childhood education and adult literacy services, often through community organizations, is run by the U.S. Department of Education. “Obviously, the president and the administration feel very strongly that early childhood education, done in a high-quality way, is crucially important,” an administration official said in a briefing. “However, a variety of studies of Even Start have suggested that that program does not work well,” the official said. “So we are proposing that Even Start be eliminated even while we are investing in other programs that do work, including Early Head Start and Head Start.”
- Javits Gifted and Talented Education Program ($7-million). The program “supports research, demonstration, and other activities to help elementary and secondary schools meet the educational needs of gifted students,” according to the Obama budget proposal. “The administration supports gifted and talented education. However, there is no evidence showing that this small federal program, which has been in operation for more than a decade, is increasing the availability of gifted of talented programs, enhancing their quality, or advancing innovation in the field.”
- National Institute for Literacy ($6-million). The institute “has had minimal success in fulfilling its mission to coordinate literacy services across the federal government,” according to the budget proposal. “Efforts to provide national literacy leadership could be coordinated more efficiently by the Office of Vocational and Adult Education within the Department of Education,” the proposal said.
- The Christopher Columbus Fellowship Foundation ($1-million). The independent federal agency was established to “encourage and support research, study, and labor designed to produce new discoveries in all fields of endeavor for the benefit of mankind.” Donations to the agency are tax deductible. An Obama administration official said only 20 percent of the agency’s million-dollar annual appropriation is paid out in fellowships and awards. “That’s obviously inefficient and we are proposing that that appropriation be eliminated,” the official said.
Among programs that would see funding reduced in the Obama budget is the African Development Foundation, which would lose $2.5-million of its current $33-million budget. The African Development Foundation is a federal agency that operates as a nonprofit corporation.
The Obama budget proposal said the agency had received a significant increase in money in 2008 for a “Strategic Partnership Program to create incentives for co-funding and collaboration with African partner governments and private sector partners, and thus to leverage the foundation’s resources. The program failed to achieve its goals.”
Arts Groups Would Get Slight Increase in Obama's Budget Plan
Arts and humanities groups could see increased money from the federal government in 2010, if Congress approves all of President Obama’s budget request.
Under the proposal, the National Endowment for the Humanities would receive about $171-million, up $16-million, or more than 10 percent, from 2009. That figure includes $10-million allocated for the National Capital Arts program, which is being shifted from another agency.
The administration has proposed increasing the appropriation for the National Endowment of the Arts by about 3.9 percent to $161.3-million. Congress had given the endowment $155-million in 2009 — a figure that does not include a separate $50-million appropriation to the endowment through the federal economic-stimulus law.
In addition, Mr. Obama’s budget proposal includes $38.16-million for the arts-in-education program at the Department of Education — a figure that is level with what was appropriated by Congress for 2009.
The plan quickly drew support from Americans for the Arts, an advocacy group in Washington.
“[The proposal] provides another encouraging nod of confidence in the role the arts play in America’s future,” said Robert L. Lynch, the group’s president. “The administration’s request of $16- million would take the NEA to its highest funding level in 15 years and will help continue the upward trend of budgetary growth.”
But, despite the increases, there are concerns that administration is not going far enough to support arts organizations that are struggling mightily in the face of the recession.
“We would have loved to have seen more, more aggressive increases but given where we are in the economy and with what the federal government is taking on right now, we are just glad [the NEA has] an increase,” said Ford W. Bell, president of the American Association of Museums, in Washington.
Obama Budget Seeks 10% Increase for Peace Corps
President Obama’s 2010 budget, released this morning, seeks slightly more than $373.4-million for the Peace Corps, a 10-percent increase from the $340-million the organization now receives.
An organization that represents people who have served in the Peace Corps called the proposed increase inadequate.
“President Obama’s Peace Corps funding request is a step in the right direction, but it is only a step,” said Kevin Quigley, president of the National Peace Corps Association, in a statement on the organization’s blog.
Mr. Quigley said the Peace Corps needs much more from the government because more Americans are responding to President Obama’s call to service and more countries are asking for Peace Corps volunteers.
Mr. Quigley called the 10 percent increase the president is requesting “modest” and said it does not go far enough to help the agency fulfill President Obama’s goal of doubling the number of volunteers by the 50th anniversary of the Peace Corps, in 2011.
May 06, 2009
2010 Federal Budget: What Matters Most to Nonprofit Organizations
President Obama on Thursday is set to release the details of his proposed 2010 federal budget — and we’re looking for your help in collecting information about how his spending proposals will affect the nonprofit world.
If you or someone at your organization is tracking the budget proposals, please post your reactions, links to official statements, and analysis by clicking on the comment link below this item or send an e-mail message to our Web editor, Peter Panepento.
We will be providing regular updates about and reactions to the budget on Government & Politics Watch beginning Thursday.
We have also created a hashtag on Twitter devoted to the federal budget and nonprofit groups. The tag is #budgetnp.
White House Outlines Office of Social Innovation Goals
The White House has for the first time publicly outlined the mission of its new Office of Social Innovation and Civic Participation.
In a press release to announce President Obama’s plan to propose $50-million for a Social Innovation Fund in fiscal year 2010, it said the office will:
- Promote partnerships between the government and nonprofit groups, businesses, and philanthropists to make progress on the president’s policy agenda.
- Identify and support the rigorous evaluation and expansion of innovative, promising ideas that are transforming communities — like, for example, Harlem Children’s Zone, YouthVillages, Nurse-Family Partnership, and Citizen Schools.
- Support greater civic participation through new-media tools.
- Promote national service.
The office is headed by Sonal Shah, former head of global development at Google.org, who discussed its plans at a recent Global Philanthropy Forum.
May 04, 2009
Key Senator on Nonprofit Issues Expected to Leave Critical Oversight Role in 2011
Sen. Charles E. Grassley is expected to leave his powerful post on the Finance Committee in 2011 as part of a deal reached today with Sen. Jeff Sessions of Alabama, who is expected to take over the top Republican spot on the Judiciary Committee.
Mr. Grassley, an Iowa Republican, is the senior Republican of the Finance Committee. In that role, he has been the Senate’s most active voice on key nonprofit issues such as abuse, the tax treatment of nonprofit hospitals, endowments, and executive compensation.
The Wall Street Journal had reported that Mr. Grassley was likely to leave his Finance Committee post to become the top Republican on the Judiciary Committee to replace Sen. Arlen Specter, who is switching parties.
But reports today quote Senate aides as saying the Judiciary post will instead go to Mr. Sessions.
Mr. Sessions would then vacate the post in 2011. At that time, Mr. Grassley would relinquish the senior Finance Committee post to succeed Mr. Sessions.
Mr. Grassley’s office has not responded to a request for comment.
May 01, 2009
Seeking Ideas on Social Innovation Funds
Andrew Wolk, chief executive of Root Cause, is looking for ideas on how to structure the Social Innovation Funds program that was set up by the Serve America Act, the national-service bill that President Obama signed last week.
Mr. Wolk says on his blog that he will be leading a discussion with the Corporation for National and Community Service on the topic in Washington on Monday.
The funds will be combined with private money to help nonprofit groups expand or start innovative programs for tackling social problems.
Mr. Wolk, whose group provides money and consulting services to nonprofit organizations, says he has proposed drawing from two existing models:
- Small Business Investment Company funds, which are set up under the federal Small Business Administration to provide public and private money to small companies.
- Venture philanthropy and social venture capital, which use the principles of venture capital to support, respectively, nonprofit and for-profit social-entrepreneurial organizations.
If you have ideas about how the social innovation funds could be structured, share your thoughts by clicking on the Comment link below.
The Corporation for National and Community Service, which will manage the funds, is also holding a series of listening tours about the Serve America Act.