June 2009
June 30, 2009
White House to Spotlight Innovative Nonprofit Groups
Four nonprofit groups will discuss the way they are tackling social problems at a White House event today that will include remarks by President Obama.
The president will discuss “the importance of searching outside Washington to find and expand successful community solutions, and challenge foundations and philanthropists to join in this effort,” the White House said in a statement.
While details of the event have not been officially announced, several people who were invited said they believe it will highlight the goals of the new White House Office of Social Innovation and Civic Participation.
They said the event will include remarks by:
*Geoffrey Canada, president of the Harlem Children’s Zone, an antipoverty group that provides a comprehensive set of educational, medical, and social services in a 100-block area of Harlem. President Obama has proposed developing “promise neighborhoods” across the country modeled after the Harlem project. (Read an article from the Chronicle’s archive about Mr. Canada.)
*Robert Chambers, founder of Bonnie CLAC (Car Loans and Counseling), in New Hampshire, which provides low-interest car loans and financial-literacy training to low-income buyers. Mr. Chambers in 2006 won a $10,000 Purpose Prize, an award that honors people age 60 and above who devise innovative ways to help society. Bonnie CLAC has since expanded from one to eight locations in New Hampshire. (Read an article from the Chronicle archive about Mr. Chambers.)
*Vanessa Nunez, 19, a graduate of a training program offered by Genesys Works, in Houston and St. Paul, which prepares economically disadvantaged high school students for professional jobs.
*Two representatives of HopeLab, in Redwood City, Calif., which uses scientific research to develop technology to help children with chronic illnesses. (Read more about Pam Omidyar, who helped found HopeLab, in an article from the Chronicle’s archive.)
A variety of nonprofit and foundation leaders will attend the event. Civic Ventures, a nonprofit group in San Francisco that sponsors the Purpose Prize, announced that in addition to Mr. Chambers, five other Purpose Prize winners had been invited to attend.
June 29, 2009
First Lady Announces New Stimulus Spending on Community Health Centers
First Lady Michelle Obama today announced the release of $851-million in economic-stimulus money to help build, renovate, or equip more than 1,500 community health centers.
Speaking at the Upper Cardozo Health Center in Washington, Ms. Obama said the money would help “thousands of centers across the country expand and serve more Americans who simply can’t afford insurance coverage anymore.”
She said more than 650 centers will use the money to buy new equipment or health-information technology systems, and nearly 400 to adopt or expand the use of electronic health records.
The grants are part of $2-billion that the economic-stimulus law allocated to community health centers. See The Chronicle‘s coverage of previous stimulus spending to expand health-care services to the poor and an overview of how charities are seeking billions of dollars in stimulus aid.
Volunteering Conference Highlights Obama Push on Community Service
Last week’s National Conference on Volunteering and Service in San Francisco featured a lot of talk about the Obama administration’s efforts to promote community service.
The Chronicle‘s conference notebook brought news about the following:
- Michelle Obama’s opening pitch for Americans to make community service a part of their daily lives.
- Advice on how nonprofit groups can support the administration’s United We Serve campaign.
- An official announcement about All for Good, the Web project to aggregate volunteer opportunities that will feed the administration’s Serve.gov.
- A suggestion that the administration’s emphasis on community service as a way to help solve the country’s problems could change the way such work is evaluated.
- Concerns about the strain an influx of new volunteers could put on nonprofit groups.
- The prospect that budget constraints will curtail spending on the Serve America Act.
- The priorities of Jackie Norris, a new senior adviser at the Corporation for National and Community Service.
June 24, 2009
IRS Official Stresses Agency's Role in Governance Matters
The new top charity regulator at the Internal Revenue Service has made clear she will continue the tax agency’s efforts to promote good governance by charities.
Sarah Hall Ingram, in remarks to a conference in Washington, said that the IRS has a “clear, unambiguous role to play” in governance matters.
“Some have argued that we do not need to be involved, because we can count on the states to do their job and the sector to stay on the path of self-regulation,” said Ms. Ingram.
“While both state regulation and sector self-regulation are important, and I welcome and respect them, they do not get the IRS off the hook,” she said. “Congress gave us a job to do, and we cannot delegate to others our obligation to enforce the conditions of federal tax exemption.”
She added: “The federal tax law must be applied consistently across the country, and we will use both our education and outreach programs and a meaningful enforcement presence to accomplish this.”
Ms. Ingram spoke at a meeting on “Issues in Nonprofit Governance” that was co-sponsored by the IRS, Georgetown University Law Center’s Continuing Legal Education Program, and Independent Sector, a national coalition of charities and foundations.
June 15, 2009
Federal Agency Examines How Taxpayers Report Cash Contributions
The U.S. Government Accountability Office, the investigative arm of Congress, has released a report on the “misreporting” of cash contributions to charities by individuals.
In 2001, an estimated 46 percent of taxpayers who deducted cash contributions misreported their deductions, the agency said. “About 79 percent of misreporting taxpayers overstated a total of $16-billion in contributions while about 21 percent of misreporting taxpayers understated a total of $2.2-billion in contributions,” said the report.
In 2008, the IRS examined about 175,000 taxpayers “who potentially misreported cash contributions, out of about 1.4 million individual taxpayers it examined that fiscal year, and adjusted cash-contribution amounts by $593-million in net terms,” the agency said.
The Government Accountability Office said that “one approach that tends to lead to high levels of taxpayer compliance is information reporting, through which third parties, such as employers or banks, file returns with IRS and taxpayers that provide information on a variety of taxpayer transactions. IRS tries to match information from information returns filed by third parties against taxpayers’ income tax returns to see if taxpayers have filed returns and reported all their income. Currently, information reporting is not required for cash contributions to charities.”
But the Government Accountability Office said that requiring information reporting for charitable cash contributions may not be an effective way to improve taxpayers’ compliance with the law.
“Charities could incur substantial costs and burdens if they were required to file information returns with IRS and taxpayers on the cash contributions they receive,” the agency said.
June 12, 2009
Fired National-Service Inspector General Says He Acted Properly
Gerald Walpin, who was fired from his post as inspector general of the Corporation for National and Community Service, said he acted properly and questions the timing of the decision.
“I and my office acted throughout with the highest integrity in reports and dealing with the corporation and its management in performing the IG’s responsibility to be an independent overseer of the corporation’s activities,” he said in an interview. He said he told the White House it might not appear coincidental that the president’s decision to remove him followed two reports he issued that criticized the national-service agency.
But the White House said the decision was made solely because of Mr. Walpin’s conduct, citing a decision by an acting U.S. attorney in Sacramento to file a complaint against him.
“We are aware of the circumstances leading to that referral and of Mr. Walpin’s conduct throughout his tenure and can assure you that the President’s decision was carefully considered,” Gregory B. Craig, White House counsel, said in a letter to Sen. Charles E. Grassley of Iowa, senior Republican on the Senate Finance Committee.
President Obama told Congress on Thursday he planned to remove Mr. Walpin from his post because he no longer had the “fullest confidence” in him. Mr. Craig wrote to Mr. Grassley after the senator raised questions about whether the administration had properly notified Congress of the reasons for the decision.
“Inspectors general need to know they have independence and won’t be removed for arbitrary reasons,” Sen. Grassley said in a statement.
The U.S. attorney complained about Mr. Walpin’s conduct in a case involving St. Hope Academy, a nonprofit group started by Kevin Johnson, a former basketball star who is now mayor of Sacramento. The Corporation for National and Community Service last September barred the group from receiving any federal grants or contracts for up to one year after finding that it had misused members of AmeriCorps, the national-service program.
Mr. Walpin referred the case to the U.S. attorney’s office so it could consider prosecuting Mr. Johnson and a colleague for misusing federal funds. The office reached a settlement with the academy that required the group repay some of the money it had received — an agreement that Mr. Walpin criticized in a report that he issued in May.
The acting U.S. attorney, Lawrence Brown, filed a complaint against Mr. Walpin with the integrity committee of the Council of Inspectors General on Integrity and Efficiency, a federal body. The complaint was not immediately available, but Mr. Walpin’s defense refers to charges that he overstepped his authority as an auditor and improperly communicated to the press. Mr. Walpin denies both charges.
Mr. Walpin also filed a report month criticizing spending on an AmeriCorps program at City University of New York.
He said that the White House asked him to resign on Wednesday, giving him one hour to decide. He said he declined to make such a hasty move, telling the White House in an e-mail that “it would do a disservice to the independent scheme that Congress has mandated.”
The president is required to give Congress 30 days’ notice before removing an inspector general, so Sen. Grassley questioned the propriety of the ultimatum. The White House told him it had contacted Mr. Walpin as a way to start the 30-day notification clock ticking.
Mr. Walpin, who lives in New York, was appointed to his post in 2007 by President George W. Bush. A White House spokesman noted that the decision to remove him was supported both by Democrat Alan Solomont, the corporation’s board chair, and Republican Stephen Goldsmith, the vice chair.
June 11, 2009
Obama to Remove National-Service Inspector General
President Obama plans to remove Gerald Walpin, the inspector general of the Corporation for National and Community Service, from his post, the corporation announced today in a statement.
Mr. Walpin recently issued a report critical of an AmeriCorps program that provides money to the Teaching Fellows project at City University of New York that was contested by the corporation, according to an article in the publication Youth Today.
But an official at the corporation, which operates AmeriCorps and other national-service programs, said the decision to fire him was not connected to that report and was made before the document was issued on June 4.
“The president has lost confidence in the inspector general and wants to appoint someone in whom he has full confidence,” the official said.
The corporation’s statement said Alan Solomont, the agency’s board chair; Stephen Goldsmith, the vice chair; and Eric Tanenblatt, chair of the board’s management, audit, and governance committee, all strongly support the president’s decision.
The corporation official said Mr. Walpin, who was nominated by President George W. Bush and has served in the position since January 2007, will be required to leave his post in 30 days.
Kenneth Bach, the agency’s assistant inspector general for support, was named acting inspector general.
Mr. Walpin, who lives in New York, could not be immediately reached for comment.
June 10, 2009
IRS Asked to Improve Tax Rules for International Grant Making
A committee of nonprofit experts that advises the Internal Revenue Service is recommending that the agency improve the tax rules governing international grant making.
“While the longstanding framework for cross-border philanthropy functions well, it can and should be updated to simplify compliance and clarify areas of uncertainty,” said a report by the Advisory Committee on Tax Exempt and Government Entities.
“Much of the guidance affecting cross-border philanthropy was provided long ago and fails to reflect developments of the past 15 or more years,” the report said. “As such, it does not address certain practices and structures that are common today.”
The report said that the committee believed that “a modest expenditure of IRS and Treasury administrative resources spent making updates to certain guidance will yield an exceptionally high return by reducing compliance burdens, improving charitable organizations’ ability to comply with our tax rules, and enhancing their ability to fulfill charitable missions beyond our borders.”
One committee recommendation is to simplify and enhance the application of the “expenditure responsibility” rules that private foundations follow when making grants to certain overseas organizations.
June 08, 2009
Audit Criticizes AmeriCorps Program at City University of New York
An inspector general has found that the federal government should stop an AmeriCorps program that provides money for the Teaching Fellows project at City University of New York because it does not meet the essential AmeriCorps criterion of filling an “unmet” need, the publication Youth Today reported.
Gerald Walpin, inspector general for the Corporation for National and Community Service, said in an audit that the federal government should recover the money it has spent on the program, which the university estimates could be as much as $75-million. He said the AmeriCorps money duplicated other programs and played no role in attracting people to the fellows project.
The corporation disputed the findings and said it would not halt the program.
June 04, 2009
Aid Groups Press Congress on Funds for Pakistan
Overwhelmed by the growing humanitarian emergency in Pakistan, aid organizations are calling on Congress to allocate more money for the nearly 3 million people who’ve fled a military offensive against the Taliban.
In a letter to members of the Senate Appropriations Committee, Samuel A. Worthington, president of the umbrella organization InterAction, said aid workers are stretched thin trying to assist people who are arriving at a rate of nearly 126,000 per day. Money and supplies have been slow to arrive in the region, he said.
Mr. Worthington urged the government to spend an additional $150-million through the U.S. Agency for International Development’s Office of Foreign Disaster Assistance and approve a Senate provision providing $345-million to the State Department’s Bureau of Population, Refugees, and Migration.
In addition, he said, the State Department — not the Department of Defense — ought to be given primary authority over $400-million appropriated for the Pakistan Counterinsurgency Capabilities Fund. He warned in the letter that any perception of an association between aid work and military assistance “endangers humanitarian workers and compromises their ability to help those most in need.”
Mr. Worthington also expressed concern that money would be diverted from other crises to help victims in Pakistan. If the government allocated money for Pakistan without replenishing the State Department’s Office of Foreign Disaster Assistance, he said, “other OFDA emergency assistance programs — such as those in Somalia — could suffer.”
June 03, 2009
Nonprofit Hospitals Object to Senate Proposal to Add New 'Charity Care' Requirements
The Association for Healthcare Philanthropy, which represents nearly 5,000 nonprofit hospitals, is objecting to a plan floated by two key Senators to establish a minimum level of free care that nonprofit hospitals would be required to provide to the poor.
The policy option was included in a discussion on ways to change the health-care system.
It would place new requirements on nonprofit hospitals and punish groups that fail to meet them. Organizations that flagrantly fail to provide the minimum level of care could lose their tax-exempt status. No specific minimum was specified in the document released by Sen. Max Baucus, Democrat of Montana, and Sen. Charles Grassley, Republican of Iowa.
In its objections to the proposal, the association said they were upset that hospitals could not count bad debts as part of their charity care. They said many nonprofit hospitals already provide a lot of uncompensated care because people don’t pay their bills.
The association said it preferred the broader “community standard” requirement that hospitals have been required to follow since 1969.
Under that standard, hospitals can provide a broader range of services to their cities and towns, such as promoting good health and offering preventive care.
Former Congressman Tapped to Head National Endowment for the Humanities
President Obama said today he plans to nominate Jim Leach, a former Republican congressman, as chairman of the National Endowment for the Humanities.
Mr. Leach, who left Congress in 2007 after representing Iowa for 30 years, founded and co-chaired the Congressional Humanities Caucus, which promotes the humanities in the House of Representatives.
He also served as chairman of the House Banking and Financial Services Committee from 1995 to 2001 and chairman of the House International Relations Committee’s subcommittee on Asian and Pacific Affairs from 2001 to 2006.
Mr. Leach is vice chairman of the board of the Century Foundation, a think tank in New York, and has served on the boards of the Carnegie Endowment for International Peace; the Kettering Foundation; ProPublica, a nonprofit investigative reporting group; and the Social Sciences Research Council. Since leaving Congress, he has taught at Princeton University and served as interim director of the Harvard Kennedy School’s Institute of Politics.
Minnesota Nonprofit Leaders Win New Law on Property-Tax Exemptions
Minnesota nonprofit leaders have won the final leg of their campaign to clarify state law governing charitable property-tax exemptions in the wake of what they considered a damaging Minnesota Supreme Court decision.
Gov. Tim Pawlenty last month signed a bill setting out criteria for determining whether a group is an “institution of public charity,” thus qualifying for the tax exemption. The law enacts language that was worked out between the Minnesota Council of Nonprofits and state and county officials.
The nonprofit council fought for the legislation after the high court in December 2007 denied a property-tax exemption to a child-care center because it always charged full price for its services, offering no discounts or free care for people with limited incomes.
The new law says organizations generally must meet six criteria that have been laid down by the state supreme court to earn the property-tax break, including offering “a material number of people goods or services free or at reduced prices.” But a group that does not meet that test can also qualify if it offers services that “alleviate burdens or responsibilities that would otherwise be borne by the government.”
The language also allows groups to qualify for the exemption if they are supported by government grants. The supreme court had ruled that they must be supported completely or partly by donations or gifts, excluding organizations that relied mostly on government payments.
In addition, the law offers some flexibility for organizations that do not meet some of the six criteria if they can offer a “reasonable justification.”
“This is a huge success and a great relief to nonprofit property owners across the state,” said Christine Durand, a spokeswoman for the Minnesota Council of Nonprofits.
See The Chronicle’s coverage of the Minnesota Council of Nonprofit’s campaign following the supreme court’s ruling in Under the Rainbow Childhood Center vs. County of Goodhue.
June 02, 2009
Liberty U. Group Urges IRS to Investigate Americans United
On behalf of Liberty University, Liberty Counsel — a nonprofit litigation, education, and policy organization — is asking the Internal Revenue Service to investigate Americans United for Separation of Church and State, a civil-liberties watchdog group.
Last week, Americans United for Separation of Church and State asked the IRS to investigate Liberty University after the university dropped its official recognition of a student Democratic Party Club. Liberty University, in Lynchburg, Va., was founded by the late Rev. Jerry Falwell. Mr. Falwell’s son, Jerry Falwell Jr., is the university’s chancellor.
“AU has engaged in a consistent pattern of filing complaints against conservative churches and nonprofit organizations,” Liberty Counsel said in a statement. “Its statements are designed to intimidate, silence, and harm those with whom it disagrees.”
Liberty Counsel added: “AU’s actions violate the same tax-exempt laws it pretends to uphold and the group has become merely a facade for a liberal agenda and the Democratic Party. This group has crossed the line one too many times. The IRS needs to put a stop to AU’s partisan intimidation tactics.”
Americans United for Separation of Church and State said in a press release that the Liberty Counsel complaint was “groundless and should go nowhere.”
The Rev. Barry W. Lynn, executive director of Americans United, said that “Falwell knows full well that Americans United is rigorously nonpartisan. He’s feeling the heat for a bad decision and trying to shift the focus to Americans United. This is a desperate diversionary tactic and it will fail. Instead of launching baseless attacks against Americans United, Falwell needs to get his own house in order.”
White House Modifies Stimulus Lobbying Restrictions
The White House has made several changes to its rules governing contacts between registered lobbyists and federal officials about economic-stimulus projects, which had been protested by some nonprofit groups.
The rules, designed to curtail the influence of special interests on spending decisions, barred registered lobbyists from having any oral communications with government officials about specific stimulus projects.
Norm Eisen, the White House ethics adviser, announced the following changes in a blog entry:
- The rules will now apply to everyone, not just registered lobbyists. Some groups had argued it was discriminatory to restrict lobbyists but not other people, like big campaign donors, who could influence decisions.
- The ban on oral communications will apply only during the period after competitive grant applications have been submitted and before the awards have been made. “Once such applications are on file, the competition should be strictly on the merits,” Mr. Eisen said, adding that further comments should be posted on the Internet for everyone to see.
- Federal officials must continue to file reports of all conversations with registered lobbyists, including those that take place in the pre-application phase, on the Internet.
Citizens for Responsibility and Ethics in Washington, one of the groups that protested the original rules, praised the changes.
“With this new restriction, the White House has leveled the playing field to ensure that corporate bigwigs and major donors who do not register as lobbyists do not benefit from an inside track unavailable to those less politically influential,” Melanie Sloan, executive director, said in a blog post.
June 01, 2009
IRS Releases Tips for Answering Form 990 Questions on Governance Matters
The Internal Revenue Service has released the third in a series of tips to help nonprofit organizations prepare their Form 990 informational tax return, the primary document that groups file each year.
The third batch of tips — which come in the form of frequently asked questions — focuses on information the IRS seeks about organizations’ governance policies and practices in Part VI of the Form 990, which was significantly redesigned for the 2008 tax year.
The IRS acknowledges in the tips that, in general, the policies and practices that the tax agency asks nonprofit organizations about in Part VI are not required of organizations by the federal tax code.
“The IRS will use the information reported in Part VI, along with other information reported on the form, to assess noncompliance and the risk of noncompliance with federal tax law for individual organizations and across the broader exempt sector,” the revenue service said.
The tenth question in Part VI asks, “Was a copy of the Form 990 provided to the organization’s governing body before it was filed? All organizations must describe in Schedule O the process, if any, the organization uses to review the Form 990.”
In its filing tips, the IRS says a nonprofit organization is not required by law to provide a copy of the form to its board or governing body, or have its board or governing body review the form, before it is filed with the IRS. “Nonetheless,” the tax agency said, “it is required to answer Question 10 regarding these matters.”