What the Johnson Amendment Repeal Discussion Means for Nonprofits

Discussions surrounding repealing the Johnson Amendment has been a hot topic in nonprofit news. This story has gained additional traction after Trump mentioned his plans during his Jan. 18th speech at Liberty University. The major concerns of this amendment repeal are that it would put deductions at risk and damage public trust.

The Johnson Amendment was passed in 1954 and it prevents charitable organizations from engaging in politics. It was introduced by then Senator Lyndon B. Johnson and it was suggested he did so because a charity opposed him in a primary race. The passage of this amendment “…[established] a rationale that, in return for not engaging in partisan politics, charities would continue to receive tax-deductible donations because they focus on contributing to the broader public good rather than narrower partisan interests.”

Supporters of the Johnson Amendment argue that 501(c)(3)s are able to concentrate and achieve their missions when they are not engaged in politics. Nonprofits serve the common good and with a repeal, it would erode people’s trust in who and how organizations help.

Opponents claim that the Johnson Amendment is in violation of the First Amendment. Nonprofits too have the freedom of speech and expression.

A repeal would blur the lines of what is a 501(c)(3) in terms of tax-deductions. Other nonprofits, like 501(c)(4), can engage in politics but cannot receive tax donations. It is possible that more entities and/or political groups would seek tax-deductible status to raise funds for political purposes and for potentially undisclosed donors. Also with the repeal, charities could “…lose the ability to receive tax-deductible donations…” and this would inhibit nonprofits from succeeding at their missions.

Repealing the Johnson Amendment is one option in change of federal law. There could be an executive order that would allow the administration to not enforce the law as long as political activities were ancillary. The IRS however could enforce the law if a nonprofit was engaging in more secular activity. From an opinion news piece, Congress seems hesitant to completely repeal the amendment. However, there is a bill at the House that would “amend the Internal Revenue Code to permit a tax-exempt organization to make certain statements related to a political campaign without losing its tax-exempt status.” This bill is the Free Speech Fairness Act.

What is your take on the Johnson Amendment repeal discussion? How would a repeal or executive order effect your charitable organization?

 

Sources:

Clerkin, Richard. “Repealing the Johnson Amendment could lead to reduced donations to churches and charities.” The News and Observer, http://www.newsobserver.com/opinion/op-ed/article134788344.html. Accessed 6 March 2017.

Hackney, Philip and Brian Mittendorf. “Trump may upend nonprofits with vow to ‘destroy’ Johnson Amendment.” Newsweek, http://www.newsweek.com/trump-upend-nonprofits-destroy-johnson-amendment-557716?_cldee=YW5uZS53YWxsZXN0YWRAYm9hcmRzb3VyY2Uub3Jn&recipientid=contact-75cd000f8e99e311956300155d009001-4e6ebff32b1e4064ade9eceac0048d63&esid=3dd07215-cef9-e611-959c-00155d009001. Accessed 6 March 2017.

“H.R.6195 – Free Speech Fairness Act.” Congress.gov, https://www.congress.gov/bill/114th-congress/house-bill/6195. Accessed 6 March 2017.

 

Governance Out Of The Box – April 20th, 2017

governance-out-of-the-box-april-12-2016Governance Out Of The Box

When: Thursday April 20, 2017 from 5:30pm – 8:00pm

Location: St. Francis Historic Women’s Club

What: Are you a board member with 3 years or less or seeking board service? Join us for a free dinner and networking event with other nonprofit professionals in a beautiful local space downtown. Conversations on governance topics will be facilitated throughout the catered meal. Stay for the after dinner presentation of an interactive mock board meeting with a focus on Robert’s Rules of Order starring Indiana actors and featuring an original and entertaining script. A success last year, this event is a mix of education, comedy, and socializing. We want you to learn, laugh, and engage!

How: Register HERE

Cost: FREE to you

*Get on Board is a project of the Paul Clarke Nonprofit Resource Center with grant support provided by Foellinger Foundation.

 

Nonprofits and the Women’s March on Washington

One day after Donald Trump’s inauguration millions gathered around the world to participate in the Women’s March. The original event took place in Washington, D.C. and crowd scientists estimated there were three times more attendees at the Women’s March than Trump’s inauguration. audrey-crowd

There were hundreds of sister marches and some believe that the Women’s March was the largest one day protest ever. The Women’s March mission stated “We stand together in solidarity with our partners and children for the protection of our rights, our safety, our health, and our families – recognizing that our vibrant and diverse communities are the strength of our country.

It is remarkable that so many folks mobilized to make a statement about women’s rights and the rights of marginalized groups in the United States. What made this demonstration possible? Along with a group of strong individuals who worked tirelessly since the election in November, support from nonprofit organizations around the country, both national and local, made this demonstration possible.

Planned Parenthood, a national nonprofit organization that works to provide women’s and reproductive healthcare, was both a partner and a sponsor of the March. The organization’s president, Cecile Richards, spoke to the crowd in Washington assuring them that “our doors stay open.” Like other nonprofits, Planned Parenthood works hard to remain in operation so they can continue to offer services to communities. Planned Parenthood along with other organizations came together to make the Women’s March successful.

One example of nonprofits working together locally to make an impact was the partnership between art house theatre Cinema Center and monica-crowdPlanned Parenthood a few weekends ago. Cinema Center screened the film 20th Century Women and part of the proceeds from its debut weekend were donated to Planned Parenthood. By communicating with the film distribution company A24, Cinema Center was able to help out another nonprofit in the area.

Do you work together with other local nonprofits to organize large events? How can the Women’s March inspire your organization’s programming in the future?

Click here to check out the full list of organization partnerships from the Women’s March.


top right photo credit: Audrey Leonard, bottom left photo credit: Monica Young

Nonprofits in the Trump Administration

nonprofitVarious articles from the Nonprofit Times and Chronicle of Philanthropy have recently been published about nonprofits under the Trump administration.  With the new 45th president taking office in two days, there will be changes. No matter your political bent, we should be informed and start preparing for how a new administration may affect the nonprofit sector. In this post, we lay out some of Trump’s high priorities and what it means for organizations.

Tax reform

Issue # 1 – There is a proposal to increase the standard deduction. This means that this will “…[reduce] the number of individuals able to file itemized tax returns.” The impact could “…decrease charitable giving because it reduces the number of itemizers, but there are also assumptions that – with an improved economy – giving would go up…” (Segedin).

Issue # 2 – Another proposal is to reduce the tax break for charitable contributions. Currently, it is at 39.6% rate and could potentially be reduced to 33% and limit the tax credit deductions to $200,000 per couple.  (Clolery and Hrywna).

IRS overhaul

There has been continued conversation about improving transparency. This has come from media covering and reporting the various issues with certain nonprofits misappropriating funds or tainted donations. About a year ago, there was proposed federal regulation that nonprofits would need to collect and report major donor contributions. However, it was withdrawn. Now, it could potentially be brought up again by General Kamala Harris (who recently won the California’s Senate seat and was the person spearheading appeals for the “Donee Report”).  Robert Waldman, attorney and Business Division Chair of Venable, LLP, advice is to make sure operations are in order (Clolery and Hrywna).

Cuts in Federal Funding

Overall, there is a concern that cuts in federal funding will impact social services. One particular funding source, Social Service Block Grant, might be cut or even eliminated. Currently, the grant is $1.5 billion. Reduction of this grant would affect programs that support children, mental health, and aging populations.


Clolery, Paul and Mark Hrywna. “Budget Cuts Might Hit Less Obvious Social Services.” The Nonprofit Times, 1 January 2017.

Segedin, Andy. “Nonprofits And President Trump’s First 100 Days.” The Nonprofit Times, 3 January 2017, http://www.thenonprofittimes.com/news-articles/nonprofits-president-trumps-first-100-days/. Accessed 16 January 2017.

New Year, New Program? New Nonprofit?

happy-new-yearHappy New Year! Are you interested in getting a new program off the ground? Is this the year you are considering starting a new nonprofit? Thinking about a strategic plan? We can help you!

The Paul Clarke Nonprofit Resource Center can brainstorm with you. We offer free one hour long consultations for new program or nonprofit ideas. In our conversation, PCNRC staff can be a sounding board, give you professional guidance, connect you to community resources, and answer your questions. In addition, we can assist your nonprofit by providing free strategic planning facilitation.

To learn more or schedule your consultation or facilitation, contact the PCNRC today at nrc@acpl.info or 260-421-1238!

Community Foundation Investments – from DWD “Mission-Minded” blog

CarrieMinnichwebCarrie Minnich, CPA recently posted “Community Foundation Investments″ for Mission Minded, Dulin, Ward & DeWald, Inc.’s nonprofit blog.

Carrie’s post highlights information specific to the recording of investments with the Community Foundation of Greater Fort Wayne.  Although most community foundations are similar, please contact your accountant for details specific to your [organization’s]investment.

Here’s a snippet and link to her post:

Many nonprofit organizations partner with their local community foundation by placing endowment funds with the foundation.  A community foundation is able to combine funds from various nonprofits into professionally managed portfolios that allow greater diversification of investments than an individual nonprofit may likely be able to achieve.

Read more at Mission Minded

Serve Indiana Webinars – September 26th and 29th

serve-indianaThe Serve Indiana Commission is providing upcoming training and technical assistance calls for organizations regarding the FY2017 Grant Competition for AmeriCorps* State funding.

AmeriCorps grants are awarded to eligible organizations for the purpose of supporting AmeriCorps members and addressing community needs. An AmeriCorps Member is an individual who is enrolled in an approved national service position and engages in community service. Members may receive a living allowance and other benefits while serving. Upon successful completion of their service members receive an education award from the National Service Trust. CNCS awards AmeriCorps State Formula funds to Governor-appointed state service commissions. Serve Indiana is responsible for administering these funds and overseeing all of the AmeriCorps grants awarded to the state.

To access application materials, please visit http://www.in.gov/serveindiana/2347.htm

Please see the information below on upcoming calls.

Introduction to AmeriCorps:
Monday, September 26, 2016 at 10:00 a.m. ET
For questions including appropriate AmeriCorps member service activities, staffing for the program, grantee responsibilities, or any other question related to program design or program management.

Conference Line: Dial – 712-432-0383   Access- 417071#

Webinar link: http://www.webinar.in.gov/serveindiana/

Application Process:
Thursday, September 29, 2016 at 10:00 a.m.  ET
For questions about the AmeriCorps grant application selection criteria, grant review process, or any other questions that need to be addressed in order to complete your application.

Conference Line: Dial – 712-432-0383  Access- 417071#

Webinar link: http://www.webinar.in.gov/serveindiana/