During Barack Obama’s presidential campaign, his staff generated a series of specific proposals (contained in Helping All Americans Serve Their Country, aimed at building, supporting, mobilizing the nonprofit sector as an instrument of change and progress consistent with his overall policy platform.  This memorandum describes what nonprofit sector organizations have done to generate specific policy recommendations addressing, building on, or challenging the Obama/Biden platform (also contained in part in Blueprint for Change).Although some events are moving quickly with the new administration, it has been focused by necessity on generating an economic stimulus initiative.  The Obama Administration is less than a month old, its most significant nonprofit-specific appointments not yet formally announced,[1] and the policy recommendations floated by nonprofit leadership organizations still have currency.  At this point, the question is not what has the Obama Administration done, much less set in stone, regarding nonprofit policy in its first month in office, but what messages and priorities are being conveyed by the nonprofit sector for the Obama appointees’ consumption and action.

In the aftermath of the contested Bush/Gore election, there were several efforts to generate comprehensive nonprofit sector policy recommendations for whichever candidate ended up ensconced in the White House.  To their credit, these efforts frequently involved extensive input from nonprofits around the U.S.  For example, the Nonprofit Agenda generated by OMB Watch, the Advocacy Institute, the Union Institute, and the National Committee for Responsive Philanthropy tapped the online survey responses of 1,000 nonprofits, regardless of their connection to the four sponsoring Agenda organizations, which were then reviewed by a panel of 25 nonprofit sector leaders in several online and telephone conference calls.  Strikingly, that kind of mobilization of grassroots input into the Obama Administration does not appear evident in the policy proposals received so far by Nonprofit Quarterly.

Where there has been input, it has been within limited circles, organizational members, selected invitees, but not with the kind of democratic process that would appear to fit the incoming administration’s strong grassroots connections. The lack of extensive input from smaller, grassroots organizations into the proposals reviewed here creates a palpable feel that small organizations may be mentioned for purposes of garnering support and showing sensitivity, but not that they are primary beneficiaries of most of the policy recommendations.

The analysis here taps formal recommendations or briefs promulgated by several organizations including Independent Sector, the National Council of Nonprofits, and the Council on Foundations, plus shorter commentaries and op-eds issued by well known nonprofit sector leaders and observers such as Lester Salamon, John Bridgeland, E.J. Dionne, and Melissa Berman.[2] There are undoubtedly scores of other sets of policy recommendations emanating from nonprofit sector leadership organizations, so this list is by no means exhaustive.  Despite the diversity of perspectives and organizations, the recommendations can be grouped as follows:

• New Federal Agencies for Nonprofits
• Charitable Giving
• Community Service
• Nonprofit Funding
• Nonprofit Advocacy
• Economic Stimulus/Bailout
• Nonprofit Recognition
• Faith-Based Programming

New Federal Agencies for Nonprofits

As a marker of sorts, several proposals call for the creation of new agencies at the federal level to promote nonprofits:

• Several support the creation of something called the “Commission on Cross-Sector Solutions to America’s Problems,” which Independent Sector (IS) says will transform “relationships among the three sectors.” The National Council of Nonprofits (NCN) describes the Commission as helping fashion an understanding of “interdependent” sectors. Included in the Serve America Act, the Commission in Lester Salamon’s view would be an instrument toward fixing contractual and reimbursement relationships between the federal government and nonprofits. The Commission is one of a number of proposals that seems to use a lens of nonprofits as service delivery outlets for governmental programs, the challenge being one of rationalizing capital flows to these governmental partners. Nonprofit advocacy-other than advocacy for more government grant support and improved reimbursement regimes-is not a strong part of the picture that one gleans from the bulk of these proposals.
• IS calls for “a high-level office [in the Executive Branch] to coordinate education and oversight efforts in all federal agencies that are directed towards improving the capacity of nonprofit organizations to serve communities.” Variations on this theme exist in other proposals, including NCN’s recommendation to the Obama Administration that the Corporation for National and Community Service (CNCS), the agency that oversees AmeriCorps and other community service programs, take this function and move into the President’s cabinet or as a new cabinet-level “social entrepreneurship agency for nonprofits.” Michele Jolin’s proposal from the Center for American Progress is simply to create a White House Office of Social Entrepreneurship to give the nonprofit sector a voice at the federal level. All of this tracks Obama’s campaign platform which called for establishing a federal social entrepreneurship agency, though located within CNCS rather than in the White House.
• The proposal emanating from the Obama campaign is a Social Innovation or Social Investment Fund, lodged in the White House or at CNCS. The proposals for this fund vary in budget authority (ranging from $2 billion to over $3 billion) and program emphasis, but several organizations are pitching the Administration to provide flexible capital to nonprofits, for operations and for innovations.

Charitable Giving

The most commonly cited charitable giving incentive proposed in nearly all of the policy documents is support for the extension of the IRA rollover, a top line notion of both IS and the Council on Foundations (COF), and mentioned in the proposals of Lester Salamon and others as well.  On economic grounds, it is one of the least revenue-costly charitable giving incentives possible; in terms of benefit, data from the National Committee on Planned Giving and the National Center for Family Philanthropy indicate that the primary beneficiaries of IRA rollover donations are universities, colleges, hospitals, and other large institutions.[3] In other words, the IRA rollover contributions exacerbate the imbalance in charitable giving where most donations do not address the needs of the poor and disadvantaged.

The Council on Foundations is making its regular push for a reduction and flattening of the foundation excise tax[4] as another giving incentive, the underlying notion being that the two-tiered excise tax structure currently works against foundations going above the 5 percent mandatory minimum payout. [5] Salamon’s proposal would suspend the excise tax entirely so long as foundations went above the 5 percent payout level and dedicated the increase to direct-service organizations.  The entrepreneurship fund, sometimes called an innovation fund or a nonprofit stimulus fund, depending on the author, is often discussed in similar terms, including one proposal in which the Serve America coalition calls for “(i)nvestments [to] be matched by new commitments raised by community foundations or venture philanthropies, or by foundations which make charitable investments above the 5% minimum payout required by the U.S. tax code.”

Salamon, the Boston Foundation’s Paul Grogan, and others suggest that government actually incentivize increased foundation grantmaking with matching grant mechanisms (Salamon elsewhere suggests matching government funds with the value of nonprofit volunteer hours).  This is consistent with the Serve America legislation which also involves matching grant requirements.

NCN reiterates a call for enacting a charitable tax deduction for nonitemizers.  Salamon transforms the traditional Independent Sector call for a nonitemizers tax deduction to tax credits for moderate income individuals.  The IS platform for the Obama Administration doesn’t include the non-itemizer this time around.  But IS, NCN, and Salamon all call for eliminating the difference in mileage reimbursement tax deductions offered charitable volunteers for the use of their cars compared to deductions for business use.

Independent Sector supplements its charitable giving recommendations for the new administration with a benchmark against changing the tax code to give preferences to specific kinds of charities, a movement that has been spurred by comments from California Congressman Xavier Becerra about the small proportion of charitable giving and philanthropic grantmaking going to organizations that serve the poor.  Although IS has convened a panel to examine the pros and cons of providing incentives for certain kinds of giving, the statement for the Obama Administration suggests that IS has already made a policy determination on this issue without necessarily waiting for the panel’s public conclusions:  “Congress should not impose limits on private choice in giving by establishing new categories or subcategories of nonprofit organizations that receive preferred tax treatment.”  None of the other policy briefs take a stand one way or the other on incentivizing giving to the poor and disadvantaged.

Community Service

None of the commentators or policy proposals contain the slightest misgiving about notions of expanding community service to the levels proposed in the Serve America Act, basically boosting AmeriCorps and related programs from its current 75,000 to approximately 250,000 slots.  These below-living-wage positions become the human capital pipeline for the nonprofit sector.

A number of observers have suggested that the expansion of community service jobs is really an economic stimulus activity.  The Boston Foundation’s Paul Grogan refers to it as a “stimulus plan” for the nonprofit sector.[6] John Bridgeland and Bruce Reed,[7] the former domestic policy advisors for George Bush and Bill Clinton respectively, suggest that the community service expansion be added to or incorporated in the economic stimulus legislation.  Citing the high numbers of applications for Teach for America jobs, Ed Skloot and Joel Fleishman suggest dedicating $3-5 billion of the stimulus to pay for the 250,000 new community service slots.

The message is an odd one for the nonprofit sector.  Essentially, for jobs that will be created in “shovel-ready” infrastructure jobs, there will be union-level wages.  For jobs in the nonprofit sector, the wages will be low-wage AmeriCorps wages.  It may be that the people like Grogan, Skloot, and Fleishman are really advocating that community service volunteerism, that is, stipended volunteerism, will put people to work creating community improvements that will lift this nation out of its economic doldrums, essentially the Reed/Bridgeland argument-as opposed to the notion that employment in below-living-wage jobs[8] is in and of itself is an economic stimulus.  The writers compare the expanded community service program to the Civilian Conservation Corps or the Works Progress Administration, not noting however that the CCC and WPA program participants were unemployed and in desperate need of these jobs to support themselves and their families.  The participants in CNCS community service programs, whether younger people or older volunteers, do not possess a CCC socio-economic distribution.

A more fundamental concern that merits public discussion is the implicit though perhaps unintentional message that nonprofit jobs, particularly human service jobs in the nonprofit sector, can be filled by people receiving inadequate salaries, or in the case of these community service slots, basically below living wage incomes.  As Robert Kuttner of the American Prospect notes, “Since most human-service costs are paid socially, choices about how to compensate workers are social decisions. In the United States, with our meager social outlay, we define these human-service positions as low-wage, casual jobs.”[9] His proposal is entirely different from the community service volunteerism promoted by Bridgeland, Reed, and others:  “Congress could require that any job in the human services supported in whole or in part by federal funds would have to pay a professional wage and be part of a career track (with) [a] minimum starting annual salary might be $24,000 a year, or about $12 an hour…”  The community service notions in these nonprofit proposals and, in fact, in the Obama campaign’s “Plan for Universal Voluntary Citizen Service” do not undo what Kuttner decries as the “casualization” of jobs, which pay low wages, offer few if any wage protections, and suffer from high turnover, a dynamic he identifies as the norm in “low-paid human service work.”

Nonprofit Advocacy

Both IS and NCN address issues of nonprofit advocacy, lobbying, and free speech.  IS calls for the adoption of the Principles of International Charity developed by a working group of dozens of domestic and internationally-focused nonprofits, as an alternative or supplement to some of the anti-terrorism guidelines promulgated by the U.S. Treasury Department regarding philanthropic giving to non-U.S. entities.

On domestic nonprofit lobbying and advocacy, NCN and IS both call for the Administration to reaffirm the national commitment to permitting nonprofits the right to lobby, with IS making specific reference to increasing the ceiling on 501(c)(3) lobbying expenditures and eliminating the categorical distinction between “grassroots” and “direct” lobbying.  IS and Salamon both advocate that the Obama administration should specifically clarify and reaffirm that a nonprofit’s receipt of government funding (for service delivery, etc.) does not impair the recipient’s right to engage in public policy advocacy and lobbying.

IS is the only entity in this list apparently advocating that private foundations be accorded the same lobbying rights that are afforded to other 501(c)(3) nonprofit organizations, as foundations are currently prohibited from lobbying on their own other than for “self-defense” lobbying.[10] What this would do is basically allow grantmaking foundations to deploy their own public policy lobbyists on issues as opposed to giving grants to nonprofits to do that lobbying.  Foundations have construed the “self-defense” window quite broadly in the past, and many foundations have set up Washington policy shops that conduct the kinds of public education and outreach to members of the executive and legislative branches that constitute the kind of lobbying most nonprofits typically do, unable to devote money to hiring a K Street firm to promote their agendas.  The IS proposal takes foundations further down the road pursued by foundations such as the Pew Trust, running their own programs notwithstanding their classification as “operating” or “grant-making” foundations.

Nonprofit Funding from Government

Several organizations have called on the Obama Administration to increase funding for nonprofits, so that nonprofits don’t end up losing money-as they typically do-on their service delivery program activities.  Independent Sector and others call for increases in federal funding for nonprofits, including IS’s stimulus-related proposal of a large, undefined capital infusion into a Community Services Block Grant (CSBG)-type program that would be administered by national “intermediaries” bypassing typical CSBG flows through local or state government.  .

While the recommendations of Independent Sector are somewhat general and formulaic regarding government funding, the National Council of Nonprofits and others suggest some specific directions that might warrant attention:

• NCN calls for federal budget relief in the President’s economic recovery plan “focusing…first on maximizing operating budget relief for state and local governments to prevent additional state operating budget reductions”, in recognition of the significant proportion of smaller nonprofits that tap not federal government grant and contract revenue, but state and local resources;[11]

Nonprofit Capacity-Building

Long on the agenda of the National Council of Nonprofits is the creation of a National Capacity Building Initiative (NCBI), whose capacity-building funding would flow through state or national nonprofit infrastructure groups.  To get this bill enacted, NCN proposes attaching it as an amendment to the Serve America Act.

The NCN bases the NCBI notion on the technical assistance provided by the Small Business Administration (SBA), one of several SBA initiatives that small businesses themselves often view as less effective than advertised.[12] Independent Sector’s proposals take the SBA model several steps further, proposing to make nonprofits eligible for the range of incentives that SBA makes available to eligible for-profit entities:  “Congress should ensure that nonprofit organizations have the same level of access to capital investments and loans, as well as training and technical assistance, as is currently provided to for-profit enterprises through the Small Business Administration.”

For many, the concept of a federal agency on nonprofits, a social entrepreneurship agency of sorts, either new or within the Corporation for National and Community Service, gets a capacity-building cloak.  Salamon’s proposals are much more detailed about creating a “social enterprise capacity-building initiative”, including a “competitive training grant program to underwrite specialized education for social entrepreneurs and nonprofit managers” and student loan forgiveness for “young people” who choose jobs in the nonprofit sector.

Stimulus/Bailout

In addition to the concept of increasing the numbers of AmeriCorps (stipended) volunteers as an economic stimulus, there are increasing examples of proposals from segments of the nonprofit sector suggesting that bailout dollars go to nonprofits comparable to the capital infusions that have been made available to financial institutions: From the American Hospital Association, low-interest loans for nonprofit hospitals and grant funds for financially struggling hospitals; the American Association of Museums and others for museums and the arts;[13] NAFEO looking for an increase in federal funding for Historically Black Colleges and Universities (HBCUs), an additional $7 million capital investment in HBCUs, and inclusion of HBCUs as “infrastructure” for the purpose of the national stimulus package.

Salamon’s bailout-related proposal does not call for funding himself or his peers.  For example, without the slightest evidence of institutional or subsector self-interest, he recommends dedicating $5 billion from the Troubled Asset Relief Program (TARP) for a “three-year effort by nonprofit low-income housing and community development organizations and Community Development Finance Institutions to assist low-income homeowners facing possible foreclosure [to] negotiate affordable work-out arrangements on their loans.” At the Brookings Institution, Isabel Sawhill recommends investing 10 percent of TARP funds in social-serving nonprofits generally, though based on a proportional formula calculated on their most recently reported revenue levels, on the assumption that the funds will be used quickly and support responses to the troubles caused by the freefall economy.[14] Salamon also recommends funneling bailout funds through emergency food and shelter programs, likely to put funds to work quickly.[15]

For both Salamon and Sawhill, the source of capital may be the funding available in the “bailout” (past or potential), but the emphasis is on re-knitting the social safety net, not on channeling money to the sector for the purpose of simply pushing money to nonprofits.[16]

Although it has received support from large government contractors such as Jewish Family Services, Catholic Charities, Kids Hope United, and Women’s Housing and Economic Development Corporation,[17] Independent Sector appears to be pretty much alone among national infrastructure organizations in pitching a $15 billion “bridge loan” facility over 2-3 years to help nonprofits survive slow or delayed reimbursements for state and federal government contract work.  While few people in the nonprofit sector make any effort to criticize the policy proposals of their peers, no other organizations in this review have included the bridge loan facility in their policy briefs.[18] Part of that might be that the nonprofits that would be able to qualify for what amounts to a government-funded line of credit would be typically larger organizations.  Some observers suggest that the genesis of the IS proposal was due to a contract reimbursement cash-flow problem encountered by a large government contractor charity in Illinois.[19] Many of the typical organizations that would be at risk of government reimbursement cash flow problems which could be met by Lines of Credit (LOCs) would be larger contractors.[20]

Nonprofit Recognition

Unlike the policy proposals from 2000, the recommendations of 2008-2009 convey a sense of needing to demonstrate and recognize the value of nonprofits as a sector, despite the diversity of their missions and purposes.  Melissa Berman at Rockefeller Philanthropy Advisers (RPA) has suggested a nonprofit/philanthropic version of the Baldridge Awards[21] to recognize organizational performance excellence.  For the transition report issued by the Center for American Progress, Michele Jolin proposed that a White House Office of Social Entrepreneurship on behalf of the President issue weekly “Changemaker” awards “to highlight the work of inspiring, effective social entrepreneurs, faith-based organizations, and leaders in the non-profit or philanthropic world” and offer “an annual multimillion-dollar “prize” for developing the most creative, sustainable, and high-impact solution to a defined social challenge.”

Salamon’s proposals offer a complete package of rewards and recognition, including a “White House Conference on America’s Charitable Sector and its Contributions to National Progress” (also recommended by Jolin), “recognition of effective nonprofit managers at Presidential events, such as the annual State of the Union Address and state dinners, and a “Presidential address at the Annual Meeting of Independent Sector” in its role ostensibly as “the national body representing America’s charitable sector”, despite its limited membership rolls, currently 555 according to a hand-count of the members list on the Independent Sector website.[22]

Faith-Based

The Obama Administration was very quick to announce a new faith-based program, though without much specificity.  From Brookings, E.J. Dionne and Melissa Rogers, the latter appointed by President Obama as an advisor to his faith-based program, issued a very comprehensive set of recommendations on the design and implementation of a faith-based program, with a dozen key points including:  clarifying the prohibition against the use of federal assistance for “inherently religious activities”, protecting the religious identity and character of religious service providers, clarifying and monitoring the separation of religious activities and activities supported by government funding, simplifying the process for religious organizations’ forming separate 501(c)(3) entities, and promoting nonfinancial as well as financial partnerships with government.  Dionne and Rogers also support the nonitemizer tax deduction as part of their faith-based service agenda, consistent with the fact that a significant portion of nonitemizers’ contributions go to religious organizations.[23] In general, discussions of the nonprofit element of an Obama Administration faith-based initiative do not seem to be deeply reviewed in these policy proposals.

Missing Issues

The framework of issues identified in the Nonprofit Agenda reveals the absence of some issues in the proposals detailed above.  For example, none of the major policy proposals of nonprofit sector leaders addressed “Money and Politics” (aimed at “reduc(ing) the corrosive influence of money on Federal campaigns by embracing the principles of public financing and other models for reform”); this issue never made it to the groups’ priorities.

Similarly, nearly all of these proposals omitted serious attention to the area of “Strengthen Nonprofit Accountability” (to “strengthen tools to hold organizations accountable for their actions,” as defined in the 2000 Nonprofit Agenda ).  The Alliance for Children and Families called for public support for transparency and accountability, so long as the rules don’t unnecessarily “overburden” nonprofits.  To its credit, Independent Sector repeated its calls for increasing support for IRS oversight and enforcement of tax laws and funding for state governments to establish or increase their charity oversight functions, but offered neither target appropriation numbers or potential sources (such as the excise tax) from which the funding could be drawn.

After long debates regarding charitable and philanthropic accountability spurred by bipartisan efforts at the Senate Finance Committee, that issue seems to have disappeared as an item to raise with the Obama Administration.  The Council on Foundations and others called on the Obama Administration to reduce and flatten the foundation excise tax, but without any call to direct or dedicate these funds to issues of nonprofit oversight and accountability.  Similarly, the post-2004 calls for infusing new capital into the Tax Exempt Governmental Enterprises division of the IRS do not jump out from the 2008-2009 proposals for the Obama administration.

These gaps should not be read as suggesting that the Nonprofit Agenda in 2000 was a superior framework than those being promulgated now.  However, as a comparison for the current spate of proposals,[24] it reveals issues that by their absence suggest that they are no longer of much concern to the leadership of the nonprofit sector in 2009.

Concluding Observations

There is an overall sense of much of the dialogue with the Obama Administration occurring off-line, not in the public arena, as major nonprofit leaders appear to have inside tracks with the Obama transition.  In the two Bush terms, nonprofits were largely on the outside, viewed themselves as outsiders, and issued public agendas that the Bush Administration could be measured against.  In this instance, many of the key players shaping the Obama Administration’s nonprofit agenda have been included in transition team meetings and may have authored some of the core platform elements pushed by the campaign, for example, people from the America Forward coalition (founded by New Profit’s Vanessa Kirsch, among others).

As a result, the dialogue is occurring with major nonprofit leaders at the Obama table, but that doesn’t mean that the nonprofit sector writ large is involved and engaged.  That has to be remedied.

In addition, the proposals from some of the national players lean toward providing incentives and benefits for larger nonprofits.  The bias toward large nonprofits when the bulk of the nation’s nonprofit sector is comprised by smaller organizations (almost 94 percent of nonprofits have budgets of less than $1 million, according to NCN) is troubling, since there is no evidence that “moving toward scale” protects the roles of nonprofits in providing democratic voice to the constituencies they serve.

It may be unclear, but some of the proposals that these national nonprofit organizations had attempted to attach to the most important policy vehicle launched by the Obama Administration-the economic stimulus package-have not gotten traction.  The Senate version of the economic stimulus bill omitted every one of the nonprofit-oriented incentive proposals described here, despite much lobbying:  the nonitemizers, the IS bridge loan, the reduction of the foundation excise tax, and others (including the expansion of the IRA rollover to allow for contributions to donor-advised funds) all were left out of the Senate bill[25] and will likely not reemerge in the Senate-House conference version.

In the end, with the huge diversity of nonprofits operating under the banner of 501(c)(3) status, the test of these proposals will be a matter of which communities benefit, which needs are met, not which nonprofits negotiate their way onto the inside track of the Obama Administration’s nonprofit agenda.  As it always is, the fundamental benchmark will be, who benefits?  That question has to be answered by the Obama Administration-and by the U.S. nonprofit sector.

APPENDIX:  Partial List of Documents Reviewed

BLUEPRINT FOR CHANGE:  Obama and Biden’s Plan for America

Melissa Rogers and E.J. Dionne Jr., Serving People in Need, Safeguarding Religious Freedom: Recommendations for the New Administration on Partnerships with Faith-Based Organizations (The Brookings Institution, December 2008)

Michele Jolin, “A New Office of Social Entrepreneurship”, Change for America (Center for American Progress, November 2008)

Michele Jolin, Investing in Social Entrepreneurship and Fostering Social Innovation (Center for American Progress, December 2007)

National Council of Nonprofits, “Transition Report” (letter to President Obama, December 17, 2008)

Arts Policy in the New Administration: Recommendations to the Office of Presidential Transition (November 21, 2008)

American Society of Association Executives, Letter to President-Elect Barack Obama (November 5, 2008)

American Hospital Association, The Road to Economic Recovery: A Proposal to Support Health Care in America (January 6, 2009)

Museum Policy in the Obama Administration (“Memo to President-Elect Obama’s Transition Team, December 22, 2008)

Alliance for Children and Families and the United Neighborhood Centers of America, 2009 Public Policy Agenda

Union of Orthodox Jewish Congregations of America, Policy Priorities and Recommendations for the Obama-Biden Administration (November 13, 2008)

Independent Sector, Policy Proposals to Strengthen the Nonprofit Community’s Ability to Serve Our Society (January 6, 2009)

National Council of Nonprofits, National Council of Nonprofits Releases Recommendations to the Presidential Transition Team (December 22, 2008)

National Association for Equal Opportunity in Higher Education (NAFEO), HBCU and PBI Policy Recommendations for Obama Economic Stimulus Package and First 100 Days

Council on Foundations, “Council Offers Recommendations for Possible Stimulus Package”

Isabel V. Sawhill, “Don’t Forget the Human Infrastructure” (December 22, 2008)

Suzanne Perry, “Think Tanks Propose White House Office of Social Entrepreneurship”, The Chronicle of Philanthropy (November 13, 2008)

Robin Pogrebin, “Arts Leaders Urge Role for Culture in Economic Recovery”, New York Times (January 26, 2009)

“AMERICANS FOR ARTS SUBMITS POLICY RECOMMENDATIONS ON CRITICAL NEED FOR ARTS SUPPORT AS PART OF NATIONAL ECONOMIC RECOVERY PLAN” States News Service (January 13, 2009)

Jane Lampman, “Economic downturn frays America’s safety net”, Christian Science Monitor (January 26, 2009)

Paul S. Grogan and Eric Schwarz, “The double payoff of a stimulus plan for nonprofits”, Boston Globe (January 15, 2009)

“COLIN POWELL ANNOUNCES PRESIDENT-ELECT OBAMA PRESIDENT-ELECT OBAMA’S CALL TO NATIONAL SERVICE” States News Service (January 9, 2009)

Joel L. Fleishman and Edward Skloot, “Send Economic Stimulus Money to the Nation’s Charities”, Chronicle of Philanthropy (January 15, 2009)

Suzanne Perry, “A Plea for Nonprofit Priorities”, Chronicle of Philanthropy (January 15, 2009)

Bruce Reed and John Bridgeland, “Volunteer to Save the Economy”, The New York Times (January 23, 2009)

Independent Sector, Nonprofit Bridge Loan Proposal: Nonprofits on the Front Lines: Addressing Current Financial Constraints to Ensure Continuation of Services (January 14, 2009)

Lester Salamon, Supporting Social Entrepreneurs and the Social Sector

An Action Agenda for the Obama Administration (n.d.)

Lester Salamon, “President Obama, 1 Million Charities Are Ready”, St. Petersburg Times (January 25, 2009)

Lester M. Salamon, “How to Rally an Army of Nonprofit Volunteers”, Chronicle of Philanthropy (January 15, 2009)

Todd Cohen, “Will Recovery Effort Dilute Obama’s Giving Sector Strategy?”, Inside Philanthropy (January 19, 2009)

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[1] As of this writing, the Obama Administration has announced the appointments of Cecilia Munoz, formerly a senior vice president with the National Council of La Raza, as Director of Intergovernmental Affairs and Josh DuBois, a Pentecostal minister who was the Obama campaign’s Director of Religious Affairs, to head the Office for Faith-Based and Neighborhood Partnerships.  Other nonprofit-focused appointments, Google vice president Katie Jacobs Stanton or Google.org’s director of global development (and former Center for American Progress fellow) Sonal Shah as “director of citizen participation” and Ian Rowe, a VP at Music Television (MTV) as head of the office of social innovation, have not been officially announced as of this writing, and in any case, details of the scope and content of their nonprofit-oriented programs and policies have not been revealed (some reports suggest that Shah may be named head of a combination of both to-be-created offices).

[2] Policy recommendations:  Independent Sector, the National Council on Nonprofits, Service Nation, the Council on Foundations, the Center for American Progress, the National Association for Equal Opportunity in Higher Education (NAFEO, representing HBCUs and other predominantly minority-serving institutions), the Alliance for Children and Families and the United Neighborhood Centers of America, Americans for the Arts, the American Association of Museums, the American Hospital Association, and the American Society of Association Executives; Commentaries/op-eds/others:  Isabel Sawhill (Brookings Institution), Trinita Logue (IFF), Clara Miller (Nonprofit Finance Fund), Paul S. Grogan (The Boston Foundation), Lester Salamon (the Listening Post Project and John Hopkins Center for Civil Society Studies), Elizabeth Boris (the Urban Institute), Melissa Berman (Rockefeller Philanthropy Advisors), Joe Brooks (PolicyLink), Bruce Reed (Democratic Leadership Council), John Bridgeland, Melissa Rogers and EJ Dionne (Brookings Institution),Michele Jolin (Center for American Progress), Ed Skloot and Joel Fleishman (Duke University)

[3] Cf. http://www.ncpg.org/gov_relations/NCPG%20IRA%20survey–general%20results%20(1-18-07).pdf, where the latest IRA rollover data shows 33.5% going to public universities, 19.2% to private universities, 14.1% to “small colleges”, 6.3% to hospitals and health care organizations, 6.3% to religious organizations, and 6.0% to community foundations, and 2.2% to museums, symphonies, etc.

[4] Tax exempt private foundations pay a 2 percent tax on their net investment income.  That tax is reduced to 1 percent for any year when the foundation’s charitable distributions exceeds the average percentage of distributions over the previous 5 years.

[5] The Council’s plan calls for the reduction and flattening of the foundation excise tax to be “revenue neutral”, which is hard to fathom.

[6] Paul S. Grogan and Eric Schwarz, “The Double Payoff of a Stimulus Plan for Nonprofits”, Boston Globe (January 15, 2009)

[7] http://www.nytimes.com/2009/01/23/opinion/23reed.html?em

[8] Typically, an AmeriCorps position costs $10,000 of federal support plus $5,000 to $10,000 of locally generated matching funds.

[9] http://www.prospect.org/cs/articles;jsessionid=a8lin7ccaMZcVmr8X6?article=good_jobs_for_americans_who_help_americans

[10] Oddly, the advocacy-related agenda of the Council on Foundations does not appear to contain this foundation-related provision in the IS agenda.

[11] Leaving aside midyear FY2009 budget gaps, projected state budget shortfalls for FY2010, estimated to reach $145 billion and hitting nearly all the states, including shortfalls (compared to the size of the overall general fund) of 21.9% in Arizona, 25.6% in California, 14.5% in Connecticut, 22.6% in Florida, 21.7% in Louisiana, 14.7% in Minnesota, 24.3% in New York, 18.2% in Washington, and 20.3% in Wisconsin, just to name a few (cf. http://www.cbpp.org/9-8-08sfp.htm).

[12] Cf. Rick Cohen, “Nonprofit Should Be Dubious of the Small Business Moniker”, NonProfit Times (web exclusive) (July 2008) (http://www.nptimes.com/webex/08july/c3-7-1-08.html)

[13] As an example of a group that comprehensively reviewed potential funding sources, Americans for the Arts recommends funding for the arts including health care and unemployment benefits for part-time artists, $2 billion of the $20 billion of Community Development Block Grant (CDBG) funds devoted to arts projects, increasing the budget of the National Endowment of the Arts to $200 million (currently around $145 million), arts funding in Department of Agriculture and Economic Development Administration programs (and Department of Transportation funding programs), support for President Obama’s call for an Artists Corps, and inclusion of arts job training as an eligible activity in the Department of Labor’s Adult, Dislocated Worker and Youth Programs and the Wagner-Peyser Act.

[14] At 10 percent of the TARP funds, that would be $70 billion, roughly double the typical annual level of foundation grantmaking to nonprofits of all stripes.

[15] Aaron Dorfman of the National Committee for Responsive Philanthropy recommends that the funding go through community foundations.

[16] The components of the stimulus packages that both generate economic activity and reknit the tattered social safety net are described in a series of articles on the Nonprofit Quarterly website:  Rick Cohen, “Stimulus:  The Nonprofit Scorecard in the Senate and House Stimulus Bills”, http://www.nonprofitquarterly.org/cohenreport/2009/02/07/stimulus-the-nonprofit-scorecard-in-the-senate-and-house-stimulus-bills/(February 7, 2009); Rick Cohen, “What Can Nonprofits Look Forward to in the Economic Stimulus Bill”, http://www.nonprofitquarterly.org/cohenreport/2009/01/29/what-can-nonprofits-look-forward-to-in-the-economic-stimulus-bill/ (January 29, 2009); Rick Cohen, “When Will the Economic Stimulus Dollars Flow”, http://www.nonprofitquarterly.org/cohenreport/2009/01/31/when-will-the-economic-stimulus-dollars-flow/ (January 31, 2009)

[17] http://www.nytimes.com/2009/01/24/us/24liquidity.html?sq=aviv%20strom&st=cse&scp=2&pagewanted=all

[18] Recent commentary from the minority leader of the Senate Finance Committee, Charles Grassley of Iowa, suggests that there is little or no sentiment at the Committee level in support of the IS bridge loan proposal.  Grassley suggested that foundations could easily use their endowments to provide bridge loans for nonprofits awaiting government reimbursements, obviating the need for the creation of another federal program and bureaucracy, cf. http://philanthropy.com/news/government/index.php?id=6958.

[19] http://philanthropy.com/news/updates/6580/nonprofit-coalition-proposes-revolving-loan-fund-for-charities

[20] For example, an Aspen-funded study of nonprofits as local government contractors, involving 1,500 surveyed nonprofits, found 34 percent of them with government contract revenues over $1 million and only 2.7 percent with $25,000 or less (http://localgov.fsu.edu/research_projects/Aspen%20Snapshot_March_2007_Final.pdf).

[21] Now a governmental program, with awards in manufacturing, education, small business, service, and health care (cf. http://www.baldrige.nist.gov/Baldrige_Process_news.htm)

[22] Of those 555 members of IS, apparently 151 are identified as “foundations” and 39 as corporations or corporate giving programs, though the method behind categories of foundations, corporations, and charities is difficult to fathom.

[23] A 2001 study issued by the Congressional Research Service (CRS) concluded that nearly three-fourths of nonitemizers’ contributions went to religious organizations compared to a little over one-third of all charitable contributions, and less than 10 percent of giving to religious organizations is delivered as services or assistance to the poor, cf. Jane G. Gravelle, Economic Analysis of the Charitable Contribution Deduction for Non-Itemizers (Congressional Research Service, March 31, 2001), http://www.ombwatch.org/files/npadv/2002/Documents/31302crsstudy.pdf

[24] The seven categories of policy recommendations in the Nonprofit Agenda were as follows:      I. Money and Politics: Reduce the corrosive influence of money on Federal campaigns by embracing the principles of public financing and other possible models for reform.  II. Invest in People Served by Nonprofits: Invest in programs that address community needs and help the many people who have not benefited enough from sustained economic growth. In a time of great economic prosperity and large Federal surpluses, these social needs can and should be met.  III. Strengthen Nonprofit Participation in Public Policy Matters: Simplify rules governing nonprofit policy participation and improve the relationship between Federal agencies and nonprofits of all sizes and types. Improve access to government information.  IV. Giving, Nonprofit Careers, and Volunteering: Allow non-itemizers to deduct charitable contributions on Federal returns. Permit individuals to transfer funds in certain retirement accounts to charities without tax penalties. Maintain the estate tax. Create a new student loan forgiveness program for graduates who work in charities. Initiate efforts to increase volunteering in smaller charities.  V. Simplify the Federal Grantmaking Process: Speed up grant payments. Simplify application and reporting requirements. Provide technical assistance to help small nonprofits apply for Federal funds. Federal grantmaking should also conform fully to the constitutional principle of separation of church and state.  VI. Strengthen Capacity of Community-Based Organizations: Create a new national grant program to provide community-based organizations with operating support. Other initiatives to address digital divide concerns, such as through Community Technology Centers, should be undertaken as well. Encourage all donors to give more to community-based groups.  VII. Strengthen Nonprofit Accountability: Require greater disclosure from nonprofits and philanthropies, and improve access to nonprofit disclosure information. Improve IRS enforcement of current laws. Develop Internet-based directories of local services provided by nonprofits.

[25] Suzanne Perry and Grant Williams, “Senate-Passed Stimulus Bill Does Not Include Philanthropy Measures”, Chronicle of Philanthropy (February 10, 2009)