New U.S. Senate Bill Would Streamline Federal Grants for Nonprofits

A bipartisan bill introduced in the U.S. Senate on Wednesday would address many of the challenges that nonprofits experience with federal grants. The Streamlining Federal Grants Act (S. 2286) would establish a Grants Council that would provide guidance to federal agencies on: streamlining and simplifying grant applications and reporting requirements; improving nonprofits’ user experiences with federal grants; and soliciting input from nonprofits and other partners on ways to improve the delivery of services to communities through federal grants.

Also this week, four U.S. Senators introduced the Grant Transparency Act (S. 2260), a bill to tweak the rules for notices of funding opportunities (NOFOs). According to the bill sponsor’s news release, the legislation would “would require government agencies to provide competitive grant applicants with more information about their selection criteria and evaluation process.” The Senate Homeland Security Committee could consider both bills as soon as next week.

This spring, several readers shared input on challenges your nonprofits have experienced with federal grants. Your feedback was instrumental in the development of the Streamlining Federal Grants Act.

Let Us Know: Does Your Nonprofit Have Questions About New Workplace Training Law?

A new state law (S.364) that takes effect on December 1 will prohibit any “state employee training program” from covering 13 specific topics related to race and gender equity. The prohibited topics are:

1. One race or sex is inherently superior to another race or sex.
2. An individual, solely by virtue of his or her race or sex, is inherently racist, sexist, or oppressive.
3. An individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex.
4. An individual's moral character is necessarily determined by his or her race or sex.
5. An individual, solely by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex.
6. Any individual, solely by virtue of his or her race or sex, should feel discomfort, guilt, anguish, or any other form of psychological distress.
7. A meritocracy is inherently racist or sexist.
8. The United States was created by members of a particular race or sex for the purpose of oppressing members of another race or sex.
9. The United States government should be violently overthrown.
10. Particular character traits, values, moral or ethical codes, privileges, or beliefs should be ascribed to a race or sex or to an individual because of the individual's race or sex.
11. The rule of law does not exist, but instead is a series of power relationships and struggles among racial or other groups.
12. All Americans are not created equal and are not endowed by their Creator with certain unalienable rights, including life, liberty, and the pursuit of happiness.
13. Governments should deny to any person within the government's jurisdiction the equal protection of the law.

The law does not prohibit nonprofits – including those with state grants and contracts – from offering workplace training for their own staff on any topics. However, depending on how the law is interpreted, it could limit some nonprofits’ ability to offer certain types of training on topics related to equity, diversity, and inclusion to state agencies or state employees. The Center is seeking guidance from state officials on exactly how this law would apply to training offered by nonprofits. Specifically, the Center is seeking guidance on:

1. What types of training offered by nonprofits would constitute a part of a “State employee training program” (e.g., whether a nonprofit training would be covered by the law if any state employee attended or whether a nonprofit would need to contract with a state agency to provide a training for all or a portion of the agency’s staff for the nonprofit training to be covered by the law); and 
2. Whether any topics that are commonly covered in nonprofit equity, diversity and inclusion training would fall within the scope of the 13 prohibited topics.

Let us know if your nonprofit offers training to state agencies or state employees and/or if your nonprofit offers training on topics that could potentially fall within one or more of the 13 topics. Your input may be helpful in getting guidance that could minimize the impact of the new law on nonprofit training programs. The Center will not share your nonprofit’s name or other identifying information unless you would like us to do so.

Legislators Remain at Impasse on State Budget

Two weeks into the state’s new fiscal year, legislators remain at an impasse on the state budget for FY2023-25 (H.B. 259). Legislative leaders have said they are still negotiating details of individual income tax rate cuts and how to spend billions of dollars in savings reserve funds. Lawmakers are expected to continue budget negotiations through next week. If they are still unable to reach an agreement, it is possible that negotiations will be paused for a few weeks, meaning they may not be able to finalize the budget until mid-August.

Unlike with the federal government, the failure to pass a state budget on time doesn’t cause parts of state government to shut down. Under state law, spending levels will continue in place at current levels until a new state budget becomes law. Even without the threat of a government shutdown, legislators and Governor Roy Cooper have two reasons to try to come to agreement on a new state budget soon:

1. Medicaid expansion in North Carolina cannot begin until a new state budget is in place; and
2. Without a new state budget, legislators cannot make adjustments to existing spending levels to account for inflation and new or changing needs in communities, and legislators cannot make changes to state tax laws.

To help your nonprofit better understand the differences between the two competing versions of the state budget, the Center has prepared an analysis of the nonprofit provisions and appropriations in the House and Senate budgets and a tutorial video on the state budget.

Legislators Negotiating Regulatory Reform Bill That Could Improve Nonprofit Raffle Laws

On Wednesday, the NC House of Representatives voted not to approve the Senate’s version of regulatory reform legislation (H.B. 600). The bill includes a variety of provisions intended to cut red tape by reducing a variety of state and local government regulations, including many environmental rules. 

The Senate regulatory reform bill also would make two improvements to the state law on nonprofit raffles:

1. It would allow nonprofits to hold up to five raffles per year. Under current law, nonprofits can hold up to four raffles per year.
2. It would increase the maximum value of real estate that nonprofits can raffle each year from $500,000 to $2.25 million. Nonprofits occasionally receive houses or other real estate as bequests or donations. For some nonprofits, the best way to make use of this donated property is to raffle it as a high-value fundraiser to support the organization’s programs and services. With increased property values in recent years, the current $500,000 threshold may be well below the value of property that nonprofits receive and may want to raffle. The bill requires that any real estate raffled by a nonprofit is free of liens or encumbrances – essentially ensuring that a nonprofit isn’t raffling property that will come with significant and unexpected costs for supporters of the organization. 

While the Center hasn’t taken a position on the entirety of the regulatory reform bill, we support the changes to raffle laws in the Senate version of the bill since they would create new (or at least improved) fundraising opportunities for some nonprofits. 

In May, the House passed a different version of the regulatory reform bill, which did not include the raffle law changes. Over the coming weeks, a House-Senate conference committee will work out the details of a final version of the regulatory reform bill. The Center is advocating for legislators to keep the Senate’s raffle law changes in the final version of the bill.

New U.S. Education Department Regulations Should Help More Nonprofit Workers Qualify for PSLF

More student loan borrowers, including workers at charitable nonprofits, will be able to apply for loan forgiveness under the Public Service Loan Forgiveness (PSLF) program as the result of U.S. Department of Education’s final regulations that went into effect on July 1. The rules will now allow more payments to count toward loan forgiveness (including some late and partial payments), ease administration for determining eligibility by permitting digital signatures from both employers and borrowers, allow for more types of loans to be consolidated or counted, and amend the definition of “full time” to mean 30 hours per week. See the PSLF Coalition’s FAQs for more information.

NC House Bill Would Increase Autonomy of Nonprofit Charter Schools

On Wednesday, a NC House of Representatives committee released details of a bill (H.B. 90) that would make a wide variety of changes to laws affecting K-12 schools in North Carolina. One part of the bill would expressly provide that actions of a charter school are considered actions of the private nonprofit corporation rather than of the state. A 2022 federal court ruling found that nonprofit charter schools operating in North Carolina are “state actors,” essentially because they provide similar functions to other public schools. By expressly providing in statute that charter schools are treated as private nonprofits rather than state entities, the provision in the new House legislation would give charter schools greater flexibility to operate differently from other public schools (e.g., by requiring students to wear uniforms). It is unclear when or if the House will take up this bill.

Second Quarter Lobbying Reports Due by July 24

Nonprofits that are registered as lobbyist principals (and their staff or contractors who were registered as lobbyists) must file their second quarterly reports of 2023 with the Secretary of State Lobbying Compliance Division by July 24. All reports must be filed electronically. To help you understand the basics of state lobbying laws affecting nonprofits, check out the Center's summary of NC lobbying laws for nonprofits.

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Nonprofit Policy Update is North Carolina Center for Nonprofits' weekly newsletter of state and federal policy issues that affect all 501(c)(3) nonprofits. Learn about the Center's public policy priorities and agenda, or contact David Heinen, Vice President for Public Policy and Advocacy, for more information.