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NC Secretary of State report finds increase in donations through professional fundraisers
More than 1,000 nonprofits ask Congress to pass Charitable Act
Center offers analysis of impact of new law on nonprofit training programs
Comments due December 4 on proposed improvements to OMB Uniform Guidance
More than 800 nonprofits ask Congress to pass Streamlining Federal Grants Act
State legislators take no action during two-day mini-session
Center offers 2023 Legal Compliance Checklist for North Carolina Nonprofits
DHHS publishes materials to help nonprofits provide outreach on Medicaid expansion
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NC Secretary of State Report Finds Increase in Donations Through Professional Fundraisers
Last week, the NC Secretary of State released its annual report on charitable solicitation in North Carolina. The report found that donations to North Carolina nonprofits made through licensed fundraising professionals increased from $47 million in FY2020-21 to more than $58 million in FY2022-23. The report also found that about 75.58% of the amount of contributions made through licensed fundraisers went to support the work of nonprofits (with the remaining 24.42% presumably being retained by these contract fundraisers).
While the apparent increase in contributions to nonprofits highlighted in the report is dramatic, it is important to remember that contributions through licensed professional fundraisers reflects only a small percentage of the overall revenue for nonprofits – and only a small percentage of overall donations to nonprofits. Overall, North Carolina nonprofits have total revenue of more than $56 billion per year, so donations raised through licensed professional fundraisers only account for about 0.1% of total funding for nonprofit organizations. The vast majority of nonprofits’ revenue comes from other sources including fees for service, government grants and contracts, foundation grants, bequests, and individual and corporate donations that are made directly to nonprofit organizations rather than through professional fundraisers. In fact, overall contributions to nonprofits are on the decline, as evidenced by the annual Giving USA report, which found that individual giving declined by 13.4% last year.
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More Than 1,000 Nonprofits Ask Congress to Pass Charitable Act
The Charitable Act (S. 566/H.R. 3435) is a federal policy solution to help offset the recent decline in charitable giving. The Charitable Act would create a universal charitable deduction that would encourage people to give more generously to nonprofits. Specifically, the Charitable Act would create an above-the-line tax deduction for non-itemizers who make charitable contributions. The deduction would be capped at one-third of the standard deduction (about $4,600 for individuals and $9,200 for couples).
This week, a coalition of nonprofits sent a letter to leaders in Congress asking them to pass the Charitable Act. More than 1,000 nonprofits from all 50 states signed on to the letter, including the Center and 107 other North Carolina nonprofits (more than any other state). The Center is sharing this letter with our North Carolina congressional delegation. Thank you if your nonprofit signed on to the letter!
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Center Offers Analysis of Impact of New Law on Nonprofit Training Programs
A new state law (S.364) that takes effect today could affect some training programs offered by North Carolina nonprofits. The law prohibits any “state employee training program” from promoting 13 specific concepts, most of which are related to race and gender. Over the past few months, nonprofits have asked the Center a variety of questions to assess whether the law will apply to training programs their organization offers and, if so, what changes they may need to make to be compliant. To help your nonprofit better understand the law and its possible implications for your training programs, the Center has posted a synopsis of some of the questions we received – along with our best attempts at answers.
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Comments Due December 4 on Proposed Improvements to OMB Uniform Guidance
In October, the White House Office of Management and Budget (OMB) released a proposal to make significant improvements to its Uniform Guidance, the rules that govern federal grants to nonprofits. The proposed changes include:
- Increasing the de minimis indirect cost rate on federal grants from 10% to 15% of modified total direct costs. OMB explains: “This change would allow for a more reasonable and realistic recovery of indirect costs, particularly for new or inexperienced organizations that may not have the capacity to undergo a formal rate negotiation, but still deserve to be fully compensated for their overhead costs.”
- Clarifying that federal agencies cannot force nonprofits receiving grants to use an indirect cost rate lower than the proposed 15% de minimis rate unless a lower rate is required by statute.
- Clarifying that nonprofits with federally negotiated rates must receive these indirect cost rates even when federal funds flow through state and/or local governments.
- Raising the federal single audit threshold from $750,000 to $1 million.
- Requiring federal agencies to eliminate program reports that are not necessary for the effective monitoring of grants.
- Revising the Notice of Funding Opportunities to make postings simpler and easier for nonprofits to navigate.
- Encouraging federal agencies to take a variety of steps to make their grantmaking process more equitable and inclusive.
The National Council of Nonprofits (NCN) has prepared a helpful analysis of the proposed improvements to the OMB Uniform Guidance. The proposed changes to the OMB Uniform Guidance could help address many of the longstanding challenges nonprofits have experienced with their federal grants.
The proposed changes are open for public comment through Monday, December 4. This week, NCN submitted public comments supporting the proposed changes and offering four suggestions for further improvements to the OMB Uniform Guidance that would be helpful for nonprofits providing services through federal grants. The Center plans to submit comments in support of the proposal, and we encourage other nonprofits with federal grants to consider submitting comments also.
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More than 800 Nonprofits Ask Congress to Pass Streamlining Federal Grants Act
This week, a coalition of nonprofits sent a letter to leaders in Congress asking them to pass legislation to improve the federal grantmaking system for nonprofits. The Streamlining Federal Grants Act (S.2286/H.R. 5934) is a bipartisan bill in both the U.S. Senate and U.S. House of Representatives that would help address many of the challenges that nonprofits experience with federal grants. Among other things, the bill 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.
More than 800 nonprofits – including 45 organizations from North Carolina – signed on to the letter to Congress. Thank you if your nonprofit signed on!
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State Legislators Take No Action During Two-Day Mini-Session
The NC Senate and NC House of Representatives each held a two-day session this Wednesday and Thursday, but neither chamber took up any votes or held committee meetings. In late October, the NC Senate and NC House of Representatives passed an adjournment resolution (SJR 760) that sets up two-day mini-sessions each month between November 2023 and April 2024. Legislators can only take up a few types of bills – including voting on veto overrides, changes to redistricting plans, election law changes, and bills that are currently in House-Senate conference committees – during these mini-sessions. The next mini-session is scheduled for December 20-21. It is unclear whether legislators will vote on any bills during that mini-session.
The General Assembly will return for its 2024 short session on Wednesday, April 24, 2024. Legislators’ main priority for the short session will be to make adjustments to the state budget for FY2024-25. However, during the short session, legislators also can take action on a variety of other bills that passed either the House or Senate in 2023 or that affect state taxes or spending. Among the bills eligible for consideration during the short session are legislation to exempt nonprofits from paying sales tax on their purchases and to modernize the NC Nonprofit Corporation Act.
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Center Offers 2023 Legal Compliance Checklist for North Carolina Nonprofits
The Center’s weekly Nonprofit Policy Update (i.e., the email you are reading right now!) provides updates on new and proposed legislation and regulations that might affect your nonprofit’s operations and mission. The Center also recognizes that it is helpful for nonprofits to review the many federal and state laws (some new, some longstanding) that are necessary for your nonprofit to remain compliant. With this in mind, the Center has published its annual Legal Compliance Checklist for North Carolina Nonprofits, a comprehensive summary of laws affecting NC nonprofits’ tax exemption, governance, finances, advocacy, human resources, and fundraising – and how to comply.
The Legal Compliance Checklist is included as part of membership in the Center. If your nonprofit is a Center member, all of your staff and board members have access (download it here). The checklist is also available for purchase for nonprofits and others that are not Center members (purchase it here). Any 501(c)(3) nonprofit can also become a Center member to get free access to the Legal Compliance Checklist and a wide range of other resources and services.
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DHHS Publishes Materials to Help Nonprofits Provide Outreach on Medical Expansion
Medicaid expansion begins in North Carolina today. The NC Department of Health and Human Services (DHHS) expects that at least 300,000 North Carolinians will be automatically enrolled in Medicaid today and that about another 300,000 may be eligible for coverage under Medicaid expansion. DHHS launched a new website to help with community outreach on Medicaid expansion, including basic information on eligibility for Medicaid coverage, details of costs and coverage, and free materials to help nonprofits provide clear and accurate information about Medicaid and Medicaid expansion to their clients and communities. Please share this information widely, especially with clients who may now be eligible to apply!
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