Reminder! Join NC Nonprofit Town Hall on Proposed DOL Overtime Rule Next Friday

The U.S. Department of Labor (DOL) recently released new proposed regulations on the salary threshold under the Fair Labor Standards Act (FLSA). The proposed regulations would increase the salary threshold for overtime pay by nearly 55% over the current level to $55,068 per year. The salary threshold in the final regulations may be even higher than the level in the proposed regulations – possibly as high as $60,209 per year. Were this proposal to take effect, most employees earning less than the new salary threshold would be entitled to overtime compensation when they work more than 40 hours in a workweek regardless of whether they are classified as executive, administrative, or professional (white-collar) workers. The Center anticipates that this change would affect thousands of North Carolina nonprofits, and we have prepared an analysis of the proposed regulations and their potential impact on nonprofit organizations..

Because the proposed regulations appear to be relevant for so many North Carolina nonprofits, the Center is hosting a free virtual town hall next Friday, October 20 from 10:00-11:30 a.m. to give nonprofits an opportunity to share their input on the DOL’s latest overtime proposal. During the town hall, you will have the opportunity to share how the higher salary threshold would affect your staff and your nonprofit’s budget and to let us know ways DOL could minimize any challenges of the higher salary threshold in its final regulations and any additional support the Center can provide for nonprofits as they navigate this change. The town hall will open with a brief overview of the proposed regulations, tips on submitting public comments, and an overview of compliance options for nonprofits. Register now! Note: If you would like the join the town hall but aren’t available on October 20, we still encourage you to visit the registration form and click on the box that indicates your interest; depending on interest level, the Center may offer a second town hall the week of October 23.

Nonprofits and others have until November 7 to submit public comments on the proposed rule. The Center is preparing comments to explain to DOL: (1) the impact of the proposed rule on North Carolina nonprofits; and (2) possible changes in the final rule that could help minimize operational challenges for nonprofit organizations. To help the Center best advocate for the needs of North Carolina nonprofits in our comments to DOL, it is critical that we give clear examples of the potential impact of a higher salary threshold on the operations of charitable nonprofits with exempt administrative, executive, or professional staff who are currently paid salaries below the proposed threshold.

Congresswoman Foxx Introduces Legislation to Streamline Federal Grants for Nonprofits

Yesterday, Congresswoman Virginia Foxx (R-NC) filed a bipartisan bill in the U.S. House of Representatives to address many of the challenges that nonprofits experience with federal grants. The Streamlining Federal Grants Act 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.

Earlier this year, Nonprofit Policy Update 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 and in Congresswoman Foxx’s decision to introduce it. The Center is working with Congresswoman Foxx and her staff to help the bill gain momentum in Congress.

Center Offers Analysis of Impact of New Law on Nonprofit Training Programs

A new state law (S.364) that takes effect on December 1 could affect some training programs offered by North Carolina nonprofits. The law will prohibit 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.

Tax Rate Cuts in State Budget Could Have Long-Term Implications for Nonprofits

Among other provisions, the recently enacted state budget includes significant reductions to the state’s individual income tax rate in future years. In 2024, the rate will drop from 4.6% to 4.5%, in 2025 the rate will drop to 4.25%, and in 2026, it will drop to 3.99%. If the state meets revenue targets, the rates could decrease to 2.49% sometime between 2029 and 2034. In addition, the 2021 state budget included language phasing out the corporate income tax in North Carolina after 2028.

This week, the NC Budget & Tax Center posted an analysis of the revenue impacts of these tax rate cuts. The analysis found that the tax rate cuts will translate to a $10 billion reduction in state revenue in FY 2028-29 and more than $13.5 billion in lost revenue by FY 2030-31. North Carolina’s constitution requires legislators to approve a balanced budget, so reductions in state revenue also translate into cuts in state spending. In the context of a roughly $30 billion state budget, this revenue loss could mean significant cuts to state spending in the future. While the tax rate cuts will have relatively little impact on state revenues in the immediate future, they could lead to steep cuts in state funding for nonprofits later this decade and into the 2030s. The state revenue reductions also could force state legislators to look to new taxes or fees on nonprofits to help pay for basic state services.

New Law Allows Nonprofits to Hold More Raffles

On Tuesday, both the NC House of Representatives and NC Senate voted to override Governor Roy Cooper’s veto of the General Assembly’s regulatory reform legislation for 2023  (H.B. 600). Governor Cooper had vetoed the bill because of concerns about its rollback of environmental protections and contracting preferences for historically underutilized businesses. One of the non-controversial provisions of the bill makes two improvements to the state law on nonprofit raffles:

1. It allows nonprofits to hold up to five raffles per year. Under previous law, nonprofits can hold up to four raffles per year.
2. It increases 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 new law requires that any real estate raffled by a nonprofit must be 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.

New Election Laws Could Affect Some Nonprofits

On Tuesday, both the NC House of Representatives and NC Senate voted to override Governor Cooper’s veto a bill (S.747) that makes a variety of changes to state election laws. Several of these changes could affect nonprofits and the people they serve, including:

1. A provision that prohibits nonprofits from providing funding to the State Board of Elections or to county election boards. In the past, legislators have expressed concern that some organizations – including nonpartisan 501(c)(3) nonprofits – could provide funding to local elections boards to bolster voter turnout in communities with strong partisan leanings. The new law provides that nonprofits can make in-kind donations of facilities to be used as voting sites and in-kind donations of food and beverages for poll workers and ink pens or personal protection equipment for polling places, but cannot make other in-kind donations (e.g., use of the nonprofit’s staff, resources, or facilities) for other purposes.
2. A provision that eliminates the three-day grace period after Election Day for receipt of absentee ballots. This change means that absentee ballots will need to be received by the county board of elections by 7:30 p.m. on Election Day.
3. A requirement that voters who use same-day registration during Early Voting must submit a retrievable ballot so that election officials can confirm their address and eligibility to vote. Many nonprofits encourage their staff, volunteers, and clients to vote early. Unlike some other legislative proposals to make it easier to challenge ballots submitted during Early Voting, this change does not appear to have any impact on the process of voting early in elections.

These election law changes will take effect on January 1, 2024. 

Also on Tuesday, legislators voted to override Governor Cooper’s veto of another election law bill (S.749), which would remove the Governor’s authority to appoint members of the NC State Board of Elections and the state’s 100 county elections boards (which had essentially ensured that a majority of members of every elections board would be affiliated with the Governor’s political party). Under the new law, legislative leaders from both major political parties will choose members of the NC State Board of Elections and county elections boards, with an equal number of Democrats and Republicans serving on each election board. Proponents of the law have argued that the change will promote bipartisan collaboration among members of election boards. Opponents have expressed concerns that it could lead to tie votes (and therefore inaction) on contentious issues before election boards, such as certification of elections and the decision of where Early Voting sites will be located. A deadlocked vote on Early Voting site locations could mean that voters in some counties would only be able to vote early at the county board of elections office, potentially creating long lines for Early Voting.

Center Offers Analysis of Directed Grants to Nonprofits in State Budget

This year’s state budget includes earmarked appropriations or “directed grants” of more than $1.5 billion to 644 nonprofits. While this investment in nonprofits is generally good news for the organizations receiving these earmarks, it also represents $1.5 billion in state funds that were unavailable to support other state investments that are important to the work of many nonprofits. In past years, many nonprofits were unaware that they had received appropriations in the state budget. To help you identify whether your nonprofit received a directed grant, the Center has prepared an updated list of nonprofits receiving new funding in the state budget. Let us know if you see mistakes or omissions in our list; we will continue to update it.

The process and timing for when these nonprofits will receive this funding depends on the details of how the General Assembly directed the grant in the budget. For example, many nonprofits will receive directed grants through the NC Office of State Budget and Management (OSBM), some will receive them through a variety of state agencies, and others will receive them as pass-through grants to counties or cities. The budget requires state agencies to “begin disbursement of funds to a non-State entity that meets all applicable requirements as soon as practicable, but no later than 100 days after this act becomes law.” Translation: Nonprofits receiving directed grants through OSMB or other state agencies should begin receiving funding from the state by mid-January. For nonprofits with directed grants of $100,000 or less, state agencies can provide funding through a single payment. For organizations with directed grants of more than $100,000, agencies can provide funding through quarterly or monthly payments. State agencies need to make their full payments to nonprofits receiving directed grants by July 3, 2024 (nine months after the effective date of the budget). Nonprofits that received funding as pass-through grants to counties or cities could have to wait a little longer to receive their payments, since this will depend on the local governments’ internal processes.

If your nonprofit received a directed grant in the budget directly from OSBM or another state agency, it will need to comply with the state laws on grant reporting and accountability. Among other things:

1. A nonprofit receiving a state grant or appropriation must provide certification to its granting agency that its state funds were used for the purposes for which they were awarded (which is general operating support for most earmarks) and must provide an accounting of all state funds it receives; and
2. A nonprofit receiving a state grant or appropriation must provide its granting agency with a copy of its conflict of interest policy and must certify to the granting agency that it does not have overdue federal, state, or local tax debts.

DHHS Publishes Materials to Help Nonprofits Provide Outreach on Medicaid Expansion

With Medicaid expansion beginning on December 1 in North Carolina, the NC Department of Health and Human Services (DHHS) has launched a new website to help with community outreach. The website includes 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.

Have Questions about Nonprofits and the 2023 Election? We Have Answers!



Have you been wondering what types of election-related activities your nonprofit can and cannot do between now and Election Day? Or perhaps you are wondering when Election Day is in your city or town this year (or if you even have an election this year). You are not alone. The Center has been fielding questions about what types of election-related activities are legal and advisable for charitable nonprofits, and we have posted answers to 31 of the most common questions we are hearing. We have included information on several new state election laws that could affect your nonprofit and the people you serve, including the new requirement to show a photo ID when voting. Let us know of other questions you have about your nonprofit’s engagement in the 2023 election.

Third Quarter Lobbying Reports Due by October 20

Nonprofits that are registered as lobbyist principals (and their staff or contractors who were registered as lobbyists) must file their third quarterly reports of 2023 with the Secretary of State Lobbying Compliance Division by October 20. All reports must be filed electronically. To help you understand the basics of state lobbying laws affecting nonprofits, check out the Center's recently updated 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.