Federal Legislation & Issues

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Johnson Amendment

Nonpartisanship Is a Shield and Not a Barrier
The voting public in the United States trusts charities more than they trust political parties or any one politician. See Independent Sector's United for Charity Report. But one tenet underpinning the public’s confidence is in imminent jeopardy: nonpartisanship.

After hearing from nonprofits from around the Commonwealth, PANO is joining the National Council of Nonprofits in signing the community letter in Support of Nonpartisanship. We ask you to do the same.

What is this Call to Action All About?
The Johnson Amendment prohibits 501(c)(3)s from directly or indirectly participating in any political campaign on behalf of, or in opposition to, any candidate. Charities are prohibited from fundraising for and endorsing or opposing candidates for political office; ministers are restricted from endorsing or opposing candidates from the pulpit. If they do, they risk losing their tax-exempt status. The Johnson Amendment does allow these same nonprofits to advocate for mission-related issues.

President Trump vowed to get rid of and totally destroy the Johnson Amendment. His words were quickly followed by actions when Chairman of the House Ways & Means Committee, Kevin Brady, stated his intent to repeal the law as part of comprehensive tax reform. The House Majority Whip, Steve Scalise, is lead sponsor of one of three bills (S.264, H.R. 781 and H.R. 172) that would weaken this protection.

Why Nonpartisanship Matters
Repealing the Johnson Amendment could tarnish the integrity of the nonprofit and philanthropic community, damaging public trust in the impartiality and independence of our sector and our mandate to "do good." PANO joins National Council of Nonprofits, the Independent Sector, the Council on Foundations and hundreds of charitable nonprofits in support of nonpartisanship. We strongly oppose efforts to politicize charities by eliminating the Johnson Amendment for these reasons:

1. These proposals may subject charities and foundations to demands from candidates for endorsements and campaign contributions, potentially diverting donor money away from mission-related work to benefit politicians.

2. Nonpartisanship is a shield, not a barrier.
• Participation in partisan politics can create strong opponents on issues that nonprofits care about and impede their ability to get help from those they oppose to fulfill their mission.
• Partisanship could alienate those who depend on those organizations for services or those who contribute time, talent and treasure to nonprofits.

3. The Johnson Amendment has worked for more than 60 years without significantly hampering charities.
• Nonprofit already have many legal avenues to advocate for mission-related issues with policymakers.
• Nonprofit managers and their supporters have the right to freely express their views on candidates as individuals.

4. Charities could become conduits for tax deductible contributions to be used for political activity. No other political contributions are tax deductible.
• This could open the door for more unaccountable money in our political system, because charities do not have to make public the names of their donors.
• This may be particularly true for churches because they are not required to obtain formal recognition of their exempt status and are not required to file tax returns that report their expenditures

Additional Resources:
GuideStar Blog - Perspectives on the Johnson Amendment

Current Legislation & Issues

Charitable Giving Tax Deduction

2017 marks the 100th anniversary of the charitable tax deduction. Congress and the new administration are expected to reevaluate federal tax policies, most, notably the charitable deduction.

Your legislatures need to hear from you; let them know what the charitable deduction makes possible for your organization, your fundraising efforts and your donors. Send a letter, email and post on social media (use hashtags #100yearsofgiving and/or #ProtectGiving), see a copy of PANO’s letter below.

Recent Legislation & Issues

OMB Uniform Guidance

The federal Office of Management and Budget (OMB) released the interim final regulations on the Uniform Guidance (effective December 24, 2014). Included are important changes to: reimbursement for indirect costs, cost allocation, audit threshold and procurement.

Check out OMB Uniform Guidance Webinar Recording (1 hour)
A special thank-you to our presenters from the National Council of Nonprofits: David L. Thompson, Vice President of Public Policy and Beth Bowsky, Policy Specialist for Government-Nonprofit Contracting.

For more information, check out these resources:

Partnering for Impact: Government-Nonprofit Contracting Task Forces Produce Results for Taxpayers

Nonprofits and governments can reduce their own costs, improve services provided to constituents, and return greater value to taxpayers by creating government-nonprofit task forces to develop and implement recommendations to reform contracting practices and procedures. That is the key finding of a new report of the National Council of Nonprofits, which conducted an extensive analysis of joint task forces in nine states charged with rooting out waste while maintaining and even enhancing accountability.

The report provides a how-to guide for nonprofits, working with their State Associations, who want to streamline the government-nonprofit contracting process. It also provides practical guides for building collaborative relationships with government officials. Download the Report

National Study of State Contracts and Grants – 2013

This compilation of state profiles from the Urban Institute's 2013 National Survey of Nonprofit-Government Contracting and Grants, provides national and state-by-state snapshots of most types of nonprofit organizations that have contracts and grants with local, state, and federal governments. The individual state profiles are designed to document the extent of nonprofit-government contracting, processes and problems.

Full Report (PA stats start on page 91)

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