October 2, 2009
Nonprofit Executive to Lead the National Corporation of Community and National Service
The Chronicle of Philanthropy reported that President Obama appointed an Annie E. Casey Foundation Executive to head the Corporation for National and Community Service ("CNCS"). This organization is responsible for administering national volunteer serviceorganizations, like the Senior Corps, Americorps, Learn and Service America, and MLK Day of Service, and will play a lead role in implementing the Edward M. Kennedy Serve America Act of 2009 recently enacted March 2009. For more, please see the excerpt below,n
President Obama announced today he plans to nominate Patrick Corvington, a senior ssociate at the Annie E. Casey Foundation and an expert on nonprofit leadership, as chief executive of the Corporation for National and Community Service.
Mr. Corvington succeeds David Eisner, who stepped down from the post last November and handed the reins to Nicola Goren, now acting chief executive. Mr. Obama’s previous pick to head the federal agency — Maria Eitel, president of the Nike Foundation — withdrew in May, citing unnamed health problems.
The nomination comes at a critical time for the corporation, which manages
AmeriCorps and other national-service and volunteer programs. The Edward M. Kennedy Serve America Act that became law last spring calls for a big expansion of AmeriCorps, while the agency is also operating new volunteer efforts started by President Obama and the first lady, like the United We Serve campaign this summer.
Mr. Corvington will bring a somewhat different perspective to the job than Mr. Eisner, a former executive at AOLTime Warner, or Ms. Eitel, who both had experience in the corporate world. Before joining the Casey foundation, in Baltimore, in 2005, Mr. Corvington was executive director of Innovation Network, a group in Washington that offers planning and evaluation tools to nonprofit groups.
For the full story, please click here.
Study Commissioned by Nonprofit says that Access to News is "Wildly Unequal"
The Washington Post reports today, October 2, 2009, that the John S. and James L. Foundation commissioned a report from the Aspen Institute Communications and Society Program. Aspen Institute studied issues of access to news information across communities, urban and rural. The study concludes that there is a hunger for information that is unmet in today's society. The study acknowledges that communities of color, the poor and rural communities have limited access to the Internet. The report also discussed the importance of newspaper sources of information, but clarifies that it is not about how to save dying metropolitan newspapers. Instead it is about how to preserve the critical functions of media in a Democracy. For the full story, please click here. An excerpt is below:
But that is the task of a high-powered commission that says, in a report being released Friday, that the country's growing hunger for information is "being met unequally, community by community." The elaborately named Knight Commission on the Information Needs of Communities in a Democracy raises the specter of two Americas -- one wired, the other not so much.
Citing estimates that more than one-third of the country has no broadband connection to the Internet, "that's a hell of a lot of Americans who don't have access to the way we're communicating," says Alberto Ibarg?en, president of the Knight Foundation, which commissioned the year-long study with the Aspen Institute. "When an urban kid who wants a job at McDonald's or Wal-Mart has to apply online, if you don't have digital access, you can't apply."
The panel, co-chaired by former solicitor general Theodore Olson and Google Vice President Marissa Mayer, pays tribute to the importance of newspapers as "the primary source of fair, accurate and independent news" in many cities. But the report pointedly fails to offer a strategy for survival, saying "the challenge is not to preserve any particular medium or any individual business." Instead, it focuses on promoting "the traditional public service functions of journalism," in whatever form.
Walter Isaacson, president of the Aspen Institute and a former Time managing editor, says the report's focus is "not how do you save dying metropolitan newspapers. There's a wariness to assume that the old institutions should be preserved just for their own sake." He says the challenge is "coming up with a way that people who provide good and relevant information can pay their mortgage and put food on their table."
Russia -- Important European Court of Human Rights Decision on Religion Law
In a case of great importance, the European Court of Human Rights ruled unanimously in favor of two Scientology religious groups in Russia (European Court of Human Rights: Case # 7683601 and 32782/03), finding that they have the right to be registered as religious organizations under Russian law. This decision determines that members of the Church of Scientology of Surgut and the Church of Scientology of Nizhnekamsk have the right to religious freedom and freedom of association pursuant to Articles 9 and 11 of the European Human Rights Convention. In 1997, the Russian government passed laws preventing religious organizations from forming legally unless they could prove they had been in existence in their respective state(s) for 15 years. Such a law obviously discriminates against religions not established in a state for 15 years and has now been ruled as unlawful by the European Court of Human Rights. In reaching this decision, the Court “established that the applicants were unable to obtain recognition and effective enjoyment of their rights to freedom of religion and association in any organizational form. The first applicant could not obtain registration of the Scientology group as a non-religious legal entity because it was considered to be a religious community by the Russian authorities. The applications for registration as a religious organization submitted by the first and second applicants as founders of their respective groups ... were denied by reference to the insufficient period of the groups’ existence. Finally, the restricted status of a religious group for which they qualified ... conveyed no practical or effective benefits to them as such a group was deprived of legal personality, property rights and the legal capacity to protect the interests of its members and was also severely hampered in the fundamental aspects of its religious functions. Accordingly, the Court finds that there has been an interference with the applicants’ rights under Article 9 interpreted in the light of Article 11.”
AUSTRALIA—NEW LEGISLATION AND GUIDANCE FOR PRIVATE ANCILLaRY FUNDS
The Tax Laws Amendment (2009 Measures No 4) Bill 2009 has passed the Australian Senate and is now awaiting royal assent. The Assistant Treasurer has issued a media release regarding the amendments in the Bill - see No. 049 Important philanthropic tax law reforms pass through parliament. The Bill amends the tax law to improve the integrity of prescribed private funds (PPFs). The amendments among other things:
· rename PPFs as private ancillary funds (PAFs)
· move the full administration of those funds under the authority of the Commissioner of Taxation (the Commissioner)
· allow the Commissioner to endorse PAFs as deductible gift recipients (DGRs)
· give the Treasurer the power to make legislative guidelines about the establishment and maintenance of PAFs
· give the Commissioner the power to impose administrative penalties on trustees that fail to comply with the guidelines and to remove or suspend trustees of non-complying funds.
The Government of Australia has now published the Private Ancillary Fund Guidelines 2009, which are effective from 1 October 2009. They set minimum standards for the governance and conduct of a private ancillary fund and its trustee.
September 30, 2009
Tax Credit for Small Nonprofits Included in Health Care Reform
On September 23, 2009, the Chronicle of Philanthropy reported that Senator Max Baucus, Senate Finance Committee chair, amended his health-care bill to provide a tax credit for small charities that provide insurance to their employees. As proposed health-care reforms unfolded on Capitol Hill, nonprofits decried the absence of specific legislative components that address nonprofit needs to provide affordable health insurance. Nonprofits employ almost 10% of the workforce, private and public, in the United States. To ignore the special needs of nonprofits would be to ignore a large segment of Americans in need of insurance. Below is an excerpt of the story:
Sen. Max Baucus, chairman of the Senate Finance Committee, has agreed to amend his health-care bill to provide a tax credit to help small charities provide health insurance to their employees.
His original language, unveiled last week, would have allowed the credit only for small businesses that pay income taxes, excluding most nonprofit organizations. Several senators proposed amending the text to make nonprofit groups eligible for the credit.
. . .
The credit would be available to employers with no more than 25 full-time-equivalent employees with annual wages averaging no more than $40,000. The bill sets out a complicated formula for determining the amount of the credit, using factors like the percentage of the insurance premiums paid by the employer and the average cost of premiums for small businesses in the employer’s state.
For the full story, please click here.
Congressional Black Caucus Foundation Panel Urges Nonprofits to Recruit More Minority Board Members and Volunteers
The Congressional Black Caucus Foundation recently concluded its annual legislative conference weekend in Washington, D.C. The Foundation, a nonprofit, held its 39th Annual Legislative Conference from September 23 through September 26, 2009. The legislative conference features numerous workshops and sessions on a range of topics. Nonprofit organizations and the increasing demand for services in light of the recession was discussed. Nonprofits were urged to seek more diverse volunteers and to include these volunteers on boards and in other key decision-making positions. In earlier blogs on this website, we discussed calls out of California to legislate diversity on boards of nonprofits. While the CBC panel was not advocating legislation, the discussion reflects an increasing desire for greater inclusion of diverse voices in the realm of nonprofit governance and leadership. Below is an excerpt of an article reported in the Chronicle of Philanthropy on September 24, 2009 about this event:
With 9.7 percent of American workers unemployed—a figure that will probably hit 10 percent “and linger there until sometime next year“—demand for the services charities provide will continue to increase, Rep. Emanuel Cleaver II, Democrat of Missouri, told an audience here today at the Congressional Black Caucus Foundation’s 39th Annual Legislative Conference.
And, said nonprofit leaders speaking at a session, those urgent needs mean it’s more important than ever for organizations to include minorities, including African Americans, among their managers and board members, despite the recruiting challenges the recession brings.
“If you are serving people to lift them up, or you’re an advocate or voice for them, it’s really important that you practice what you preach,” said Marc H. Morial, president of the National Urban League, a civil-rights organization in New York.
The panelists—which also included Willie Iles, White House liaison for the Boy Scouts of America, which maintains headquarters in Irving, Tex.; Irv Katz, head of the National Human Services Assembly, a coalition of social-service groups; and Joyce M. Roché, chief executive of Girls Inc., a national youth group in New York—said that low compensation, neglect of the role of volunteers, and insufficient knowledge of the nonprofit field by job seekers who are minorities are among the factors that hinder greater inclusion.
Mr. Iles urged listeners to seek volunteers who are passionate about a charity’s cause, and give those people roles on boards and other decision-making bodies. He said nonprofit groups need to be more aggressive about seeking out supporters, holding up a copy of the conference’s program as an example.
For the full story, please click here.
The article also discusses the recently enacted Edward M. Kennedy Serve America Act and the high priority that President Obama (click here for more information) places on volunteer service. Nonprofits were encouraged not to miss the opportunity to increase volunteer pools and to seize the moment. Additionally, the article discusses how to best recruit and retain diverse top nonprofit leadership talent and the associated challenges.
September 29, 2009
Jordan--Law on Societies Amended
Amendments to Jordan’s Law on Societies (No. 51 of 2008) came into effect after Jordan’s King Abdullah II signed the Law Amending the Law on Societies (No. 22 of 2009) and the amendments were published in Official Gazette No. 4983. According to a report by ICNL, although the amendments streamline and liberalize the 2008 Law on Societies, they have nevertheless been criticized by domestic and international NGOs for not going far enough. Interestingly, the final bill approved by the parliament was more restrictive than the draft legislation put forward by the Jordanian government. The lower house of parliament or Chamber of Deputies made several changes to the government’s draft before approving the amendments on July 12, 2009. Among other changes, the lower house rejected the government’s proposed liberalization of the foreign funding regime. Under Article 9(c) of the 2008 Law on Societies, Jordanian associations must apply for approval from the full Council of Ministers (cabinet) before accepting funding from abroad. The government had proposed that this process be simplified to require only the approval of the Minister of Social Development, but this proposal was rejected in a 76 to 42 vote in the Chamber of Deputies. As Speaker of the Parliament, Abdulhadi Al-Majali stated, “the parliament requires the approval of the Council of Ministers on foreign funding.”
Healthcare Reform Resurrects the Debate Over Charitable Deduction Limits
The Chronicle of Philanthropy reported Wednesday, September 23, 2009, that Senator Max Baucus, the Senate Finance Committee chairman, joined by other senators, included a 35 percent cap on charitable deductions made by wealthy taxpayers (individuals reporting $200,000 or more and families reporting $250,000 or more) as part of his health-care bill. While less than President Obama's cap of 28 percent, the cap is of concern to nonprofit leaders. They are concerned that, when tax rates on wealthy taxpayers rise in 2011 from 33/35 percent to 36/39.6 percent, donations will decline in an already tough economic climate. For the full story, please see the story excerpt below and follow the link.
Some Senate Finance Committee members have resurrected the idea of limiting tax breaks for charitable donations as a way to raise money to overhaul the health-care system.
In amendments proposed to the health-care bill unveiled last week by Sen. Max Baucus, the committee chairman, a handful of senators have proposed limiting to 35 percent the tax break that wealthy people can get for their itemized deductions, including gifts to charity.
That is less drastic than the 28-percent limit proposed by President Obama. But a coalition of nonprofit leaders this week sent a letter to Mr. Baucus opposing the amendments, saying they would create a disincentive for charity’s biggest donors during a “tough charitable giving environment.”
“Charitable organizations are dealing with enormous financial challenges stemming from the economic downturn,” says the September 21 letter, which was signed by representatives of 14 groups including the American Association of Museums, the Association of Fundraising Professionals, the Council on Foundations, Operation Smile, and United Jewish Communities.
For the full story, please click here.
ACORN EO Shoe Drops: Accusations Fly About Tax Exemption Issues
The controversy surrounding the Association for Community Organizations for Reform Now (ACORN) involves numerous legal issues, but none of which were unique to nonprofit organizations - until now. First, the staff of Senator Chuck Grassley (R-Iowa), ranking member of the Senate Finance Committee, has released a critical report relating to tax exemption issues. The report asserts that while ACORN itself appears to be a taxable entity, there are numerous tax-exempt organizations - primarily section 501(c)(3) charities - affiliated with ACORN and that funds flow among these various entities in a manner that the report characterizes as "a big shell came [sic]." Additional information compiled by the staff is available on Senator Grassley's press release page, including letters from Senator Grassley to the IRS and to OPM requesting information about ACORN and its related entities.
Second, in response to a request from Representative Darrell Issa (R-Cal.), ranking member of the House Committee on Oversight and Government Reform, and Senator Susan Collins (R-Maine), ranking member of the Senate Committee on Homeland Security and Government Affairs, the Treasury Inspector General for Tax Administrations (TIGTA) wrotestating it "is initiating a review of the IRS' oversight of tax-exempt Section 501(c)(3) organizations and Section 527 organizations and will review internal IRS referral processes with regard to nonprofit fraud investigations." This new initiative is occurring even though less than three months ago TIGTA issued a report focusing on the Tax Exempt and Government Entities Division's Fraud Program.
ACORN's response to the number allegations against it can be found on its home page. See also this piece by Pablo Eisenberg, Senior Fellow at Georgetown's Center for Public & Nonprofit Leadership, published in The Chronicle of Philanthropy.
Chronicle of Philanthropy Annual Salary Survey: Nearly 30% of Nonprofit Leaders Took a Pay Cut This Year
The Chronicle of Philanthropy reported the results of its annual salary survey of large nonprofit organizations, finding that nearly 30 percent of CEOs at the 195 groups that responded to the relevant question saw pay cuts during the past year. This comes after a median salary increase of 7 percent in 2008 based on a Chronicle study of compensation at 325 large nonprofit organizations. Among the most highly compensated executives, those taking cuts included the director of the Museum of Modern Art in New York who made over $2 million in 2008 (including nearly $1 million in deferred compensation and bonuses earned in prior years) and the general manager of the Metropolitan Opera Association, also in New York, who made over $1 million in 2008.