On May 4, President Trump signed an Executive Order declaring the executive branch’s goal to “vigorously enforce Federal law’s robust protections for religious freedom.” Of particular interest to the broad-based charitable community is a provision that purports to make it easier for religious institutions to engage in partisan political speech and electioneering – activities that are prohibited for 501(c)(3) organizations under the “Johnson Amendment.” (Another provision concerns whether insurance companies must cover contraception for individuals if their employers opt out for religious reasons.)
The President’s Executive Order is likely to face legal challenges from a variety of organizations, some of which reportedly are already in the process of preparing their legal filings. But in the meantime, what does it actually say, and what does it mean for 501(c)(3) organizations? Arguably, it says and means both nothing and everything simultaneously.
Proposed “Johnson Amendment” repeal would harm 501(c)(3)s
by Linda M. Czipo
Since 1954, tax law has contained a provision prohibiting 501(c)(3) organizations from directly or indirectly attempting to influence the election or defeat of any candidate for public office. This ban, also known as the Johnson Amendment for its sponsor, then-Senator Lyndon B. Johnson, applies not only to churches, but to all 501(c)(3) organizations.
In the wake of last week’s 2016 presidential election, there is clearly a high degree of uncertainty, speculation and concern across the country. It would be foolish and presumptuous of me to pretend to have any great wisdom to offer as we embark on this new chapter. But like most everyone else, I’ve certainly given it a lot of deliberation. So I humbly offer a few thoughts, some professional and some personal, as we move forward – with advance apologies that this might be a little disjointed.
On the professional:
The work that non-profits do remains more important than ever.
Non-profits are often the backbone of communities, providing programs and services that make communities good places to visit, live and work; employing members of the community; and providing training and education that helps people find and keep jobs. Non-profits are also often the first, last or only source of help for people in distress.
We’ll know more in the coming weeks as appointments and proposed policies take shape, but one thing is certain: the people that rely on us need our voices, our advocacy, our programs and our protection. This was the case before November 8, and it’s just as true now.
Because of the frightening steps taken by some to exclude certain groups of Americans — minorities and the poor — from voting this election, it’s never been more essential for the leaders of the nation’s nonprofits to urge all Americans to go to the polls.
On November 8 voters across the country get to decide who fills 5,920 state legislative seats along with 93 statewide offices such as governor (12 to be elected), attorney general (10), and secretary of state (eight). Each officeholder can make a significant difference to nonprofits, as can the thousands of local city, county, judicial, school district, and special district officials up for election in November.
Those races are especially important to nonprofits, given the dysfunctional gridlock in Congress. The main policy action affecting the work of nonprofits and foundations will continue to be at the state and local levels. Nonetheless, the mainstream news media will continue to focus on the presidential election and races for 34 U.S. Senate slots and 435 Congressional seats.
What’s at stake for the future of our communities?
It’s no secret that the slow economic recovery continues to take its toll on the ability of New Jersey’s non-profits to provide essential services for our communities in the face of a stagnant funding environment.
One important way to address the problem is to make it easier for people to give to charity by providing a state-level tax deduction for charitable donations. Several bills now pending in the New Jersey Legislature would allow taxpayers to deduct their charitable gifts from their state income taxes.
A New Jersey charitable deduction would be good for our state’s charities and everyone that relies on them. Here’s why:
The full report lays out in detail the ups and downs experienced by non-profits during the previous year, and their outlook for 2016. Here are the major highlights, based on the 311 New Jersey non-profit respondents from late January/early February 2016:
Nearly three-quarters of responding organizations reported that demand for services had increased during the past year.
Nearly four-fifths expected demand to continue rising in 2016.
Only two-fifths reported receiving more total funding in 2015 than in 2014, but nearly two-thirds reported that their expenses had increased during the same period.
Over one-third (35%) reported that expenses exceeded support and revenue during their most recently completed fiscal year; the proportion was even higher (44%) among larger organizations, those with annual budgets of $1.5 million or more.
Seventy percent expected their total expenses to increase in 2016, but fewer than half (47%) expected total 2016 funding to increase.
If you’ve seen our previous surveys or if you work regularly with non-profits, these findings may sound like variations of a familiar theme. You may even think that they’re better than during the worst of the recession – and that’s true. But if you care about the well-being of the non-profit community and non-profits’ ability to provide vital programs and services, these numbers should generate deep concern.
Did we see you there along with over 400 of your closest non-profit friends and family? If so, we hope we got a chance to tell you how much we appreciate all you do for New Jersey. But, often like being in the wedding party, we only had fragmented conversations, waves from afar and quick handshakes or hugs.
The conference, as we all know, isn’t a party (though there was plenty of good food and enjoyment to be had). It’s a chance to connect with allies old and new, foster a collective spirit, and gain valuable insight and tools for the good work you do every day.
The 2015 conference was also the start of some wonderful relationships and important dialogues — including these Top 5 Takeaways many of you shared with us:
Every day, our lives are touched in some way by the work of charitable organizations. Charities play an essential social and economic role in making our communities attractive places to live, work and grow.
While a slow economic recovery and rising demand for charitable services mean that charities need donor support more than ever, donors may become overwhelmed by the various requests for contributions. For donors trying to sort through these appeals, wise giving choices have never been more crucial.
You don’t need to have an elaborate plan to “do good,” but you can take steps that will help you to be confident in the decisions you make.
A few weeks ago, I gave a keynote speech to a large group of youth involved in philanthropy, along with a few of their parents and mentors. My topic was “The Role of Equity in Philanthropy.” It was awesome that we had kids ages 8 to 24 engaged in grantmaking and other aspects of philanthropy. They were smart and hungry and full of hope and possibilities, bright minds not yet beaten down to a haggard shell haunted by endless grant rejections and complex community dynamics and the sudden dawning realization of the ephemerality of existence, cowering in the supply closet on a fold-out cot, cradling a stuffed unicorn while Green Day’s “Boulevard of Broken Dreams” plays softly from a phone.
(What, like your Friday nights are soooo much more exciting.)
“As budding philanthropists,” I said to the youth, “you have probably seen the illustration of the difference between Equality and Equity. You know, the drawing of those kids standing on those boxes looking over a fence at people playing baseball.”
As if on cue, two kids came up to the stage with a drawing they had done earlier of the iconic image on easel paper. I stuck it to the lectern. “Get used to this image,” I said, “Have it burned into your mind. Because you will not be able to avoid it. It will haunt your dreams.”
Equality and Equity are frequently brought up in our field, oftentimes with colorful metaphors like “Equality is making sure everyone gets a pair of shoes, but Equity is ensuring that everyone’s shoes actually fits them.” A female colleague of mine once said, “Think about bathrooms. Equality is about men and women both having bathrooms. But Equity is ensuring that…uh…there’s more toilet paper in the women’s bathroom, because we need it more…”
Whatever the metaphor, there seems to be this general belief that Equity is an advanced version of Equality, or that they both are great but in different ways. But in the past few years, I’ve seen more and more evidence that Equality actually prevents Equity from succeeding. Equality is a strong force, and we are drawn to its sexy and hypnotic, but ultimately destructive power. Here are a few areas, some discussed in previous posts, where Equality’s gravity pulls us into its deadly orbit:
While most of the news media coverage has been largely (dare I say overly?) focused on the presidential election that’s over a year away, New Jersey has an important election taking place next week. This post is a plea to put aside the presidential hype for a few days and focus on an election much closer to home.
On November 3, New Jerseyans will go to the polls to elect all 80 members of the General Assembly as well as hundreds of local township officials, board of education representatives and more.
Why should you care more about this – at least right now – than the 2016 race for the highest elected office in the country? Simple: because state and local representatives enact far more legislation than our leaders do in Washington, and these actions affect your everyday life.