Daily Digest 12/31/2008

• IRS sets public hearing on proposed record-keeping rules for charity groups [Chronicle of Philanthropy]
  
  
• Were charity groups the key to Madoff’s Ponzi scheme? [Fortune]

IRS Finalizes Revised Form 990

Last week, the Internal Revenue Service (IRS) finalized its revised Form 990 and 990-EZ information returns which many tax-exempt organizations are required to file in the coming year. In addition, the IRS has also released an updated schedule and filing instructions.

The finalized forms, which will be used by filers beginning in 2009, contain several changes that may impact the amount of information charities must submit to the IRS including, among other revisions, new details on compensation, governance practices and information related to affiliated organizations.

In response to these changes, Alliance for Justice is pleased to offer a comprehensive, low-cost training opportunity in Washington, DC on the design, priorities and challenges of the revised Form 990:

990s for Real People
The Design, Priorities and Challenges of the Redesigned Form 990
from the Preparer's Perspective
Thursday, February 5, 2009
9:00 am - 5:00 pm
Washington, DC
Location: TBD
Register here!

Daily Digest 12/30/2008

• Federal judges put latest BCRA challenge on fast track, appeals likely to follow [BNA]
  
  
• Does the FEC need to step-up its enforcement policies? [Washington Post]
  
  
• Even with economic troubles, some nonprofits ending 2008 funding on a high note [Sacramento Bee]

New DC License Requirement for Nonprofits - Deadline for Some Groups December 31!

Important news if your organization does business in the District of Columbia. Thank you to Harmon, Curran, Spielberg & Eisenberg, LLP for allowing us to re-print this important update.

New DC License Requirement: December 31 Deadlines for Some Organizations

The District of Columbia has instituted a new licensing requirement that will affect many nonprofit organizations. Previously, only businesses engaging in specially regulated activities were required to obtain a Basic Business License (BBL). For nonprofits, this usually only applied to those conducting charitable solicitations in the District. Under the new rules, any organization that does business in DC and that was not previously required to get a BBL must also obtain a BBL with a “General Business License” endorsement. The District of Columbia Department of Consumer and Regulatory Affairs (DCRA) has created the BBL EZ-FORM for use by registrants that require only the general business license and not any other category of license.

If your organization has a DC tax ID number and does not already have a BBL, you will have to file this form and pay the associated fees. The DCRA has established rolling deadlines for this new program, and the first deadline is December 31, 2008. Deadlines for DC corporations are set by zip code, with a deadline of December 31, 2008 for the following zip codes: 20005, 20012, 20015, and 20019. Corporations from other DC zip codes must file in the following months. All “foreign” (non-DC) corporations, including nonprofits, incorporated in Alaska, Alabama, Arkansas, Arizona, California, and Colorado must submit an application by December 31, 2008 as well. Corporations from other states must file in the following months. Corporations that do not submit an application by their assigned deadline will incur a $2,000 penalty. A complete list of deadlines can be found at:

• District Corporations: http://dcra.dc.gov/dcra/cwp/view,A,1343,Q,642638.asp
• Non-District Corporations: http://dcra.dc.gov/dcra/cwp/view,A,1343,Q,642645.asp

More information about this program and the BBL EZ-FORM can be found at: http://dcra.dc.gov/dcra/cwp/view,A,1343,Q,642631.asp.

Daily Digest 12/29/2008

• National Council of Nonprofits presses Obama to address key issues affecting nonprofits [Chronicle of Philanthropy]
  
  
• Does the battle over Proposition 8 strengthen the case for donor anonymity? [Wall Street Journal]
  
  
• Is the FEC reversing its positions on 527 activity?
  [More Soft Money Hard Law]

Daily Digest 12/23/2008

• For Charities, a Season of Need--With Donations in Free Fall, Groups Try to Capture Holiday Generosity [Washington Post]
  


• Blumenthal May Investigate Charities Ripped Off By Madoff [Forbes]
  


• Bush v. Gore to Outlast its Beneficiary [New York Times]
  
  

Daily Digest 12/22/2008

• Federal Court to Set Fast-Track Schedule For Deciding Republican Challenge to BCRA [BNA Money & Politics] (subscription required)
  


• Charities Calculate Losses in Alleged Ponzi Scheme
  [Chronicle of Philanthropy]
  


• Charity Rankings Giveth Less Than Meets the Eye
  The Ratings of Nonprofits Are Often Uncharitable, Sometimes Failing to Credit Crucial Factors Such as Success
  [Wall Street Journal]
  
  

WANTED: Nonprofit Seeks Plug to Fill $41 Billion Budget Deficit With Solution That Won’t Hurt Our Constituents; Unqualified Applicants Need Not Apply

Throughout most of our nation’s history, any so-called “safety net” has been the result of the efforts of the country’s vibrant nonprofit sector. Now, in the midst of unprecedented economic turmoil and declining state revenues, the nonprofit sector is being called upon once again to provide a host of services and resources to ensure that vulnerable communities and constituents aren’t completely devastated by a looming recession, accompanied by deep state government cuts.

Nonprofits across the country and in California have a long history of finding creative solutions to keep their constituents healthy, fed, and safe from environmental and social harm – with limited resources. This year, many organizations providing direct services to constituents are faced with deep cuts to already razor-thin budgets – due in large part to widening budget deficits in state and local budgets. In California, experts estimate the budget deficit is as high as $41 billion (making the state’s budget deficit larger than the total budget for a number of other states combined). While California nonprofits have been bracing for cuts to education, healthcare, and other social programs for some time; on Monday, the California Republican Caucus released numbers for its proposed cuts to programs – including cutting $10.6 billion from the California public schools, $3.9 billion from mental health, and $2.1 billion from preschool programs.

While no one (I’m guessing not even the plan’s drafters) believes this plan will be given much more than a cursory review by the California Legislature (given that the plan calls for cuts to some “pet programs” of the Governor and the Majority Leader for the state’s upper house and would require voter approval), I hope seeing these numbers in the light of day will trigger alarm bells for nonprofits across the country, including organizations that have historically provided only direct constituent services. I hope seeing these numbers will remind other nonprofits it is time for them to find their seat at the “policy table” and participate in the debates that will shape their state’s budget.

In California, while the state’s budget policy table has historically had only six seats – enough room for the government’s “Big 5” (the Governor and the Majority and Minority leaders for both the upper and lower houses) and powerful corporate lobbyists – this year we hope nonprofits will demand a bigger table with more seats. Nonprofits are the best resources on the budget because we know what our constituents need and how cuts to certain programs will impact our constituents, we have creative and innovative ways of solving budget shortfalls, and we have a great deal of experience in providing so much with so little.

Attorneys at Alliance for Justice are available to provide free technical assistance on how nonprofits can safely lobby on federal, state and local budgets; and aggressive outreach strategies to work with those nonprofits that recognize that they need to be a part of upcoming budget debates. It is time that the larger nonprofit sector demands its place at the policy table.

Making Voting Easier in Virginia

It’s a new day in Virginia, a really new day. In a state more renowned for shutting down democracy then welcoming it with open arms, we learn that Virginia Attorney General Robert McConnell has offered eight proposals for election reform designed to encourage voter participation.

McDonnell could stand to benefit from these proposals if passed by the State Assembly as he is a Republican nominee for the gubernatorial seat which becomes vacant by term limit in 2009, but we see no self interest in his proposals. Instead, they evidence the desire to enhance the much discussed (and ever so slight) increase in civic participation this year.

It would seem like Virginia may be realizing its new power in the electoral process, fresh from delivering its 13 electoral college votes to President-elect Obama just this week (Obama won 52.62% of the vote). These coveted 13 votes created a fury of spending in Virginia leading up to the presidential election and inevitably resulted in a 74.54% voter turnout in Virginia overall.

Admittedly we have not been able to locate and review the complete list of proposals McDonnell offered but we fully support those being discussed in the Washington Post today: adding voting precincts to keep the lines manageable and working to improve the accuracy of voter registration lists are much appreciated. Of special mention, I am particularly fond of eliminating the prohibition against wearing buttons and clothes with political messages at polling places. Will my baseball cap really cause someone in line to change their vote—doubtful, so very doubtful.

Yes, Virginia, there is a Santa Claus, and he might be bringing some lovely election reform to you.

Daily Digest 12/18/2008

• Kentucky creates state Commission on Philanthropy
  [Chronicle of Philanthropy]

• New Mexico nonprofits file lawsuits against Secretary of State’s demands to register as political committees
  [New Mexico Independent]
  
  
• Former Casa de Maryland board president finds calling in Obama transition team [Maryland Gazette]
  
  
• Is new legislation required to protect nonprofits from investment scams? [Politicker NJ]

Daily Digest 12/17/2008

• Following months of delays, FEC finally aims to consider rule on campaign “bundling” this week [BNA] (subscription required)
  
  
• Election-related proposals from Virginia Attorney General designed to create “less hassle for the voters and more clarity in the law” [Washington Post]
  
  
• Obama team looks to reverse Bush-era restrictions on reproductive rights [Wall Street Journal]

Daiy Digest 12/16/2008

• “Nonprofit 911” coalition aims to help nonprofits survive tough economic times [Chronicle of Philanthropy]
  
  
• Voter ID laws back on the table in the Lone Star state
  [Houston Chronicle]

Daily Digest 12/15/2008

• Is Obama focusing too much on social entrepreneurship?
  [Chronicle of Philanthropy] (subscription required)
  
  
• Protecting voters remains key to successful election reform
  [More Soft Money Hard Law]
  
  
• The new rules for pillow talk inside Washington. Spousal Ties to Lobbying Test a Vow From Obama by By Charlie Savage and David D. Kirkpatrick, Washington Post
  
  
• Lobbying is democracy in action--amen to that. An Obama Gift for K Street By Robert Samuleson, Washington Post
  
  
• Retaining charitable goals proves costly for some nonprofit hospitals [Wall Street Journal]

Weekly Wrap-Up: December 8-12, 2008

LOBBYING

• Senate Superintendent of Public Records says “tweaking” of HLOGA guidance to be finalized by January 1st...

  » BNA Money & Politics (subscription required)
  
  
• Will the exclusion of lobbyists slow the process of creating new policies in Washington?
  » Roll Call (subscription required)

ELECTION ACTIVITY

• Federal Election Commission (FEC) drops enforcement cases against McCain, Clinton and Giuliani...
  » BNA Money & Politics (subscription required)
  

• The Election may be over, but the battle over our voting system soldiers on...
  » The New Republic
  
  
• When it comes to campaign finance, are convention-related contributions the biggest loophole of all?
  » Minnesota Independent
  
  
• With signs of improvement over 2004, foundations are expected to make further investments to improving accessibility to polls on Election Day...
  » Chronicle of Philanthropy
  
  
• Citizens United, Speechnow.org cases set the stage for a campaign finance showdown...
  » BNA Money & Politics (subscription required)

OTHER RELATED STORIES

• Charity groups see potential for innovative ideas in tough economic times...
  » Washington Times
  
  
• Obama calls on Latino advocacy group leader to head Office of Intergovernmental Affairs...
  » Chronicle of Philanthropy

When Does Donor Intent Matter?

Although generally a problem related to contributions of art or large endowments, a problem any self-respecting advocacy organization would welcome, the lessons of donor intent conflicts are important to nonprofits large and small.

Take for example, the recent settlement by Princeton University with the heirs of Charles and Marie Robertson of the A & P grocery fortune.

The Robertsons gave a substantive endowment ($35 million) to Princeton University for the purpose of encouraging and preparing students for government careers. Princeton spent the money preparing students for a broad range of public service careers. The Robertson heirs disagreed with how Princeton was using the funds and pursued legal action. After each side has spent $40 million in attorney fees, now comes a settlement by the parties staving off a January jury trial.

There have been other infamous donor intent fights, allegedly beginning with Henry Ford II in 1976 who resigned from the Ford Foundation board after complaining that the Ford Foundation was straying from his father’s conservative principles. The Ford Foundation held its ground and did not change the course of its funding without harm or foul. There was also the Barnes Foundation battle in Philadelphia. Albert Barnes had a tremendous art collection which a consortium of funders in Philadelphia thought would be best preserved by moving it from its cramped suburban home in Merion, PA to a museum in Philadelphia. The heirs of Albert Barnes knew Mr. Barnes loathed Philadelphia and its art community and argued in court that it was never his intent that the collection be moved to Philadelphia.

What is the moral of these stories? It seems we are seeing an increased willingness on the part of heirs to stick to the script without room for interpretation. Nonprofits should consider the Princeton outcome when accepting and dealing with gifts that come with specific conditions. Heirs, most likely, are better suited to fund lengthy litigation. Nonprofits are least equipped to afford seemingly endless legal fees and should also consider the public relations costs that are not always initially apparent.

There are losers and winners in the Princeton settlement. The winner: the lawyers, clearly. The losers: any nonprofit who gets a gift and does not err on the side of caution in interpreting donor intent.

Daily Digest 12/11/2008

• Citizens United, Speechnow.org cases set the stage for campaign finance showdown [BNA] (subscription required)

• Charity groups see potential for innovative ideas in tough economic times [Washington Times]
  

Daily Digest 12/10/2008

• Senate Superintendent of Public Records says “tweaking” of HLOGA guidance to be finalized by January 1st [BNA] (login required)

• With signs of improvement over 2004, foundations are expected to make further investments in making it easier to vote on Election Day [Chronicle of Philanthropy]
  
  
• Are convention-related contributions the biggest loophole of all? [Minnesota Independent]

Daily Digest 12/9/2008

• IRS announces new plan to reconcile tax-related disputes for nonprofits [Chronicle of Philanthropy]

• The election may be over, but the battle over our voting system soldiers on [The New Republic]
  
  
• Obama calls on Latino advocacy group leader to head Office of Intergovernmental Affairs [Chronicle of Philanthropy]

U.S. House and Senate Seek Comments on Form LD-203

The Clerk of the U.S. House of Representatives and Secretary of the U.S. Senate are seeking public comments about the need to revise and provide additional guidance on the Form LD-203 Semi-Annual Disclosure Form for registered lobbyists and individual lobbyists. Taking into account the numerous new registrants and filers and the many requirements imposed under the Honest Leadership and Open Government Act of 2007 (HLOGA), they are considering revising existing guidance and potentially providing new additional guidance on issues that may create confusion for filers.

Currently, HLOGA requires lobbying registrants and individual lobbyists to file a semi-annual report of certain contributions, along with a certification that the filer understands the gift and travel rules of both the House and the Senate. LD-203 forms are due by July 30th (for the January through June reporting period) and by January 30th (for the July through December reporting period) or the next business day should either of those days fall on a weekend or holiday.

Registered lobbyists or lobbying entities should take advantage of this recent request by directing any comments or suggestions to the Senate Office of Public Records and the House Legislative Resource Center before the next reporting cycle (January 30th), so that their comments may be evaluated and incorporated in future guidance issued to the lobbying community.

For more information about where to send comments and LD-203 requirements please visit: http://lobbyingdisclosure.house.gov/.

Daily Digest 12/8/2008

• FEC drops enforcement cases against McCain, Clinton and Giuliani [BNA] (login required)

• Will the exclusion of lobbyists slow the process of creating new policies in Washington? [Roll Call]
  
  
• Minnesota court ruling paves the way for future challenges to IRS audits of tax-exempt churches [Chronicle of Philanthropy] (login required)

Weekly Wrap-Up: December 1-5, 2008

LOBBYING

• Reform groups press House leaders for additional lobbying and ethics reforms...
  » BNA Money & Politics (subscription required)
  
  
• Will Obama use his massive e-mail list to sway Congress?
  » Bloomberg
  
  
• Proposition 8 protests renew spirited debate over churches and tax-exempt status...
  » San Francisco Chronicle
  
  
• Will a "no-gift list" for lawmakers in Oklahoma be a successful alternative to traditional ethics reform?

  » Oklahoman

ELECTION ACTIVITY

• Democrats, Republicans prepare to battle over possible elimination of early voting in Ohio...
  » Associated Press

• Does a newly elected legislature in the Badger State signal reform for Wisconsin's disclosure laws?
  » Wisconsin State Journal
  

• The Federal Election Commission (FEC) aims to set rule allowing for administrative fines against reporting violations...
  » BNA Money & Politics (subscription required)

FOUNDATIONS

• New study says foundation grantmaking reaps big benefits for the U.S. economy...
  » Chronicle of Philanthropy
  
  
• Sources say Bill Clinton will reveal Clinton Foundation donors ahead of Hillary Clinton's confirmation to Secretary of State...
  » New York Times

OTHER RELATED STORIES

• Charity leaders tapped to advise President-elect Obama on reported "innovation agenda..."
  » Chronicle of Philanthropy
  
  
• For nonprofits, change means a renewed committment to the charitable sector...
  » The Cohen Report

Daily Digest 12/4/2008

• Reform groups press U.S. House leaders for tighter lobbying and ethics reforms [BNA] (login required)
  
  
• Study says foundation support reaps big benefits for U.S. economy [Chronicle of Philanthropy]
  
  
• Democrats, Republicans prepare to battle over possible elimination of early voting in Ohio [Associated Press]

Daily Digest 12/3/2008

• Charity leaders tapped to advise President-elect Obama on “innovation agenda” [Chronicle of Philanthropy]

• For charity groups, change means a renewed commitment to the nonprofit sector [The Cohen Report]

Daily Digest 12/2/2008

• Does a newly elected state legislature in Wisconsin signal reform for the state’s disclosure laws related to “issue ads?” [Wisconsin State Journal]

• Will Obama use his massive e-mail list to sway Congress? [Bloomberg]

• Proposition 8 protests renew spirited debate over churches and tax-exempt status [San Francisco Chronicle]

Daily Digest 12/1/2008

• FEC aims to set rule allowing for administrative fines against reporting violations [BNA] (login required)

• Will a “no-gifts list” for lawmakers in Oklahoma be a good alternative to banning all lobbyists’ gifts? [Oklahoman]

• Sources say Bill Clinton will reveal Clinton Foundation donors ahead of Hillary Clinton’s confirmation to Secretary of State [New York Times]