Policy Updates
The Policy Updates page provides timely information on current public policy issues of interest to philanthropy and the nonprofit sector. These updates are also available through the quarterly Public Policy Digest e-newsletter.
If you are interested in receiving the Digest, please contact publicpolicy[at]ncg[dot]org.
from the Summer 2012 Public Policy Digest:
Public Policy Platform | The November Ballot | Vote With Your Mission | All Eyes on Citizens United
Public Policy Platform
As we prepare for the national general election, debates about the role of government, civil society and charitable activity persist. This is also a time of planning for Northern California Grantmakers as we continue to articulate our vision for the work moving forward with our strategic planning process. The resulting blueprints for our work will incorporate policy engagement with our members, and lead us towards being in an even stronger position to serve as the voice for philanthropy in our region. We look forward to envisioning this next chapter along with you.
While we consider the future of NCG, the California regional associations (Northern California Grantmakers, San Diego Grantmakers, and Southern California Grantmakers) are continuing to build relationships with public sector leaders in order to strengthen coordination between policy makers and philanthropy.
In a recent meeting with the California Attorney General's office, NCG's President and CEO Colin Lacon sat down with Belinda Johns, Senior Assistant Attorney General for the Charitable Trusts Section on behalf of the three associations. Discussing ways in which the AG's Office and philanthropy's interests overlap in such areas as education, health, criminal justice and others, our conversation with Johns helped to paint a picture of philanthropy in California and potential partnerships to support community-building efforts in our state.
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The November Ballot: Mixed Blessing for Nonprofits
Guest Article from CalNonprofits
From among the dozen measures slated for this November's statewide ballot, two proposals stand out for their likely impact on the capacity of California nonprofits to fulfill their missions:
"Schools and Safety Protection Act 2012"
Sponsors: Governor Jerry Brown, California Federation of Teachers, "Millionaire's Tax" nonprofit and labor coalition, who in March dropped their rival tax increase proposal and merged with this measure.
Sponsor's intent: ".... temporary revenue increases so we can prevent deep cuts to education and public safety, balance the budget and to pay down the state's debts."
What it does:
- Increases personal income tax on top tier filers for seven years.
- Increases sales and use tax by ¼ cent for four years.
- Makes new funds available to meet Proposition 98 school funding requirements, thereby freeing up revenues to spend for other purposes.
- Constitutionally guarantees funding for public safety services realigned in 2011 from state to local governments.
What It Means To Nonprofits
Depending on how freed-up revenues are allocated, the measure could bring moderate fiscal relief for some nonprofits impacted by decline in government services and in government funding.
It could also mean some social and economic improvements associated with the availability and quality of educational opportunities, which in turn may directly or indirectly advance the missions of nonprofits concerned with social equity and mobility, community development and the like.
There is little chance (unless additional revenue enhancements are adopted in succeeding years) that state government funding for nonprofit grants and contracts and for government programs that share and support nonprofit missions will keep pace with population growth, demographic change and inflation. Additionally, there are uncertain prospects for nonprofit funding after existing tax increases expire. Nonprofits will face a continual scramble to replace state dollars locked up by realignment funding guarantees.
If the measure fails, it will trigger $6 billion in automatic cuts to education, leaving nonprofits to pick up more of the slack to pay for and provide "non-essential" education programs like sports and arts.
"Our Children, Our Future: Local School and Early Education Investment and Bond Debt Reduction Act"
Sponsors: The Advancement Project's Molly Munger, California State PTA
Sponsor's intent: "Investing in our schools and early childhood programs to prepare children to succeed is the best thing we can do for our children and the future of our economy and our state"
What it does:
- Increases state personal income tax rates for most Californians for 12 years.
- Earmarks most of the projected $10 billion in new annual revenue for K-12 schools, 10 percent set aside for early childhood development programs.
- Dedicates 30 percent (projected $1.5 billion in the first year and $3 billion in the second year) to retire school debt, thus relieving pressure on the deficit-plagued general fund, "with savings tending to grow thereafter until the end of 2016-17" according to official ballot analysis, and then dropping to "several hundred million dollars per year," with changes in the funding formula.
What it means to nonprofits:
Depending on how freed-up revenues are allocated, the measure could bring moderate fiscal relief for some nonprofits impacted by decline in government services and in government funding.
Depending on how effectively education funding is spent, California could see some social and economic improvements associated with the availability and quality of educational opportunities, which in turn may directly or indirectly advance the missions of nonprofits concerned with social equity and mobility, community development and the like.
After the tax increase expires, there will be uncertain prospects for nonprofit funding. School districts will decide to allocate funds, possibly providing additional funding for nonprofit early childhood programs.
In short, both of these measures present mixed blessings for California nonprofits. One gives us a temporary, partial repair to the state's fiscal problems (with strings attached that tie up limited dollars in constitutional restrictions), but no long-term solutions. The other puts California's public education system on a path to recovery for a limited amount of time, but does little to restore or maintain the state's safety net, severely damaged by the recession, budget cuts and increasing burden on resource-starved nonprofits.
The lion's share of nonprofit endorsements, including service providers, faith-based and labor, has been in favor of the Brown measure. However, both may fail to persuade a skeptical public, setting the stage for a major fiscal meltdown and a full-blown debate on the inequities and constraints-like supermajority vote requirements for new taxes, constitutional spending formulas and preferential tax breaks-leaving the state and its nonprofit partners without the resources to provide essential public services.
For more information about the enacted 2012-2013 state budget, see analyses from the California Budget Project and the Public Policy Institute of California.
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California Philanthropy Joins Forces With Vote With Your Mission Campaign
Representing the philanthropic sector across the state, Northern California Grantmakers, San Diego Grantmakers and Southern California Grantmakers have joined the Vote with Your Mission campaign to demonstrate the power of the nonprofit community at the ballot box. An effort led by CalNonprofits, the campaign seeks to re-frame the nonprofit sector as a significant segment of the voting public by calling on all eligible nonprofit staff, board members and volunteers to vote in the 2012 elections.
A nonpartisan effort, Vote with Your Mission seeks to increase the number of people voting with the ideals and values that bring them into the nonprofit sector. Signing on to the campaign is simple: an organization pledges to do at least two of six action items, such as asking staff and volunteers to vote or providing nonpartisan voter registration materials. The Vote with Your Mission campaign kit offers tips and resources for participating in the effort, including frequently asked legal questions.
Launched on May 1st, the campaign has quickly picked up momentum, with organizations of all types and sizes from across California participating. Grantmaking institutions are invited to join the movement in amplifying the nonprofit voice on Election Day.
For more information about the enacted 2012-2013 state budget, see analyses from the California Budget Project and the Public Policy Institute of California.
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All Eyes on Citizens United
Congress, the Courts and the IRS continue to take steps toward initiating probes and requiring more disclosure of some 501(c)4 organizations, whose partisan activity may be deemed to be in violation of their tax-exempt status. The current debate around campaign finance reform seems to be centering around the so-called "pop-up" nonprofit organizations that are able to manipulate loopholes in reporting requirements, sidestep campaign finance law and impact elections.
In late July, Senate Democrats once again failed to pass the DISCLOSE act, but vowed to keep the issue on the floor as the campaign season enters full-swing. The DISCLOSE Act (or Democracy Is Strengthened by Casting Light on Spending Elections Act) was initially proposed in 2010 in response to the Citizens United ruling. The Act would require organizations, including nonprofits, who spend more than $10,000 on political ads during an election cycle to disclose donors who contribute $10,000 or more. With support for the bill largely following party lines, there are other non-partisan considerations that advocacy organizations are raising awareness of 'particularly the possibility of unintended restrictions on nonprofits' communications during an expanded 'electioneering' window, and increased reporting requirements on advocacy activity.
With debates ongoing, and a renewed energy towards campaign finance reform in the midst of unprecedented election spending, we encourage all members who support grantee advocacy efforts to be aware of the potential (albeit unintended) consequences that disclosure requirements might entail.