The Washington Regulatory Climate: Recent Issues of Interest to Nonprofit Organizations
So… have you been focused on our nation’s capital lately? Does it seem a bit tough right now? Is it a swamp or an oasis? If you are not in Washington D.C., take a moment to read this. The DMA Nonprofit Federation (DMANF) protects and defends nonprofit fundraising to advance responsible data-driven fundraising and marketing. We have been following matters closely with the advent of the new administration on Capitol Hill.
As you know, in order to progress on issues, it is vital to have substantive cooperative discussions across party lines, but this is not possible in the short term. There are two worlds operating in Washington—the political realm in terms of political parties and never-ending campaigns, which is very tough right now, and the regulatory realm, where issues of interest specifically to nonprofit organizations are advancing via policy-making (and that realm is moving very slowly due to the politics of the day). Let’s say it is a bit swampy amongst the White House, Democrats, Republicans, Independents, etc.
However, the work continues, and much is happening that you need to be aware of as fundraisers and communications professionals in the nonprofit sector. Our current policy goals are clear cut: preserving charitable giving incentives such as the retention of the charitable tax deduction; supporting postal reforms that will keep a stable U.S. Postal Service; and generally keeping marketing channels open for fundraising; i.e., review of data and privacy legislation that could hurt overall fundraising by restricting common data sharing practices necessary for effective fundraising. We focus on the House of Representatives and Senate Committees that oversee tax policies, the U.S. Postal Service, the Federal Trade Commission and Federal Communications Commission as they oversee marketing and communications channels, privacy and proper data stewardship. Here is a recap of pending issues.
Charitable Tax Deduction and Other Giving Incentives
We have been successfully defending the charitable tax deduction for individuals, but a new challenge has surfaced.
Currently, donors who itemize their taxes may claim up to 35 percent of the amount donated to charities as a tax deduction. This giving incentive must be preserved at its current rate. Key members of the U.S. Senate say it best:
“Every charitable gift has one thing in common: the donor is always left worse off financially, but society is made better.” — Orin Hatch (R-UT), chairman of the Senate Finance Committee.
“The charitable deduction is a lifeline, not a loophole.”— Senator Ron Wyden (D-OR), ranking member of the Senate Finance Committee.
The Trump administration recently released its tax reform proposal, which keeps the charitable tax deduction intact. However, it doubles the individual standard deduction amount. This means that fewer donors will itemize deductions and will claim the standard deduction instead. The charitable tax deduction will no longer be taken by millions of donors, leading to less overall giving—unless the charitable tax deduction is preserved by allowing it universally for 100 percent of all taxpayers, regardless of the standard deduction. Without such a universal charitable tax deduction, charities could lose billions in local donor support, devastating to the nonprofit sector and our nation.
Postal Legislation and Nonprofit Mailing Rates
The nonprofit postal rate discount is essential to help eligible nonprofit mailers mail affordably, and the current rate-setting system should remain in place to stave off unpredictable rates.
We face a double whammy right now. There is pending postal legislation (H.R. 756 marked up in March, awaiting further House consideration) that may be taken up by Congress soon; reform legislation comes up every session due to inherent problems for the USPS finances. The bill is meant to solve the pre-funding mandates that drain USPS resources and “modestly” increases postal rates including a penny increase on first-class mail. Also, there is a “10-year” review of postal rates across the mail classes conducted by the Postal Regulatory Commission. We filed comments supporting the current Consumer Price Index cap, which has allowed for more predictable rates each year and stabilized pricing, advocating against changes to the current structure. A stable system is better than unpredictable increases.
Other Recent Issues
• The Federal Trade Commission and state regulators held a one-day workshop in March to tackle the issue of donors and charitable fundraising, spurred by the Reynolds’ family charities scandal. Discussion centered on what more charities can do with their own practices to ensure donors continue to have trust in charitable fundraising. There were educational panels that provided needed overviews of the fundraising process and focus on charity watchdogs and their work. As discussion focused on “bad actors,” many of the “good actors” seemed to want to take on added scrutiny and compliance measures, with little answers for the active pursuit of fraudulence. Regulators should focus resources to pursue bad actors to help the entire community root out fraud that taints fundraising, the community needs to spot the bad actors and report this immediately. For more information, visit goo.gl/LEQAqR.
• Robocall Rules and Charities Reminder. If you are reaching out to donors via a telemarketing campaign, you and the agency you are using must be aware of the recent changes to the Telephone Consumer Protection Act. This requires advance written permission for calls made using an “auto-dialer,” which has been defined very broadly in the new rules. If you do not have proper consent, you could face serious fines. I am happy to provide more detail, and you can review the rules at goo.gl/zrdQPA.
• No updates on changes to the Fair Labor Standards that would have increased the salary baseline for your employees to a higher salary threshold (from $23,660 to $47,476). For the non-exempt employees who can qualify for overtime pay, this has been a concern for charities as far as staffing resources. (That is still on hold due to court action now in the Fifth Circuit.)
If you seek to get involved to help with these issues or need additional information, please
contact me at email@example.com. We will keep our eyes on the issues, but your active
involvement is invaluable to the sector during this pivotal time in our nation’s capital.
Note: Opinions herein do not necessarily reflect the views or positions of the DMANF membership unless otherwise noted.
This article featured in the June 2017 issue of NonProfit PRO. Click here to see the full issue.
As the internal General Counsel for the DMA division of the ANA, Ms. Boone leads the organization’s efforts in ethics, compliance and best practices for the data-driven marketing community. She has over 25 years of communications law experience spanning the range of marketing and fundraising issues. She manages Board-level Committees on DMA’s ethical guidelines, the policing of members’ compliance with the guidelines, and reviews best practices with marketing practitioners. She leads educational efforts on topics of interest on corporate & social responsibility, and works with DMA members on marketing and fundraising compliance. Since 2002, Boone leads the DMA’s Nonprofit Federation (DMANF) of nearly 400 nonprofit organizations and fundraisers before Congress, state and federal regulatory bodies to protect charitable speech. Since 2012 she helps oversee the DMA’s Email Experience Council, an organization of responsible email marketing practitioners. Prior to DMA Boone worked on behalf of newspaper publishers on media policy and communications law issues at the National Newspaper Association.
Boone has a Juris Doctor from Catholic University in Washington, D.C. and a B.A. in Journalism cum laude from Temple University in Philadelphia, Pennsylvania. She is an adjunct professor on marketing ethics at Georgetown University’s School of Continuing Studies. She is a member of the District of Columbia Bar & New Jersey Bar.
Mrs. Boone was honored as a “Top Woman in Fundraising” by Fundraising Success Magazine in 2006. She resides in Southern Maryland with her husband and daughter. Boone is a classically trained ballet dancer.