Legislation

Gov. Jerry Brown has signed a bill requiring more transparency from the fundraising arms of California's public colleges.

Brown signed SB8 requiring foundations and auxiliary groups set up by California's universities and college systems to disclose financial records, contracts and correspondence under the public records law.

The $447-billion jobs bill that President Obama announced Thursday night proposes at least two tax breaks that would benefit nonprofit employers. But overall, the plan emphasized the need to help for-profit businesses hire more workers.

The president proposed two provisions to ease payroll taxes, which are paid by nonprofit and for-profit employers. One would cut payroll taxes in half for the first $5-million in payroll; the other would temporarily eliminate payroll taxes for salaries of new workers or raises for current workers.

The New Jersey Supreme Court unanimously declared Tuesday that the nonprofit New Jersey League of Municipalities is subject to the same open-record disclosure standards as the municipal governments it represents. The decision means that the League is no longer able to use its nonprofit status to deny access to records that it and other nonprofits have typically thought of as protected from public disclosure.

New Jersey regulators have decided not to pursue a proposal to require charities to tell donors they can earmark their contributions for specific programs, an idea that had drawn strong criticism from nonprofit leaders. The draft proposal, issued in June by the Division of Consumer Affairs, would have required charities with at least $250,000 in annual contributions to provide forms allowing donors to specify how their gifts should be spent — and to tell them that any undesignated money could pay for administrative and fundraising costs.

During the Nonprofit Organization of the Year Award Luncheon at the 2011 New York Nonprofit Conference last Wednesday, the talk prior to the Human Rights Campaign accepting the honor centered around the measures to eliminate nonprofit mail discounts and restrict charitable deductions.

The Internal Revenue Service has yanked the nonprofit status of thousands more charities nationwide, including another 500 in Orange County, Calif.

The IRS updated its database of nonprofits which had their status revoked last week. You can find the IRS’s spreadsheets for all non-profits-no-more here.

What does this mean to you? It means the money you donate to these organizations, or pay as membership dues, is no longer tax-deductible. It also means their income is subject to tax.

Why is this happening? These organizations automatically lost tax-exempt status because they failed to file financial reports for three straight years.

The tentative deficit deal between President Obama and House Speaker John Boehner does not make any changes in the tax deduction that donors receive for making charitable gifts.

The deal, which would trim the federal deficit by almost $2.5-trillion over the next 10 years, identifies $900-billion in spending reductions now and would require Congress to pass $1.5-trillion more in cuts by December 23. It is in that process that reducing or eliminating the value of the deduction could come under consideration.

A new plan to promote transparency among Oklahoma's charities took effect earlier this month, and leaders in the nonprofit and government sectors are working together to meet the new guidelines.

During the 2010 legislative session, Sen. Susan Paddack, D-Ada, wrote a law overhauling the state's nonprofit registration process. The new rules went into effect July 1.

Charities are legally required to report financial information with the secretary of state, but many groups don't know they have to register annually.

A proposal to reduce the federal debt unveiled on Tuesday calls for changes to the charitable deduction as part of an overall strategy to overhaul the tax code.

An executive summary of the plan—drawn up by a bipartisan group of senators dubbed the “Gang of Six” and praised by President Obama—does not spell out what those changes might be. However, it says its overall strategy is “consistent” with recommendations that the president’s debt commission issued last year.

That plan called for replacing the charitable deduction with a 12-percent tax credit.

Sen. Charles E. Grassley, senior Republican on the Senate Judiciary Committee, has introduced legislation that would deny some federal money to charities that put money in offshore accounts to avoid paying income taxes.

The Iowa senator has proposed barring such charities from getting grants from a federal program that helps prisoners re-enter society.

Grassley’s move, an amendment to a bill pending in the Judiciary Committee to extend the so-called Second Chance Act, takes aim at unrelated business income tax. Those are taxes that charities owe on income they earn from businesses that are not directly tied to their charitable missions.