Efforts in Massachusetts and Oregon to place new financial restrictions on nonprofits have failed to become law. In Massachusetts, lawmakers last week rejected a proposal that would have prohibited nonprofits from paying their boards of directors.
Oregon lawmakers, meanwhile, have failed to approve a measure that would have required charities to spend at least 30 percent of their expenses on programs or else be unable to allow donors to get a charitable deduction.
If you donate to charities next year, don’t expect any thanks from state government.
As part of the recently signed state budget, Michigan tax credits for donating to food banks, homeless shelters and community foundations will be eliminated.
Leaders of local nonprofit groups are divided on the effect of the change, though all hope Michigan residents will continue to donate. Charitable donations make up large portions of their operating budgets.
House lawmakers have introduced a bill that would change the way private foundations pay taxes on their investment income by creating a flat tax rate. The bill — which was introduced by Rep. Erik Paulsen, a Minnesota Republican, and Danny Davis, an Illinois Democrat — has the same language as proposed legislation that Sen. Charles Schumer, Democrat of New York, introduced in the Senate in March.
Both the House and Senate bills call for eliminating the existing two-tiered tax rate and setting a flat tax of 1.39 percent.
The Illinois state government has borrowed about $1.17 million this fiscal year from money that Illinois taxpayers designate on their tax returns for charitable use, The News-Gazette in Champaign reported. Lawmakers signed off on the plan to help deal with a multibillion-dollar state budget deficit.
Kelly Kraft, spokeswoman for the state Office of Management and Budget, said she expects the state to repay the money within a few months. By law, the money has to be returned, with interest, within 18 months, she said.
But officials from some of the charities say taxpayers are being fooled.
According to the Boston Foundation, 56 percent of small nonprofit organizations do not offer retirement plans for their employees. This impacts employees at more than 3,050 small nonprofits throughout Massachusetts.
This past week, the Committee on Public Service, which Sen. Katherine Clark chairs, held a hearing on an act to provide retirement options for nonprofit organizations. This legislation would allow nonprofit employees to make voluntary contributions to a 457 deferred compensation plan that would be overseen by the Treasurer’s Office.
Mayor Michael Bloomberg, who has long been considered a patron of nonprofits, took steps on Thursday to unleash the growth potential of that community by announcing the formation of a new entity committed to helping the city's 501(c) organizations gain access to low-cost, tax-exempt financing to expand or upgrade facilities.
According to the mayor's office, more than 13 organizations have gone to out-of-state funding sources for assistance in financing capital projects totaling more than $337 million since June 2009.
Many nonprofits and their affiliates could face expanded requirements to disclose information to the Internal Revenue Service if some tax-agency officials and advisers get their way. What’s more, the IRS might require each affiliate to prove it deserves tax exemption, rather than granting one exemption to cover every affiliate.
Such changes could be a big deal — 250,000 charities are part of big national organizations, the IRS estimates. Organizations like the American Cancer Society, Habitat for Humanity, and the NAACP all would be affected by a change.
Minnesota’s nonprofit agencies could join state workers and residents receiving state services in feeling the pain of a state government shutdown. That’s according to Jeannie Fox, a spokeswoman for the Minnesota Council of Nonprofits.
Fox will lead a discussion Wednesday in St. Cloud, Minn., about how a shutdown could affect nonprofits. The discussion starts at 2 p.m. in the Mississippi Room at Great River Regional Library.
State government would shut down after June 30 if Gov. Mark Dayton and legislators remain unable to reach agreement on the state’s next budget.
Nonprofits around the country have found both alarming and reassuring news as they have reviewed the list of 275,000 groups whose tax exemptions the Internal Revenue Service revoked on Wednesday. The IRS took action against charities that, it says, failed to file required paperwork for three consecutive years.
But the list is misleading in places, with some well-established groups listed that have, in fact, filed their paperwork.
East Stroudsburg University and its foundation must provide the Pocono Record with all of its donor records going back to 2000 — much more than the newspaper requested — a Commonwealth Court judge said Monday in clarifying a precedent-setting court ruling on the state's Right-to-Know law.
The case revolves around public access to records held by private entities, like the foundation, that carry out work on behalf of public agencies.