Roses are red, violets are blue, another government shutdown is adverted, so, what is new? If you’ve been too busy keeping up with the Olympics or trying to predict when winter will end, fear not. Here is an overview of the latest legislative issues affecting nonprofits:
Government Funding and Build Back Better Update
On February 17, the Senate passed a continuing resolution to keep the government funded through March 11, just one day before the deadline averting a government shutdown. The House approved the short-term spending measure last week. This was the last business item Congress took care of before heading out for recess until February 28.
Democrats remain divided on the specifics of the Build Back Better Act, and the appetite between the Administration and Congress is moving away from doing another COVID-19 related relief package. Meanwhile, important tax measures that expired at the end of last year need to be extended and the question remains about when that will happen. Democrats in Congress, facing a tough midterm election, are pushing for a tax cut package, while other Democrats are focused on limiting the federal deficit.
Bill to Alter Donor Advised Fund and Private Foundation Rules Introduced in the House
On February 3, Reps. Chellie Pingree (D-ME) and Tom Reed (R-NY) introduced the House version of the Accelerating Charitable Efforts (ACE) Act, which revises current laws dictating the pace and transparency of resources flowing from private foundations and donor advised funds.
Proponents argue that the policies in the bill increase transparency necessary to build public trust and improve the timely flow of existing resources to working charities. Opponents argue that philanthropic resources already flow to working charities at rates higher than those proposed in the bill, and changes may negatively impact the administrative flexibility needed to invest thoughtfully in communities. Sens. Angus King (I-ME) and Chuck Grassley (R-IA) introduced the Senate bill in 2021.
Senate Bill to Restore the Employee Retention Tax Credit Introduced
On February 11, Sens. Hassan (D-NH), Tim Scott (R-SC), Warner (D-VA), Capito (R-WV), and Cardin (D-MD) introduced the Senate version of the bill to restore the Employee Retention Tax Credit for the fourth quarter of 2021.
The introduction of the bill comes after 70 members of a business and nonprofit coalition sent a letter imploring the Biden Administration and Congress to restore the Employee Retention Tax Credit (ERTC). The letter notes that the now-prolonged recovery has stalled rehiring and casts a veil of financial uncertainty for employers.
The Employee Retention Tax Credit Reinstatement Act (H.R.6161) was introduced in the House by Reps. Carol Miller (R-WV), Kevin Hern (R-OK), Stephanie Murphy (D-FL), and Terri A. Sewell (D-AL) in December 2021. The bill now has 54 bipartisan co-sponsors.
Nonprofit Organizations Need Pandemic Relief
On February 15, a coalition of more than 60 national charitable nonprofits sent a letter to President Joe Biden and Congressional leaders, urging them to advance policy priorities that will help charitable organizations overcome the unique challenges they face, while serving their communities through one of our nation’s most challenging public health and economic crises. The letter highlights the need to expand and extend the temporary $300 charitable giving deduction that expired at the end of last year, as well as the need for measures that help combat the staff shortages like the reinstatement of the employee retention tax credit.