I am working under the general guidance that it is okay to wish “Happy New Year” through the whole of January. So, just under the wire, Happy New Year! All of us here at Independent Sector are wishing you a year of mission success and personal satisfaction!
As I am sure many of you would agree, 2019 has gotten off to a rather surreal start. The 35-day shutdown is finally over, but the effects will be felt by federal workers and nonprofits for weeks or months to come. In fact, a good portion of 2019 will be spent cleaning up the mess that has been made, and trying to repair the damage to our organizations, the communities we support, and civil society at large.
As if that were not enough, the policy team and Independent Sector leadership see a number of other big challenges and opportunities, on the horizon. Speaking of “dealing with the mess,” we are still hard at work trying to address the consequences of 2017 tax reform on our sector. Most immediately, we continue to work with partners across the sector to repeal the two provisions on unrelated business income tax (UBIT) that are siphoning much needed resources away for organizational missions and diverting them to pay for new taxes on nonprofits. We just released research last week that helps demonstrate the magnitude of the financial burden of these UBIT provisions and will help sharpen our advocacy efforts to repeal them.
Like most organizations in the sector, we are also looking to the data to gain greater clarity on how giving patterns in the U.S. may be changing as a result of tax reform. We remain deeply concerned that the findings of 2017 study with Indiana University (and other studies since) indicating a steep decline in giving will hold true over the long term. We think it is unlikely that we will have a clear picture of the new “steady state” of charitable giving until into next year at the earliest. We do have a higher level of confidence that tax reform is putting downward pressure on a trend we have seen over the last decade or more – namely, the declining number of lower- and middle-income households making charitable gifts. This abiding concern about the impact of tax reform on both dollars and donors compels us to keep pushing on the sector and Congress to align around policy proposals, such as the universal charitable deduction, that could reverse these trends.
A number of legislators are preparing such policy proposals now, and we are commissioning some comparative research to help us better understand the merits of various proposals. As you may know, Congressmen Chris Smith (R-NJ) and Henry Cuellar (D-TX) have reintroduced their universal deduction legislation from last year, which we take as a very good sign.
We also have a new Congress, of course, and that presents a great opportunity for all of us. There are new relationships to cultivate across the House and Senate, and specifically with committees where we have clear interests like Senate Finance and House Ways and Means (both of which are operating under new leadership).
Working with our partners at Washington Council, Ernst & Young, the Independent Sector team is systematically working to build and reinforce those relationships with key committees, new members of the House and Senate, and members of Congress who are laying the groundwork for a 2020 presidential run. This is time-consuming but also deeply important work. So it is a key focus.
It’s a long and ambitious list, and we won’t accomplish much of it without you. We need and value our partnership with each of you. Thanks for being in the game with us – and thanks for returning to another year of Voices for Good.
