The DC Download – June 2018

Want to stay up to date, but need the short version? We’ve got you covered! Here are the major federal policy updates from Washington, DC that may impact nonprofit work this month.

Public Service Loan Forgiveness (PSLF)

The Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act, HR 4508, sponsored by Rep. Virginia Foxx (R-NC), would eliminate the PSLF program for new borrowers moving forward – stripping away this benefit for students and the communities served by civil society. This bill could be brought to the House floor before August recess.

On the Senate side, Sen. Heidi Heitkamp (D-ND) has introduced the Help Encourage a Lifetime of Public Service (HELPS) Act, which builds on the current PSLF program by including shorter-term incentives, in addition to the elimination of student loan balances after 120-qualifying payments. The bill would waive the interest on an individual’s federal student loans for each year they are working in public service and expand PSLF to farmers and volunteer first responders.

Charitable Giving Data

New data released by the American Enterprise Institute (AEI) shows that the 2017 Tax Cuts and Jobs Act is expected to reduce charitable giving by $17.2 billion this year. This is due to approximately 27 million fewer taxpayers taking the charitable deduction, as a result of changes in the tax code. This is in line with research Independent Sector commissioned last year with the Indiana University Lilly Family School of Philanthropy. The report examines two policy proposal solutions – one of which we wrote about last month.

Unrelated Business Income Tax (UBIT)

Effective as of January 1, 2018 there are particular expenses that now trigger UBIT for nonprofits and are treated as income expense. Nonprofits now will be taxed for providing employee benefits, such as transit or parking – even if employees are paying for the benefits themselves through a pre-tax plan, or if organizations are legally required to provide the benefits. Discussions of postponing this provision by a year have occurred as they are considered “burdensome” for tax-exempt organizations. You can read IS’ submitted comments or submit your own.

Johnson Amendment

The House appropriations financial services bill includes a rider to weaken the Johnson Amendment by blocking enforcement for churches; however, the comparative Senate bill does not. It is unlikely that this rider will go anywhere without the support of the Senate; however, as always we highly recommend you reach out to your members of Congress.

Senate Paid Internships

This month, the Senate Appropriations Committee advanced language in the markup for the 2019 budget bill to include a $5 million allocation for compensating Senate interns. With unanimous bi-partisan support, all 33 committee members voted for the allocation. While the number of paid internships on the Hill have been increasing in recent years, the Senate and House of Representatives have only gradually jumped on board. In 2018, 51 percent of Senate Republicans and 32 percent of Senate Democrats, and just 8 percent of House Republicans and 4 percent of House Democrats, pay their interns. The intersection of internships and government goes back decades, originally created in 1935 when the D.C. based nonprofit, National Institute of Public Affairs, brought thirty students to the nation’s capital to “intern” by training them how to become the next generation of leaders. Local nonprofit Pay Our Interns has been working on this issue since 2016. Read their report.

Government Reorganization

Last week, the administration released plans to reorganize the federal government. The White House document proposes reducing the size of the government by eliminating and consolidating programs and departments – most notably, merging the Department of Education and Department of Labor into one Department of Education and the Workforce. The proposal also includes an elimination of public agencies, such as the Consumer Financial Protection Bureau and the Corporation for Public Broadcasting. Some of the proposed changes can be done via presidential orders; however, the majority of changes would require Congressional action. Based on the immediate responses to the reorganization plan, it appears unlikely any sizable changes will be made.


Types: Blog, Policy Update
Global Topics: Congress, Data, Public Policy, Voices for Good
Policy Issues: Charitable Deduction, Charitable Giving, Federal Budget & Fiscal Policy, IRS Oversight, Lobbying & Political Activity, Nonprofit Operations, Political Activity Rules, Tax & Fiscal Policy, UBIT