Summer is officially here and that means crunch time for Congress to figure out what to do with the infrastructure package, with only a few weeks left before the August recess. Here is an overview of the latest legislative issues affecting nonprofits during these challenging times:
Infrastructure Negotiations Update
President Biden and a bipartisan group, including Senators Rob Portman (R-OH), Joe Manchin (D-WV), Mitt Romney (R-UT), and Kyrsten Sinema (D-AZ), announced a roughly $1 trillion infrastructure deal on June 24 that would reauthorize the Surface Transportation Act that expires at the end of September and includes $579 billion in new spending over five years. While the plan omits most of the Administration’s tax increase proposals, it calls for investment toward reducing the tax gap. The agreement raised questions about the fate of the President’s other physical infrastructure and income inequality proposals, and the tax increases the President has proposed to pay for those proposals.
During the weekend, President Biden walked back remarks suggesting he would only support signing a bipartisan bill if a larger reconciliation package were also passed. On Sunday morning, several Republican senators said they accepted Biden’s clarification and indicated they trusted the President to stick to his word. The President’s previous qualifying of support for the infrastructure bill with passage of a follow-on human infrastructure bill caught Republican Senate negotiators off guard and threatened to derail the deal.
Movement on a reconciliation bill will require the House and Senate to agree to the same FY2022 budget resolution with reconciliation instructions. Senate Majority Leader Chuck Schumer (D-NY) said he hoped to hold Senate votes on both the infrastructure bill and the FY2022 budget resolution in July. That could leave the development of the reconciliation bill to the fall and potentially push enactment of the two-part legislation until later in the year. Approval of the budget resolution will unlock the reconciliation process to allow the “human infrastructure” and climate bill to pass the Senate with 51 votes, maybe with the support only of 50 Democratic senators, plus Vice President Harris. House Speaker Nancy Pelosi (D-CA) has said her chamber won’t take up the bipartisan bill without Senate passage of the reconciliation bill.
Charitable Giving Data Released
On June 15, Giving USA released the Annual Report on Philanthropy for the Year 2020. According to the report, in 2020 total charitable giving grew 5.1% measured in current dollars over the revised total of $448.66 billion contributed in 2019. Adjusted for inflation, total giving increased 3.8%. It came in at 2.3% of Gross Domestic Product (GDP).
In addition to the Giving USA report, according to the Fundraising Effectiveness Project (FEP), giving during the first quarter of 2021 increased by 6% compared to first quarter of 2020. Even more notable, there was a 10% rise in donors during Q1, a record level for first quarter numbers during the 10 years of FEP data. Data from the report also shows that the increases in giving do not apply equally to all organizations. Giving to Human Services and Religious organizations increased, while contributions were down for all other types of charities.
Bill to Alter Donor Advised Fund and Private Foundation Rules Introduced in the Senate
On June 9, Senators Chuck Grassley (R-IA) and Angus King (I-ME) introduced 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 of the bill 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.
Independent Sector, along with other partner organizations, sent a letter to all members of Congress raising concerns about the legislative proposal. Independent Sector has also published a summary of the ACE Act, including key context and questions for consideration and wants to hear feedback from the nonprofit sector about the ACE Act.
Nonprofit Postal Rates Set to Increase
On May 28, 2021, the United States Postal Service (USPS) announced and filed with the with the Postal Regulatory Commission (PRC) its decision to use all the new above-inflation rate increase authority. The average increase will be 6.9%, effective August 29, 2021. This follows the previous rate increase implemented on January 24, 2021 for an average of 1.8%.
According to the Alliance of Nonprofit Mailers, every category of nonprofit marketing mail, except letters, is going up much more than the average increase of 6.9% for all mail. Nonprofit marketing mail also is increasing more than commercial marketing mail on average – 7.8% versus 6.7%. This increase will hit nonprofits hard, especially when their budget and services have already been affected by the impact of the COVID-19 pandemic. Nonprofit and social organizations rely on the USPS to communicate with their communities, donors, and potential donors.
An Update on Nonprofit Job Loss
According to the latest report from The Center for Civil Society Studies (CCSS) at Johns Hopkins University, May saw a sizable gain of more than 63,000 nonprofit jobs compared to April 2021’s total, representing a gain of nearly 8% of the 796,000 jobs still lost as of April this year.
Despite this recent growth, as of May 2021 the nonprofit workforce still remained down by over three-quarters of a million jobs, compared to its estimated pre-pandemic level. These lost jobs include 24% of all workers in nonprofit arts and entertainment organizations; 11% of those in education; 9% in religious, grantmaking, and civic associations; 5.5% in nonprofit social service institutions; and 3.3% in health care.
Nonprofits Step Up to Boost U.S. Vaccination Rates
The We Can Do This vaccination campaign, a month-long effort by The White House, and supported by Independent Sector, to increase rates of at least one shot for 70% for adults, ends on the Fourth of July. While the number of partially vaccinated adults in the United States has increased to 167.1 million as of June 16, which is 65% of people age 18 and older, more than 600,000 individuals in the country have died because of COVID-19. Also, at least 33 million people, or one in 10 individuals in the country, have tested positive. Independent Sector thanks all of our members – the YMCA of the USA, UnidosUS, United Way Worldwide, and Interfaith Youth Core to name a few – who are working together to increase vaccination rates and close vaccination disparities among Black and Brown communities.