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...a statewide alliance of over 10,000 organizations that brings nonprofits together to advocate for the communities we serve.
 
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Latest News for Nonprofits

As we've written before, the tax plans being voted on in Washington DC are troubling.

We remain as worried as ever.

Both the House and Senate tax plans benefit wealthy individuals and corporations at the expense of middle- and low-income families, nonprofits, and the communities we serve.

California will be severely damaged if the bill passes.

Because the House and Senate passed bills that are not the same, they now need to work out these differences. So tax reform is not over yet. That means there is still time to act.

And if you think California votes don't count, think again.

Some Republicans may be willing to vote against this terrible bill. Already, three California Republican members of Congress voted against the bill in the House: Dana Rohrabacher (R-Costa Mesa), Darrell Issa (R-Vista), and Tom McClintock (R-Elk Grove). And our U.S. Senators can help raise the alarm on issues that may be more dangerous for senators in other parts of the country.

Because the timeline for a next vote is still not known, but could come up quickly, we urge you to contact your Congressmember and our two U.S. Senators now.

The simplest and best way is to telephone your Congressmember and Senators.

1. Call the Capitol switchboard (202-224-3121) and follow the prompts to be connected with the office where you want to leave a message. It will take about 2 minutes. To find out who your Congressmember is, click here and input your nonprofit’s (or your) zip code in the upper right corner.

2. Once connected, identify yourself as a someone who lives and/or works in their district.

3. Message: Choose an issue or issues you are most worried about, such as:

  • "The tax bill you are about to vote on would hurt me and my community. Please vote no on it."
  • "I volunteer for a nonprofit and the tax bill would greatly hurt their ability to serve seniors."
  • "Do not use tax reform to weaken or repeal the Johnson Amendment, which keeps divisive partisan politics out of nonprofits."
  • "Eliminating all tax-exempt bonds will make housing even less affordable in my community."
  • "Not allowing us to deduct state and local taxes from our federal taxes hurts all of us in California."

For more background on issues of concern, keep reading.

State and Local Taxes:

Both the Senate and House versions would repeal the deduction that allows taxpayers to write off state and local income tax they paid each year, as well as put a cap on the property tax deduction.

More than six million Californians take advantage of the state and local tax deduction each year, deducting an average of $18,438 per family, according to the nonpartisan Tax Policy Center.

The California Republicans who voted against the tax bill said that eliminating this tax break was not acceptable because it targets Californians, who pay relatively high state taxes. As Rep. Issa explained, “I didn’t come to Washington to raise taxes on my constituents and I do not plan to start today.”

House Version Threatens to Cripple Nonprofit Building Projects and Make Housing Even Less Affordable

The House bill would eliminate all tax-exempt private activity bonds, while the Senate bill keeps it. These bonds are used to finance more than half of the affordable units built each year, according to the National Council of State Housing Agencies.

Eliminating them would also hurt other nonprofits, including schools, hospitals and museums, who use these bonds to finance building and renovation projects.

The Johnson Amendment – Nonprofit Nonpartisanship

While the Senate tax bill preserves nonprofit nonpartisanship by leaving current law intact, the House version would weaken the existing law. More than 5,500 organizations nationwide, along with thousands of religious leaders, faith organizations, law enforcement, and the vast majority of the general public, oppose weakening the Johnson Amendment.

Standard Deduction and Charitable

Giving Both the House and Senate versions of the tax bill would increase the standard deduction, resulting in only 5% of taxpayers (currently 30%) itemizing and therefore able to take advantage of the charitable deduction. If enacted, the charitable deduction would be out of reach for 95% of taxpayers.

You can see a detailed comparison of the House and Senate bills here.

This is likely our last chance to have a say on tax reform. Please don’t wait to register your concern.

Click here to find your Congressmember

Debt LogoThe newly formed California State Assembly Select Committee on the Nonprofit Sector will be holding a public hearing on Tuesday, December 5, in Los Angeles. Led by Assemblymember Monique Limón (Santa Barbara), the Committee will investigate how student debt affects the nonprofit workforce, and what nonprofits are doing to address the debt crisis for all Californians.

The formation of the Assembly Select Committee is a milestone in the growing recognition by the Legislature that the nonprofit community is an important economic player as well as a cornerstone of California values and quality of life. CalNonprofits has been honored to work closely with the Committee’s leadership in its formation and ongoing work. In California, 54% of all college graduates have outstanding college debt, including approximately 160,000 Californians employed by nonprofit organizations. Student debt is of keen interest to the nonprofit community:

  • Student debt makes it harder for nonprofits to recruit and retain qualified staff, particularly those who are first-generation graduates, people of color, immigrants, and people from low wealth families
  • Many employees and leaders of nonprofits are unfamiliar with the Public Loan Service Forgiveness Program which can benefit employees of all 501(c)(3) nonprofits
  • Nonprofits are important in raising scholarship funds to make college affordable for those our society most needs to support

The Assembly Select Committee has closely followed the many bills in the California legislature addressing student concerns, and is interested in learning more about philanthropic-nonprofit-government-business partnerships that address college affordability in general, and the nonprofit workforce in specific. Join us for the hearing: Tuesday, December 5, 2017 from 10 am to 12pm  Center for Healthy Communities: 1000 N Alameda, Los Angeles (free parking behind the building). Space is limited, but the public is invited to attend. CalNonprofits CEO Jan Masaoka and Board Chair Geoff Green are among the scheduled speakers.

Learn more about the Nonprofit Student Debt Project!

Tax Reform FireA controlled burn is good for a forest. It clears out dry brush, reduces fire hazard, and encourages a diverse, healthy ecosystem for animals and trees. In contrast, a wildfire – well, ask the people in the wine country counties: a wildfire is an unpredictable, raging force that can take lives, devastate homes and jobs, and leave land at more risk for erosion and flooding.

Our analysis of the proposed tax bill in Congress is that it's a wildfire coming straight at California – particularly California's middle class and disadvantaged communities. It must be stopped before it ravages our state.CalNonprofits’ recent survey about nonprofits adapting under Trump administration revealed that nonprofits are more worried about their communities and constituents than earlier this year. Both the House and Senate tax plans, which are scheduled to be taken up in the coming days, should make them even more worried.

The House and Senate tax plans benefit wealthy individuals and corporations at the expense of middle- and low-income families

While promising to streamline the tax code and reduce taxes for the middle class, both versions would shift resources away from low- and moderate-income people while giving major tax breaks to high-income people and wealthy corporations – dramatically increasing inequality in our communitiesSimilarly, even though both bills keep the charitable deduction, they move the deduction to where only wealthy donors would benefit from it. In fact, these proposals would restrict those who itemize deductions to only the wealthiest 5% of taxpayers, making it harder for 95% of taxpayers to make donations.

Bigger deficits mean deeper cuts to federal programs

The proposed tax plans would reduce tax dollars by the trillions, and potentially lead to dramatic increases in the deficit. That would put pressure on Congress to cut programsHand holding California that middle- and low-income families rely on, from highway repair, Medicaid, and housing to public education, medical research, and other services.For nonprofit organizations, cuts in federal programs mean cuts in contracts to nonprofits in human services, health, housing, the arts, and the environment. With one in every sixteen California jobs at a nonprofit, these cuts could translate to layoffs at nonprofits, fewer services to communities, and thousands more unemployed. California would also be disproportionately hurt by the tax bill. This New York Times article even quotes San Diego Republican Darrell Issa:  “I cannot endorse changes that may make the tremendous burden felt by California taxpayers even worse,” he said. “Tax reform should lower taxes for all taxpayers — regardless of where they live.”

Nonprofit nonpartisanship is being attacked under the guise of the House tax plan

The House Ways & Means Committee made a last-minute change to its tax bill that would weaken Johnson Amendment protections for all 501(c)(3) organizations by allowing them to engage in partisan electioneering.In effect, nonprofits – including churches and houses of worship – would be vulnerable to becoming pass-throughs for dark money by donors pressuring us to support particular candidates. People who support the work of nonprofits rely on us to use their donations to help our communities, not engage in electioneering. The nonpartisan Joint Committee on Taxation (JCT) estimates that the provision would cost the federal government $2.1 billion over just six years because donors would divert their currently nondeductible political campaign donations to churches and nonprofits in order to claim charitable tax deductions.

Take a closer look

CalNonprofits policy framework states, “We support government budget and fiscal policies that provide sufficient resources to equitably and adequately meet the needs of Californians.” The House and Senate tax proposals don’t meet this standard. While the bill has been in the House Ways & Means Committee, we have contacted our members in the districts of the four California House members who sit on that committee, encouraging them to call their Representatives and amend the bill to make it fairer.As the bill moves to the full House and Senate, every one of California's 55 members of Congress holds a crucial vote. We hope our elected officials will reconsider their plans, and pass a tax plan that helps, not harms, the general welfare of Californians.

How powerful is California’s nonprofit sector today? CalNonprofits commissioned this first-ever report to find out!
 
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How to Start a Nonprofit

Thinking of starting a nonprofit?
Find out what you need to know in our step-by-step guide! Want to hear a recording of a webinar with our CEO Jan Masaoka? Go here.

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Thursday, November 30 in Los Angeles
"Overhead and the Meaning of Life" keynote by Jan Masaoka
Western Conference on Tax Exempt Organizations, Loyola Law School
Register here
Tuesday, December 5, 10am to 12pm, in Los Angeles
California State Assembly Select Committee on the Nonprofit Sector hearing, on The Student Debt Crisis
Location: Center for Healthy Communities
Wednesday, December 6 WEBINAR
California Policy Forum on Federal Tax and the Budget Debate: Where Things Stand and Why It Matters to Our Sector
Register here

 

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