Latest News for Nonprofits

September 10, 2021

TO: The California Congressional Delegation
FROM: California Association of Nonprofits
RE: Support for the Accelerating Charitable Efforts (ACE) Act


Dear Members of the California Congressional Delegation:

On behalf of the California Association of Nonprofits (CalNonprofits), I am writing to express support for the Accelerating Charitable Efforts (ACE) Act introduced in June by Senators Angus King (I-ME) and Chuck Grassley (R-IA) and to ask you to support this important legislation. The ACE Act will strengthen America’s nonprofit organizations, and the communities we serve, by restoring the connection between charitable tax benefits and benefits to charities.

CalNonprofits, a statewide policy alliance of more than 10,000 organizations, is the voice for California’s nonprofit community. Through our advocacy, we protect and enhance the ability of California nonprofits to serve our local communities, our state, the nation, and the world. We advocate for sufficient public investment in our communities, and because private philanthropy is also an important funding source for nonprofits, we support efforts to bring greater accountability to charitable donation utilization and greater transparency to philanthropy overall.

The events of the past 18 months reinforce the important role that nonprofit organizations play in providing services to our communities, from serving food to the hungry to providing clothing and shelter for Americans in need. Recent events also reinforce that current charitable giving laws impede the flow of resources to nonprofits, and steps must be taken to increase that flow, especially at a time when our services and programs are most needed.

Current law allows donors to receive an upfront tax benefit for their charitable contributions, yet when funds are donated to vehicles such as donor-advised funds (DAFs), they can accumulate indefinitely without being distributed to charities. In other words, state and federal coffers experience significant losses as a result of these tax benefits, without the guarantee of comparable benefits to society of having the donated funds go to support charitable goals.

California, for example, loses more than $340 million each year because of tax deductions given related to DAF donations alone. Meanwhile, nationwide more than $1 trillion sits in private foundations and $140 billion in DAFs, rather than being used to support working charities. A recent study of 2,600 DAFs at Michigan community foundations found that, in 2020, 35 percent of the DAFs made no distribution of funds, and 22 percent donated less than 5 percent of their assets.

At the same time, many of our nation’s charities are facing financial hardship. One report showed that more than one-third of nonprofits nationwide are in jeopardy of closing within two years. The nonprofit workforce remains deeply affected by the pandemic. National nonprofit employment data show that as of June 2021, the sector is still down 682,000 jobs, which in turn affects local economies and reduces access to services.

In California, there are more than 92,000 active nonprofits. Nonprofits affect the lives of every Californian every day; we are key economic drivers, service providers, and employers in the state. The nonprofit sector is the fourth largest employer by industry, employing more than 1.2 million Californians. Nonprofit economic activity generates about 15 percent, or one-sixth, of California’s Gross State Product. Nonprofits mobilize volunteers who contribute the equivalent of 331,000 full-time jobs in service to communities. When California’s nonprofit sector is strong, so are our communities. (For additional information about California’s nonprofit community, see our 2019 Causes Count publication.)

As California’s leading nonprofit policy alliance, we support the ACE Act because the reforms it offers go a long way to addressing the mismatch between the public cost of upfront tax deductions for donations and the often-delayed public benefit, when donations sit indefinitely in philanthropic vehicles such as DAFs. Nonprofits need resources now more than ever; this bill will help free up resources currently held in philanthropic institutions and get more funds to nonprofits more quickly. For these reasons, CalNonprofits respectfully urges you and your colleagues to co-sponsor this important legislation. Thank you for your consideration.

Sincerely,

signature of Jan Masaoka

Jan Masaoka, CEO, California Association of Nonprofits

 

Nonprofit Student Debt Project graphic

Today, through next Friday 9/24, you can share your thoughts about the Public Service Loan Forgiveness Program (PSLF) with federal government officials!

Click here to share your comments.

As California nonprofit folks know, PSLF was created to alleviate the burden of student debt for dedicated public service workers, including nonprofit staff. The idea was simple: work in public service for 10 years and have your remaining student debt forgiven. Unfortunately, the program has been plagued by problems and abuse at every turn.

Now, for the first time ever, the U.S. Department of Education (DOE) is asking for public comments about PSLF. This is a unique opportunity to share your experiences with PSLF and to tell President Biden and DOE Secretary Cardona that the program is broken:

  • 98% of PSLF applicants have been denied loan forgiveness
  • The backlog of PSLF applications is causing borrowers delays and uncertainty
  • Abuse by loan companies has left thousands of borrowers deeper in debt

We believe PSLF should live up to its promise and eliminate debt for all public service workers who have completed 10 years of service to their communities.

CalNonprofits supports policies that protect student loan borrowers because we know that student debt affects nonprofits; many nonprofit employees carry significant student debt. In fact, more than 160,000 nonprofit staff in California have student debt. Student debt makes it harder for nonprofits to recruit and retain top staff, especially women, people of color, and first-generation college graduates.

Through our Nonprofit Student Debt Project, we educate nonprofit employers, staff, and others about this issue, advocate for better policies at state and federal levels, and engage the nonprofit community in speaking up about this problem and ways to fix it.

You can speak up now about PSLF!

In addition to sharing this opportunity with you, CalNonprofits:

  • Signed onto a letter to DOE Secretary Cardona asking him to take administrative action to ensure that all public service workers with a decade of service receive the debt relief they were promised and to make any changes to PSLF retroactive so all public service workers can benefit.
  • Supported California Assembly Bill 424 (Stone), which will help protect student loan borrowers with private loans. This important bill is now on Governor Newsom’s desk; we urge him to sign it into law!
  • Supported California Assembly Bill 376 (Stone), the Student Borrower Bill of Rights, which became California law last year.

CalNonprofits will continue to advocate for improvements to student debt policies at both the state and federal levels. And we will also let you know of opportunities—like the current public comments for PSLF—for your voice to be heard on this issue.

If you have any questions about this work or any of our advocacy efforts on behalf of California nonprofits, please don’t hesitate to contact me at lucyc@calnonprofits.org.

P.S. If you have student debt, you should enroll in the PSLF program, despite its current problems. You can enroll here.

Share Your Public Comments Here   >

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September Events

See our California Relief Grant for Nonprofits Guide for upcoming grant webinars!

 


Save the date!

2021 Policy Convention will be November 16–18 (check out the impressive speakers and engaging sessions at last year's 3-day event).

Become a member!

CalNonprofits members strengthen our collective voice in Sacramento and with philanthropy, and the public. Members also get exclusive benefits like free webinars, health insurance for employees and liability insurance for organizations from CalNonprofits Insurance Services, a free subscription to the human resources library and a hotline from Mineral (formerly ThinkHR), and much more!

Find out more and join online today, or contact Karina Paredes-Arzola at karinap[at]calnonprofits[dot]org or 415.710.4332 for more information.

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CA Covid Relief Grant for Nonprofits Guide
Our guide to help nonprofit organizations access the CA Relief Grant for small businesses and nonprofits.
COVID-19 resources for California Nonprofits
In our efforts to support nonprofits and their staff, we have compiled this list of resources. More to come as we find them!

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Causes Count - New Findings is now available! Learn about the economic impact of California nonprofits, disparities within our sector, and our deep interdependency with government.
 
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our upcoming events
 
How to Apply for the California Relief Grant Program (Rounds 8 and 9)
Join us as we answer your questions about the program, and go through the application process with an emphasis on how nonprofits can fit into the application form. 

Monday, September 20 at 4pm (Pacific)
Register
Arts and culture organizations! You can register for arts-focused Rounds 8 and 9 webinars here, thanks to Californians for the Arts.

The Road Ahead: CalNonprofits Policy Convention
Save the date! This year's policy convention will continue to expand on the themes and conversations nonprofits need in order to advocate for ourselves and our communities.
Tuesday–Thursday, November 16–18 

More details and registration coming October 1!