CalNonprofits Articles

You may have heard about a bill that passed the Assembly and is now in the State Senate that would change how nonprofits report non-cash donations (also called in-kind donations) AB 1181. As it currently stands, this bill would require nonprofits to report certain non-cash donations differently than we do now. This article describes an egregious example of the problem, typically involving donated pharmaceuticals that the corporate donor has restricted to use outside the U.S. The only donations affected by this bill are tangible goods that are restricted by the donor to be used outside the U.S.

What is NOT affected? 

It’s crucial to note that volunteer time reporting is not affected. And neither are donations that are unrestricted by the donor or are restricted to U.S. use. For example, if you receive donations of medical supplies or food kits, but the donor does not specify that the donations must be used outside the U.S. you are not affected by this bill.

What is CalNonprofits role?

Several of our members have contacted us about this bill, so we want to share with you what we’ve been doing. We have talked with the author and the Attorney General’s office to express the concerns of the nonprofit community and to suggest amendments. In addition, we brought accountants and auditors who work with nonprofits — and CalCPA and national AICPA — into the discussion, so they can provide additional perspectives.

We appreciate the intent of this legislation: to stop the fraudulent inflating of the value of donated pharmaceuticals that are sent overseas, where their market value is far, far below their U.S. market price. At the same time, we want to be sure that the bill affects only those nonprofits that typically behave in these ways, and does not put a chill on donations for international causes.

We are closely tracking developments, and continuing to listen to, and work with, stakeholders approaching the issue from all angles. Like any pending bill, it’s hard to keep track of what it covers and what it doesn’t as various amendments are added or removed, but rest assured we will keep you updated.

Updates on other bills in the legislature

As you know, we work on a variety of bills every year, some of which we watch to see how they develop, and others we take a more active role in supporting or opposing. Below are quick updates on two bills we are actively working on, and you can find information about other bills of interest to nonprofits on our online legislation tracker.

Donor Advised Funds: AB1712 has turned into a two-year bill, which means it will be considered again in January 2020. We continue to work with stakeholders including the author Buffy Wicks, foundations, and NextGen to move this bill forward.

Borrowers Bill of Rights: AB376 has passed out of the Assembly and awaits committee hearings in the Senate. We are proud to support this bill, which will provide needed protections for student debt borrowers.

For more information about other bills we are watching and working on, please check out our online legislation tracker.

Please feel free to contact Policy Director Nancy Berlin or our CEO Jan Masaoka with your questions and suggestions.

Thanks to support from our Members, CalNonprofits is able to advocate on behalf of all nonprofits in California. If you'd like to join the CalNonprofits community of Members, click here for more information.

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