Massachusetts Nonprofits Feel Squeezed by the Federal Government Shutdown

Nonprofits and those they serve are being impacted by the federal government shutdown, and many more may be affected if the shutdown continues, according to a survey conducted by the Massachusetts Nonprofit Network (MNN).

“The results of the survey speak to the incredible strain on nonprofits caused by the uncertainty of federal funding and increased demand for services,” said Jim Klocke, CEO of MNN. “Many organizations are on the front lines serving furloughed federal employees and others who are impacted by the shutdown.”

Among the specific impacts cited by nonprofits include:

  • disruptions in current funding streams, including delays in current grant programs, uncertainty around entitlement funding, and little to no federal technical assistance on grant and program administration;
  • delays in current or upcoming grant cycles, including uncertainty around the status of completed applications and planned projects;
  • lapses in federal approvals needed to carry out local projects and activities;
  • a reduced ability to carry out daily operations while facing an increased demand for services.

Erin McAleer, President of Boston-based nonprofit Project Bread, said, “Our clients—SNAP recipients—are confused and anxious. We are hearing from more people who need help accessing food, including furloughed federal employees. Mitigating the impact of the shutdown is our top priority, but as a nonprofit, the attention the shutdown demands is consuming significant resources and staff time across our entire organization.”

“The results from the survey make it clear that the shutdown must end,” said Klocke. “MNN recognizes the heightened need caused by the shutdown and will continue to serve the nonprofit sector during this critical time.”

MNN Releases 2019 Public Policy Agenda

Today MNN released its 2019 Public Policy Agenda that outlines the organization’s policy and advocacy priorities for the year. The agenda focuses on the following three goals important to the entire nonprofit sector:

1. Helping the people served by nonprofits.

Specifically, MNN supports: ensuring a complete count for the 2020 Census; reducing and eliminating “cliff effects,” which can force people served by nonprofits to choose between income growth and the loss of vital services; and expanding nonpartisan efforts to promote democracy, civic participation, and voting.

2. Strengthening nonprofits’ ability to serve people and communities.

Specifically, MNN supports: matching reporting requirements to the size of nonprofits, including the elimination of duplicative requirements placed upon small nonprofits; improving state policies that affect nonprofits as employers, including the new paid family leave policy and the employer medical assistance contribution; and enhancing the sustainability of state funding through long-term funding continuity and full and timely payment for services, including indirect and administrative costs.

3. Ensuring fair tax policy and supporting accountability.

Specifically, MNN supports: protecting the nonprofit tax-exempt status and educating decision-makers on the community benefits that nonprofits provide; improving the federal charitable tax deduction and re-establishing the state charitable deduction; and preserving the integrity of the sector by promoting best practices for nonprofit fiscal management.

To read the full 2019 Public Policy Agenda, click here.

MNN thanks its members for their expertise and support. MNN looks forward to continuing to represent the sector to decision makers at all levels of government, working collaboratively with its members and the broader nonprofit community.

Policymaker Roundtable on Cape Cod: Nov. 29, 2018

IMG_1738 (1)On Thursday, November 29, MNN co-hosted the third Policymaker Roundtable event of the year with Cotuit Center for the Arts and The Cape Cod Foundation. The Roundtable featured Jay Coburn, Chief Executive Officer of Community Development Partnership; Andrew Gottlieb, Executive Director of the Association for the Preservation of Cape Cod and a member of the Mashpee Board of Selectmen; and Pat Johnson, Chief of Staff for State Senator Julian Cyr. The event was held at the Cultural Center of Cape Cod.

Coburn, Gottlieb, and Johnson offered their advice on how nonprofits can best approach their relationship-building with legislators and other public policy makers. “Provide clear information and never assume with any legislator what their priorities might be,” said Johnson. “Nonprofits should figure out how to present their issue in a way that shows why its important and provides solutions,” added Gottlieb.

The panel further explored the relationship between nonprofits and advocacy work, and pointed out that nonprofits may already have the tools to start engaging with lawmakers on public policy issues that impact the communities they serve. Jay Coburn used development as an example: “As with a donor, a ‘no’ doesn’t necessarily mean ‘no.’ It might mean, ‘not right now.’ It’s the same with legislators,” said Coburn.

MNN thanks Coburn, Gottlieb and Johnson for their insights into the role of nonprofits in public policy advocacy.

Stay tuned to MNN for announcements around upcoming Policymaker Roundtable events in the coming year.

Three Year Energy Efficiency Plan Favorable to Nonprofits

Cynthia Arcate, President and CEO of PowerOptions, represents MNN on the Energy Efficiency Advisory Council. Over the last several months, Cynthia has provided crucial input on the development of the 2019-2021 Three-Year Energy Efficiency Plans. She has advocated for the interests of Massachusetts nonprofits, and believes that the final plans represent a step forward to achieving greater energy efficiency for nonprofits statewide.

As a result, she voted to support the 2019-2021 Three-Year Energy Efficiency Plans that were filed at the Department of Public Utilities on October 31. The plans represent an evolution of Massachusetts’ energy efficiency programs and are intended to deliver deeper savings from new initiatives, especially for traditionally under-served populations, such as nonprofits.

When the Program Administrators filed their original plans back in April, Cynthia was concerned that they were not aggressive enough and would not continue Massachusetts’ nation-leading investment. However, through significant negotiation between the Program Administrators, the Energy Efficiency Advisory Council, and numerous outside stakeholders, all of whom contributed to the final, innovative plans, Cynthia is now eager for the plans to be approved and operational.

The energy efficiency plans have a budget of nearly $2.8 billion over the three years, with expected benefits of over $8.5 billion. This represents a savings of 2.70% and 1.25% of retail sales for the electric and gas programs, respectively. The gas savings are the largest in the program’s history.

Program Administrators have committed to addressing barriers that inhibit participation in the energy efficiency programs by traditionally under-served populations, such as small businesses and nonprofits. PowerOptions looks forward to helping the Program Administrators address the nonprofit barriers.

Now that the plans have been filed at the Department of Public Utilities, they must be ruled on by December 31, in order to take effect on January 1, 2019.

IRS Seeks to Block SALT Workaround, Could Impact Other Tax Credit-Backed Charitable Donation

In late August, the U.S. Treasury and the IRS released draft regulations in response to states (Connecticut, New York, and New Jersey) that had enacted “State and Local Tax (SALT) workarounds”. While each of these states had crafted slightly different proposals, all were designed to minimize the impact of the $10,000 SALT cap included in the federal tax reform bill. The SALT cap will have a disparate impact in states with high property taxes.
While these draft regulations were expected, their scope appears to be broader and could apply to some programs in states that provide a state or local tax credit when a taxpayer makes a donation to certain nonprofits. The proposed regulations would require taxpayers to treat the value of tax credits like other benefits received when making a charitable donation. The regulations will not apply to dollar-for-dollar state tax deductions for donations to charitable nonprofits, nor to programs that generate a tax credit of 15% or less.
According the National Council of Nonprofits, there are at least ten different types of state tax credit programs that could be impacted: Affordable Housing (2 states); Charitable Organizations (13 states); Conservation/Preservation (14 states); Economic Development (7 states) Education/Scholarships (18 states per GAO, below); Endowments (5 states); Food Banks (7 states); Historic Preservation (3 states); SALT Workaround (3 states); and Schools (8 states). MNN is looking into how (if at all) these regulations could impact Massachusetts tax credit programs, while recognizing that these are draft regulations and their impact on older tax credit programs will likely still need to be resolved.
If you know about a tax credit program that could be impacted, please reach out to Tonja Mettlach, Director of Government Affairs.

MNN Opposes Plan to Tax Massachusetts Colleges and Universities: “It’s Bad for Massachusetts”

BOSTON, MA – Today the Massachusetts Nonprofit Network (MNN) declared its opposition to a proposal to levy a tax on the endowments of colleges and universities in Massachusetts.

“It’s a bad idea–for Massachusetts, and for everyone served by nonprofits in Massachusetts,” said Jim Klocke, CEO of MNN.

Nonprofits are a critical economic engine for Massachusetts, providing 550,000 jobs and employing over 17% of the state’s workforce. The state’s more than 33,000 nonprofits are cornerstones of Massachusetts communities. The nonprofit sector enriches neighborhoods and provides vital services to the state’s most vulnerable residents.

From scholarships to local students, to free and subsidized health care, to a wide array of environmental, artistic, historic, and cultural programs, Massachusetts nonprofits make immense contributions that benefit residents and government alike. In addition to delivering vital services, they provide hundreds of millions of dollars of community benefits each year.

In addition to their economic contributions to the Commonwealth, nonprofits are mission driven organizations. They contribute to the public good, provide services that government would have to provide absent the nonprofit, and re-invest any revenue surplus back into their budgets to further their mission. As such, nonprofits are treated differently under federal and state laws, including receiving tax-exempt status.

Nonprofits are already bracing for the negative impact of the recently passed federal tax reform legislation. According to a 2017 MNN report, the doubling of the standard deduction will make it more expensive for middle-income donors to give to nonprofits, and could potentially result in a decline in giving in Massachusetts by as much as $513 million beginning next year.

MNN Submits Testimony on EMAC Hardship Waiver Regulations

Today the Massachusetts Nonprofit Network (MNN) submitted testimony on the temporary Employer Medical Assistance Contribution Supplement (EMAC) hardship waiver draft regulations. You can read the testimony here.

Last week, the Department of Unemployment Assistance released draft regulations relating to the EMAC Supplement hardship waiver. Read our September 13 blog post for key details that nonprofits should know.


MNN Endorses Question 3 Upholding Transgender Rights

MNN has endorsed Question 3, the transgender rights ballot question that will go before voters in November.  MNN will take part in the “Yes on 3” campaign which is led by a bipartisan coalition called Freedom for All Massachusetts.  As the association representing nonprofits throughout the Commonwealth, MNN is proud to be part of the Yes on 3 Campaign and help protect basic rights for our colleagues, neighbors, and friends.

What is Question 3?

In 2017, Massachusetts passed a law to protect transgender individuals from being discriminated against in public places. Opponents to this law responded by gathering enough signatures to place the law on the November 2018 ballot for voters’ review as Question 3.  A “Yes” vote on Question 3 will ensure that the 2017 state law remains in place and that the key protections secured will continue to protect transgender people in public places. Passage of Question 3 would make Massachusetts the first state in the country to uphold basic protections for transgender individuals at the ballot box.

Why is MNN getting involved?

Three key reasons drove MNN’s decision to support Question 3:

  1. Safeguarding rights – As underserved communities across the country face challenges to their rights, it is important that the nonprofit sector stand up to protect them. Protecting the marginalized, and making sure that all feel welcome in their community, are values that are common to the entire nonprofit sector.
  2. A signal to current and prospective employees – As employers, nonprofits need to ensure that all current and prospective transgender employees know they are welcome in the sector and that their rights will be protected by the sector.
  3. The need for public education – Because Question 3 is potentially confusing to voters, educating the public on the meaning of a “Yes” vote is important. MNN will use its communications and social media channels to educate members and the broader nonprofit community about Question 3 and help mitigate any potential confusion.

Where can I learn more?

  • See here for more information on the Yes on 3 Campaign, including fact sheets and resources.
  • See here for information on ballot question advocacy and 501(c)(3) organizations.

How do I get involved?

The Yes on 3 Campaign makes it easy for individuals, nonprofits, for-profits, and anyone else to get engaged. See here for additional information, including a category specifically for nonprofit and advocacy organizations.

In the weeks to come, leading up to the election on November 6th, MNN will share additional information, potential engagement opportunities, and any pertinent developments. In the meantime, reach out to Tonja Mettlach, Director of Government Affairs at MNN anytime.

Important Update on EMAC Supplement Hardship Waiver

At the end of the 2018 formal legislative session, MNN and others were successful in ensuring that an EMAC Supplement hardship waiver was included in the final FY2019 budget. The goal in advocating for this waiver was to provide some potential relief to nonprofits that have been severely impacted by the new EMAC Supplement assessment. You can read the statutory language authorizing the hardship waiver here (outside section 68).

Today, the Department of Unemployment Assistance (DUA) released draft regulations relating to the EMAC Supplement hardship waiver. The text of the regulations can be viewed here. Below are some key details:

  1. Any employer may submit a hardship waiver but special consideration will be given to: (1) employers with variable or limited revenue; (2) employers with less than 50 employees; (3) seasonal and temporary employers; and (4) employers serving the public interest, including those who receive a significant share of revenues from the government.
  2. To demonstrate a financial hardship, an employer must show that the hardship is due to the EMAC Supplement assessment; (2) that they acted in good faith in all relations with DUA; and (3) that failure to get a waiver approved would result in a termination of business or employees.
  3. A hardship waiver application only applies to the quarter for which it was filed. A waiver approval also only relieves the employer from EMAC Supplement liability for the quarter in which the waiver was granted.
  4. Approval will be discretionary and there will be no ability to appeal. The approval may result in a full or partial waiver of liability for an EMAC Supplement assessment for the quarter in which the waiver was filed.

Other important dates include:

  • October 1: Wage filing begins (3rd quarter) Hardship waiver applications accepted
  • October 12: Deadline for hardship waiver applications
  • October 31: wage filing completed (3rd quarter)
DUA will be holding listening sessions on these draft regulations to solicit input and feedback from the public. Two listening sessions are scheduled for next week:

MNN will continue to follow this issue closely. For any questions, contact Tonja Mettlach.

Employer Medical Assistance Contribution Supplement (EMAC Supplement) Reminder

Have you recently received an EMAC Supplement Liability Determination that you disagree with? Employment and wage detail reports and payments for Q2 were due to the Department of Unemployment Assistance on July 31. If you have received an assessment for an employee which you want to appeal, keep in mind that there are two different appeal processes:
  • DUA appeal: You can learn more about this appeal process here. There are limited reasons to appeal through DUA, including if you were assessed for an independent contractor, if you have less than 6 employees, if the submitted wages were not for UI purposes, or if an employee has not been on qualifying health care for a continuous period of 56 days.
  • MassHealth appeal: This appeal process is initiated by filling out the EMAC Employee Information Form. This is a separate appeal process and can be done separately or in conjunction with a DUA appeal. This form should be filled out by organizations that are appealing an assessment based on an employee being enrolled in an employer’s sponsored insurance plan, an employee not being a Massachusetts resident, and/or an employee having wages inconsistent with income eligibility. Any appeals for Q2 using the EMAC Employee Information Form must be submitted by August 30.
To learn more about the appeal process and helpful information to guide you through your appeal process, click here. If you want to learn more general information about the EMAC Supplement, click here. Reach out with questions or concerns to our Director of Government Affairs Tonja Mettlach.