Nonprofit 411: State-Sponsored 401k Plan for Massachusetts Nonprofits

Expanding Benefits as an Employee Retention Tool Just Got Easier

by State Treasurer Deborah B. GoldbergTreasurer Deborah B. Goldberg

One of every organization’s most valuable assets are the people who work there.  With more rapid changes brought about by the increased use of technology, and improvements in the national and local economies that translate into more competitive job markets, keeping your most talented employees has never been more challenging. Even within the nonprofit sector, it is critical to offer employees compelling benefits to remain and work for the causes they care about. This environment means your organization should do more, and we have a tool that can help.

The Massachusetts CORE Plan (CORE Plan) is a state-sponsored 401(k) retirement plan designed especially for small Massachusetts nonprofit organizations.  As CORE Plan Sponsor, the Office of The State Treasurer assumes a number of administrative and investment responsibilities on behalf of participating employers and their participating employees.  The CORE Plan is a Multiple Employer Plan, which allows us to combine Plan assets between your organization and other organizations across the state, bringing down the costs of offering a full-featured 401(k). The CORE Plan leverages the expertise and best practices used today in many large retirement plans while striving to keep costs low for employers and employees. Nonprofit organizations based and chartered in Massachusetts and employing 20 or fewer staff may adopt the CORE Plan.

Your employees likely know how important it is to save for retirement, but opening an IRA and remembering to contribute, or making sure enough is being contributed, is not always as easy as it should be. The CORE Plan is designed to make it simple and straightforward to participate and see real savings add up.

Some of the key features of the CORE Plan include:

  • All of the employee benefit protections under ERISA.
  • Automatic enrollment, combined with auto-escalation of employee contributions, makes it easy for CORE Plan participants to start saving early and grow savings rates quickly.
  • Higher contribution limits versus an IRA and the potential for employer-matching contributions.
  • The investment structure of the CORE Plan is developed and monitored by an independent investment consultant acting as a fiduciary under ERISA.
  • Knowledgeable CORE Plan representatives available to explain Plan benefits to your employees.
  • Easy-to-read fee disclosures ensure that participants are aware of fees. There are no deferred sales charges or contractual obligations for CORE Plan participants.
  • A robust participant website experience includes individual retirement income projections based on each participant’s age, contribution rate, account balance, and investment allocation: www.ma-core.com.

For additional information regarding the CORE Plan employers may visit us at www.ma-core.com or contact us at 877-630-4015. Find out how you can join us in adding value to your employee benefits.

PS: If you are an employee at a small Massachusetts nonprofit and think your organization could benefit from adding the CORE Plan, please share this information with your executive staff or human resources department.

MNN Urges Representative Neal to Protect Johnson Amendment in Tax Reform Debate

Yesterday, MNN sent a letter to Representative Richard Neal of Massachusetts, expressing their opposition to Section 5201 in the House of Representatives version of the federal tax reform bill, a provision that would radically change the longstanding protection known as the Johnson Amendment.

Section 5201 would significantly weaken the Johnson Amendment, a section in the U.S. Tax Code that prohibits nonprofits from endorsing or raising money for political candidates.

The letter urges Representative Neal, who was recently appointed to the conference committee tasked with reconciling the House and Senate versions of the tax bill, to work with fellow conferees to ensure that the provision is stricken from any final version of the bill.

“Section 5201 of the House-passed tax bill is harmful and will politicize and weaken the charitable sector in fundamental and irreparable ways. In a time of division, the nonprofit sector is one of the few places where people can work together on our country’s most important challenges,” said Jim Klocke, CEO of MNN.

The full text of the letter can be found here.

MNN Statement on Senate Tax Proposal

On Saturday, the U.S. Senate passed its tax legislation.  Despite containing several provisions harmful to the nonprofit sector, it did not weaken or repeal the Johnson Amendment, an important part of the current tax code that keeps nonprofits free from partisan politics and focused on their missions.

The conference committee is expected to take very swift action on reconciling the House and Senate versions of tax legislation.  The House version includes language significantly weakening the Johnson Amendment—language that must not be included in the final bill.

MNN will continue to work to protect nonprofit independence, working with its 800 members, the entire Massachusetts nonprofit community, the National Council of Nonprofits, Independent Sector, and the Council on Foundations.

MNN Urges Senate to Vote Against Tax Cuts and Jobs Act

Today, the Massachusetts Nonprofit Network (MNN) sent letters to Senator Edward J. Markey and Senator Elizabeth Warren of Massachusetts, thanking them for their ongoing support of the nonprofit sector and urging them to vote against the Tax Cuts and Jobs Act scheduled for a vote in the Senate today.

“The tax legislation to be considered by the Senate includes significant changes to long-standing tax policies that will have a drastic effect on the Commonwealth’s nonprofit sector. These effects include reducing charitable giving by billions and imposing new and unfair taxes on the nonprofit sector,” said Jim Klocke, CEO of MNN.

Although the Senate bill does not contain a repeal of the Johnson Amendment like the House bill included, Klocke noted concerns held by many in the nonprofit sector that a repeal could be offered as an amendment, or could survive should the House and Senate tax bills end up in conference.

In opposing the Tax Cuts and Jobs Act, MNN joins opposition from both their member nonprofit organizations across the Commonwealth and from national groups including the National Council of Nonprofits, Independent Sector, and the Council on Foundations.

The full text of the letter can be found here.

Nonprofit 411: Driving Diverse, Desired Target-Audience Actions with Online Advertising

306ae18By Gail Snow Moraski, Principal and Digital Marketer, Results Communications and Research

Anyone who’s held a discussion with me about marketing and development activities knows I’m a huge fan of online advertising. Because search engine networks, such as Google AdWords, and social media platforms, such as Facebook, allow advertisers to execute campaigns where they only pay when a target-audience member clicks on a “pay-per-click” ad, advertising on the aforementioned networks/platforms can be quite cost-effective, particularly since you still get valuable, awareness-generating “impressions” for free!

Because many nonprofit organizations aren’t looking to receive compensation for their services, individuals charged with marketing and development activities may assume online advertising doesn’t make sense for them. It’s very reasonable to think that our “featured” marketing vehicle only makes sense for for-profit businesses looking to generate product and service sales. With the ideas shared below, I hope to shake up those preconceived notions and shed light on why I believe there is a role for online advertising in a nonprofit’s marketing and development toolbox.

Fundraising Application

As I’ve shared with nonprofit contacts, while the individuals who comprise their target audience may not be directly searching for the contact’s upcoming fundraising event(s), those individuals may still be searching on terms that have some relevancy to the  fundraising activity. For example, let’s say an organization holds an annual holiday high tea to support development goals. The organization would likely benefit from running search engine (“paid search”) ads targeted to women, aged 25+ and residing in relevant geographies, who are entering terms in a search engine which indicate they are trying to identify local, charitable, holiday events to attend with their girlfriends, sisters, moms, etc.

In addition to running paid search advertising to create event awareness and ticket sales among “searchers”, the organization should consider running display/image ads on a variety of social media platforms and/or search engine “display” networks, like Google AdWords Display. In lieu of presenting ads to individuals based on their “search” behavior, social media and display networks offer the option to have ads presented to individuals who have certain interests, read about certain topics, or who visit certain Web sites (“placements”).

The type of targeting selected to promote an event may be very closely or very loosely tied to its nature. For example, if an organization is selling tickets to a cooking class “fundraiser”, it would make great sense to target individuals who have an interest in or read articles about cooking, or who visit cooking Web sites. But, in the case of our high-tea fundraiser, there may not be an obvious “interest” or “topic” target to pursue, and targeting may simply consist of having ads presented to women who meet an organization’s geography requirements and who visit Web sites known to have large female readerships.

The above scenario should apply as well to causing individuals to make donations. Presenting ads to audiences whose demographics and interests make them good donation targets should serve to create awareness or reminders of your organization, and therefore, support donation-making.

Driving Non-Monetary Actions

Online advertising can also be used to cause target audiences to take important non-monetary actions. For example, display/image ads presented to appropriate individuals can cause a note-worthy percentage to click to “sign up for a weekly e-blast,” “learn more about volunteering” or “complete our survey to help us serve our constituents better.”

When putting together your marketing and communications plan for a campaign – whether its purpose be to grow funds, volunteers, e-communication sign-ups, or awareness – be sure to give ample thought to what campaign objectives might be achieved if you included online advertising as a tactic, and the opportunities that might be lost if you forego this cost-effective tactic.

Free Webinar on Mon., 11/27: What Tax Reform Will Mean for Nonprofits

The House and Senate are racing to enact comprehensive tax reform in time to place a bill on the President’s desk by Christmas. The House passed its own bill on November 16 and the Senate plans to pass its version by December 1, giving them time to work out the many differences and enact the first comprehensive reform of the tax code since 1986. The Senate will likely start deliberations on this bill as early as the Monday after  Thanksgiving.

MNN is joining with its colleague organizations across the country, including the National Council of Nonprofits, in promoting a free national webinar on Monday, November 27, 2017, from 4:00 to 5:15pm.

On the webinar, participants will hear from nationally prominent speakers who are involved in the intricate details of the tax policy proposals, are directly engaged in the policy debates, and can speak to effective advocacy strategies. They will also hear from nonprofit leaders active in the states at the grassroots level who will provide real-world examples of the impact of the proposals. Most importantly, they will get their questions answered and learn what they can do to help improve the legislation on behalf of the people nonprofits serve.

Click here to register for the webinar.

MNN Urges House Members to Vote Against Tax Cuts and Jobs Act

Today, MNN sent letters to the entire Massachusetts congressional delegation urging them to vote against the Tax Cuts and Jobs Act (H.R. 1).

“As drafted, this bill will reduce charitable giving, eliminate a long-standing law prohibiting charities from engaging in partisan politics, and will impose new taxes on the sector,” said Jim Klocke, CEO of MNN. “This bill will have a devastating impact on the Commonwealth’s nonprofit community and the people and causes they serve.”

In calling for the Massachusetts congressional delegation to oppose H.R. 1, MNN joins a growing chorus of opposition to the House bill, including the National Council of Nonprofits, Independent Sector, and the Council on Foundations.

The full text of the letter can be found here.

New MNN Report Features Fundraising Advice “From the Experts” to Aid Nonprofits

Today the Massachusetts Nonprofit Network (MNN) released the latest edition of its Commonwealth Insights report series. The report, entitled “From the Experts: Advice to Inform Your Organization’s Fundraising,” features advice from interviews with four successful Massachusetts nonprofit fundraisers in an effort to inform and support year-end fundraising efforts of nonprofit organizations.

CI-November2017-thumbnail

Click on the image to read the full report.

In an early 2017 survey of its membership, nearly 60% of MNN member nonprofits cited fundraising as the largest challenge facing their organization. With many nonprofits currently accelerating their fundraising operations to coincide with the end of the calendar year, MNN believes this report will be useful to its over 700 nonprofit members representing every region of the state, as well as members of the state’s nonprofit sector at large.

“Fundraising is an ever-present challenge-and opportunity-for all types of nonprofits. This edition of Commonwealth Insights focuses on ideas that can help nonprofits take their fundraising to new heights.” said Jim Klocke, CEO of the Massachusetts Nonprofit Network.

The report is centered on general strategies for fundraisers to consider in their efforts and is supplemented with actionable advice. In a fast-paced and changing fundraising landscape, all four experts agreed that the need to consistently engage donors and provide them with new, creative ways to be involved with a nonprofit organization is critical to building and retaining support.

The report also touches upon a concern of those working in fundraising, particularly at smaller organizations, that current events and overwhelming needs from across the country and world could further heighten the competition for donors’ support. The interviewed experts agreed that while this concern is understandable, donors of all ages are looking for even more ways to support causes they care about.

“I think that many people are looking for more ways to make a difference, and I think that is what we need right now,” says Margaret Keller, Executive Director of Community Access to the Arts in Great Barrington, MA, one of the experts featured in the report. “Donors are more engaged and more committed than ever.”

This is the third edition of Commonwealth Insights MNN has published in 2017. Earlier editions focused on federal tax reform and the Earned Income Tax Credit. The Commonwealth Insights series is made possible by support from the Barr Foundation. Past editions of Commonwealth Insights can be found at www.massnonprofitnet.org/commonwealthinsights.

Update on Federal Tax Reform – November 14, 2017

On November 9th, the House tax bill was approved on a party-line basis by the Ways and Means Committee. On the last day of the House Ways and Means Committee markup,  Chairman Brady offered a “manager’s amendment” that dramatically expanded the anti-Johnson Amendment provision. As amended, the new harmful Johnson Amendment language, Section 5201, will politicize the 501(c)(3) community by allowing charitable nonprofits, houses of worship, and foundations to engage in partisan electioneering for or against candidates, as long as doing so occurs “in the ordinary course of the organization’s regular and customary activities in carrying out its exempt purpose,” and the organization incurs no more than “de minimis” incremental expenses. The provision would be effective from 2019 through 2023, and is estimated to cost. In addition, 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 political churches and charitable nonprofits in order to claim charitable tax deductions. This legislation is expected to come to the House floor by Thursday with a “closed rule,” meaning that no amendments will be allowed and Representatives will only be able to vote for or against the Committee version of the bill. 

Also on November 9th, the Senate released its tax bill with the Finance Committee’s deliberation set to begin today. Similar to the House Ways and Means bill, significant changes to the bill in the Finance Committee are not likely. Committee members were informed late last week that amendments would be rejected unless they were cost neutral or contained offsetting revenue raisers, and were accompanied by a cost estimate from the Joint Committee on Taxation. Those restrictions have no dissuaded Senators from drafting more than 300 amendments. Senator Stabenow (D-MI) and Ranking Member Wyden (D-OR) have prepared an amendment for Committee consideration that would create a universal deduction that would allow all Americans who take the standard deduction to also claim a deduction of up to 60 percent of their adjusted gross income (AGI).

Other filed amendments to the Senate tax bill include one to incorporate the CHARITY Act, several to make the work and economic development tax credits permanent, and a proposal to permit charitable deductions from estates for donations to non-charitable nonprofits, including 501(c)(4) social welfare organizations, (c)(5) labor unions, and (c)(6) trade associations. Once the Committee completes its work this week, the Senate version will go to the Senate floor under an expedited procedure known as “reconciliation”. This will limit debate and permit passage by a simple majority rather than the usual 60 votes needed to overcome a filibuster. It is expected that the full Senate will vote on the bill after the Thanksgiving holiday.

With a few notable exceptions, both the House and Senate tax bills are closely aligned to the Tax Reform Framework negotiated by Republican congressional leaders and White House officials. Each bill adds to the federal deficit by $1.5 trillion over 10 years by lowering individual and corporate tax rates, and nearly doubling the standard deduction while repealing most deductions and exemptions. Neither bill includes a universal deduction. Both bills would immediately double the exemptions under the estate tax to exclude estates valued at less than $11 million for an individual and $22 million for couples; the House bill goes farther and repeals the estate tax after 2024. The drafts in the House and Senate both turn to the nonprofit community for new revenue, proposing to impose excise taxes on some nonprofit college and university endowments as well as on salaries of higher-paid employees of nonprofits.

Unlike the House version, the Senate bill does not currently include language weakening the Johnson Amendment, streamlining the private foundation excise tax, nor a provision eliminating private activity bonds upon which many nonprofits rely for capital financing. The Senate bill does include several new provisions that could be problematic for charitable nonprofits, including new unrelated business income taxes (UBIT) and rules on intermediate sanctions. Thanks to the diligent work of our colleagues at the National Council of Nonprofits, click here for a detailed and helpful comparison of the House and Senate tax bills.

MNN Testifies on Employer Health Care Assistance Contributions

On November 13, 2017, MNN’s CEO Jim Klocke testified to the Division of Unemployment Assistance (DUA) on the Employer Medical Assistance Contribution supplement (EMAC supplement) draft regulations. The testimony raised our key concerns and included three recommendations:

  • The EMAC supplement draft regulations should only apply to employees who have been employed with an employer for at least two quarters.  In essence, this would create a waiting period before the assessment is applied, recognizing that many employers have high turnover rates. It would also keep the EMAC supplement from being overly complicated to administer.
  • The employer liability for the EMAC supplement draft regulations, which is currently set at 14 days, should be extended to 8 weeks. By only applying the assessment to employees who are on MassHealth or ConnectorCare for at least 8 weeks, this will avoid employers being unfairly assessed for very short-term stays on those programs
  • Third, many employers in the nonprofit sector employ very part-time employees to run various programs, assist elderly clients, and work as non-medical home health care aids, just to name a few. Many times these employees have multiple employers and their typical weekly hours per employer can be as low as 2 to 4 hours per week. Employer liability for the EMAC supplement for these particular employment situations should be given special consideration

Click here to view the testimony and here for additional information about this new employer assessment.

At the time of this writing, DUA has scheduled four additional listening sessions in Springfield, Worcester, Lawrence, and West Barnstable. In addition, DUA will be collecting comments electronically at EMACSupplement@massmail.state.ma.us. We encourage all nonprofits who will be impacted by the new EMAC supplement to submit comments to DUA or attend one of the listening sessions. If you have questions, contact Director of Government Affairs Tonja Mettlach anytime.