Heading into 2020: 3 Tax Law Updates that Impact Nonprofits

by Danielle Fleury, Director of Government Affairs

The end of 2019 and beginning of the new year brings changes at the federal and state level that impact nonprofits all across the Commonwealth. Here are three policy updates, summarized below, that nonprofits should be aware of:

Federal updates

  • The nonprofit transportation benefit tax has been repealed.

Strong advocacy from the nonprofit sector resulted in Congress supporting nonprofits in one of their last major actions of 2019. On December 20, 2019, the President signed H.R. 1865–a bipartisan appropriations bill–which included a repeal of the unrelated business income tax (UBIT) on transportation benefits, known as the “nonprofit parking tax.” Federal tax reform in 2017 had created this new 21% tax on certain commuting and parking benefits given to nonprofit employees. This is a retroactive repeal, meaning that nonprofits that had made payments under this new tax will be able to claim refunds. MNN joined state and national partners in calling for a repeal of this burdensome tax, and thanks nonprofits across Massachusetts for sharing their stories of impact and helping to make a strong case for repeal.

  • A change has been made to donors giving through IRA’s.

Since 2017 federal tax reform changed tax incentives for charitable giving, MNN has pointed out several strategies that nonprofits should know about in order to help donors maintain a tax benefit for their donations. One of these strategies–highlighted in the November edition of MassGives –applies to older donors making Qualified Charitable Distributions (QCDs) from their IRAs. The funding bill signed by the President on December 20 increased the age at which individuals must start making required minimum distributions–from 70 ½ to 72. Nonprofits should still promote this method of making tax deductible contributions, but should note the new age limit when discussing required minimum distributions.

State update

  • The state charitable tax deduction is returning.

Taxpayers and nonprofits in Massachusetts are poised to realize a new charitable giving benefit. On January 1, 2020, the state income tax rate in Massachusetts dropped to 5%. This prompts the return of the state charitable tax deduction, which is currently set in state statute to become available to taxpayers for contributions made in 2021 and beyond. While taxpayers are accustomed to writing off charitable contributions when itemizing their federal tax returns, the state charitable deduction will apply to contributions regardless of whether Massachusetts filers itemize or not. This incentive–which originated when Massachusetts voters approved a 2000 ballot initiative–will help offset concerning trends in the decline in individual giving, since federal tax policy altered the federal tax benefit that individuals receive for making charitable contributions.

MNN Statement on State Charitable Tax Deduction: “Individual Contributions are the Lifeblood of the Nonprofit Sector”

Earlier today, the Baker-Polito Administration announced that the state charitable tax deduction will be restored for charitable contributions made in calendar year 2021 and beyond.

MNN released this statement from CEO Jim Klocke on the reinstatement of the state charitable tax deduction:

“The state charitable deduction will provide a much-needed boost to individual charitable giving, which declined in 2018 for the first time in years due to changes in federal tax law. These changes stripped donors of their ability to itemize their charitable contributions on their federal tax returns.”

“Most of the people who give to nonprofits in Massachusetts are middle- and low-income earners. The state deduction will benefit hundreds of thousands of them each year. We need to support and promote charitable giving.”

“Individual contributions are the lifeblood of the nonprofit sector. Individual contributions to nonprofits are three times as great as the funds given by foundations and corporations combined.”

New Commonwealth Insights: The Census is Coming, and Nonprofits Should Prepare Now to Ensure Everyone Counts

Comm Insights 2019 3rd ed social media-minToday, we released the latest edition of Commonwealth Insights, “The Census is Coming: How Nonprofits Can Make Sure That Everyone Counts–and Why They Should.”

The Census is nearly here, and nonprofits around the Commonwealth should prepare now to mobilize their communities in support of a complete count. As trusted messengers, nonprofits can leverage existing assets and take advantage of new ones to raise awareness, help individuals access and complete the Census, and coordinate efforts with partners to maximize collective impact.

This edition of Commonwealth Insights features case studies of three nonprofits–Castle Square Tenants Organization, the Pioneer Valley Planning Commission, and the Chelsea Collaborative–working to ensure that their communities count in 2020. Their work can serve as a guide for other nonprofits.

The report is a practical guide that contains useful tips and resources for nonprofits to drive participation in one of the most foundational, high-stakes activities that communities undertake.

This is the third edition of Commonwealth Insights published in 2019. You can read all past editions of Commonwealth Insights at massnonprofitnet.org/CommonwealthInsights. Please feel free to reach out to us with feedback on this or any Commonwealth Insights issue.

We are grateful for the generous support of our organizational sustainers, the Barr Foundation, the Boston Foundation, and the Highland Street Foundation, which makes reports like Commonwealth Insights possible.

2019 Conference: Nonprofit Leaders Get “Sustenance” to Strengthen Their Work and Communities

2019 Conference thank you email banner-minFRAMINGHAM, MA – On Wednesday, October 16, 2019, over 600 nonprofit and business leaders attended the Massachusetts Nonprofit Network (MNN)’s annual conference, Building A Better Commonwealth. The conference provided 30 workshops and networking to deepen nonprofit leaders’ capacities to build stronger communities, featured a keynote panel discussion focusing on three areas of the statewide sector’s impact, and honored Priscilla Kane Hellweg and Darnell Williams for their storied and influential careers in the nonprofit sector.

“We know that in this line of work, there are often times when your feet are tired, but your soul is rested,” said CEO Jim Klocke in his opening remarks, hearkening back to civil rights icon Mother Pollard. “Our goal today is to give you sustenance so that at the end of each day going forward, your souls may be rested.”

The conference featured a keynote panel discussion moderated by Bob Gittens, Executive Director of Cambridge Family and Children’s Services and Vice Chair of the MNN Board of Directors, with Rachel Heller, CEO of the Citizens’ Housing and Planning Association (CHAPA), Eva Millona, Executive Director of the Massachusetts Immigrant and Refugee Advocacy (MIRA) Coalition, and Jerry Rubin, President and CEO of JVS Boston.

The panelists discussed the theme “building a better Commonwealth” and how their organizations are addressing critical issues throughout the state. The panel focused in particular on the ways that their respective issue areas–combating “cliff effects” and promoting economic mobility (CHAPA), ensuring a complete count in the 2020 Census (MIRA), and preparing the workforce for a 21st century economy (JVS Boston)–impact the nonprofit sector broadly and thus require collaborative approaches.

“The 2020 Census impacts all of us; if we are under-counted, we will all suffer,” said Millona. “Nonprofits need to work together to make sure that doesn’t happen.”

“The issue for many people in this economy is not finding a job–it’s getting a good job that pays well,” said Rubin. “JVS Boston works directly with employers to create these kinds of jobs.”

“We need a culture that calls out what’s wrong in our society, and we need collaboration between organizations to make it right,” added Heller.

MNN also presented the 2019 Lifetime Achievement Awards to Priscilla Kane Hellweg, Executive and Artistic Director of Enchanted Circle Theater, and Darnell Williams, former President and CEO of the Urban League of Eastern Massachusetts.

Priscilla Kane Hellweg, who co-founded Enchanted Circle Theater 39 years ago, was honored for her dedication to providing arts integration education and for inspiring thousands of children and adults across Massachusetts.

“I still feel inspired whenever I see a child using arts integration go from ‘I can’t’ to ‘I can,’” said Kane Hellweg. “It doesn’t get better than that.”

Darnell Williams, who served as President and CEO at the Urban League until September, was honored for his commitment to uplifting communities of color in the Greater Boston area.

In his remarks, Williams implored the nonprofit audience to “keep marching” to the top of the proverbial mountain–and not to leave anyone behind. “We can’t forget to bring the forgotten with us. Reaching the summit happens when we’re all there together,” said Williams.

The conference also featured almost 50 business exhibitors focused on serving nonprofits. Held every year since the organization’s founding in 2007, MNN’s conference is one of the largest events dedicated to building nonprofit capacity in Massachusetts.

Priscilla Kane Hellweg, Darnell Williams to receive Lifetime Achievement Awards

2019 Panelist pic 2 Copy-minBOSTON, MA – The Massachusetts Nonprofit Network (MNN) has announced that Priscilla Kane Hellweg, Executive and Artistic Director of Enchanted Circle Theater of Holyoke, MA, and Darnell Williams, President and CEO of the Urban League of Eastern Massachusetts, will be the recipients of the 2019 Lifetime Achievement Awards.

The awards will be presented at MNN’s annual conference on Wednesday, October 16, at the Sheraton Framingham Hotel and Conference Center.

“We are pleased to honor Priscilla and Darnell for their inspiring careers and for their invaluable contributions to the state’s nonprofit sector,” said Jim Klocke, CEO of MNN. “Their lives of service have made indelible impacts on the lives of people across the Commonwealth.”

“I am incredibly honored to be chosen by the Massachusetts Nonprofit Network for a Lifetime Achievement Award,” said Kane Hellweg. “To be a part of that moment of inspiration when children, youth, and adults feel their own creative potential is beyond inspiring. Thank you for this vote of confidence!”

“My family and I are so humbly honored to receive this recognition for the Lifetime Achievement Award from the Massachusetts Nonprofit Network,” said Williams. “We do this work because of our passion and purpose to help people transform their lives for the better. To have that work highlighted is a sincere blessing.”

Every year, MNN honors outstanding leaders who have made lasting contributions to the Massachusetts nonprofit sector. Past Lifetime Achievement Award winners include Hubie Jones, Carol Duncan, Paul Grogan, Beth Smith, Michael Weekes, Joan Wallace-Benjamin, and Rev. Gloria White-Hammond.

About the Lifetime Achievement Award Winners

Priscilla Kane Hellweg is the Executive and Artistic Director of Enchanted Circle Theater, a nonprofit multi-service arts organization in Holyoke, MA, that integrates arts and education to engage, enhance, and inspire learning. Under Priscilla’s direction, Enchanted Circle has become a regional leader in the field of arts integration. Enchanted Circle works in public school districts across Western Massachusetts and collaborates with over 60 community service partner organizations to develop work that bridges arts, education, and human services to chronically under-served communities, including youth in foster care, families in homeless shelters, and youth in residential treatment programs.

Priscilla earned her Bachelor of Arts from Hampshire College and professional theater training from the Provincetown Playhouse. Priscilla has created district-wide arts integration initiatives to enhance academic achievement for Holyoke, Amherst, Northampton, and Westfield Public Schools, and has collaborated on the development of several Teacher Training Institutes with numerous partners, funded by the National Endowment for the Arts, National Endowment for the Humanities, and Teaching American History grants.

Priscilla received the Champions of Arts Education Award from the Massachusetts Alliance for Arts in Education, and a Millennium Award from the National Guild of Community Arts Educators for her commitment to making quality arts education accessible to all. She was a finalist for MNN’s 2019 Nonprofit Excellence Award in the Leadership category. Priscilla’s manuscript, “Actively Engaged: Theater as a Dynamic Teaching Tool,” is scheduled for publication in 2020 by the University of Massachusetts-Arts Extension Service.

Darnell Williams is the President and CEO of the Urban League of Eastern Massachusetts, a nonprofit that provides services and programs in education, career, and professional development and employment for African-Americans and other residents of color. Under Darnell’s direction, the Urban League of Eastern Massachusetts hosted the National Urban League’s Annual Conference in Boston in 2011 after a 35-year absence, paving the way for additional conferences for people of color to come to Boston.

Darnell earned his Master’s degree in organizational development from Boston University after completing his undergraduate degree at American International College in Springfield, MA. Prior to joining the Urban League, he was Manager of Management Recruitment and Development at Massachusetts General Hospital (MGH) as well as a Diversity Consultant in private practice. Darnell served as President of the Springfield Branch of the National Association for the Advancement of Colored People (NAACP) and as the President of the NAACP New England Area Conference.

Darnell was a contributing member to Boston’s successful effort to win the 2004 Democratic National Convention. For his contributions within the Black community and the City of Boston, Mayor Thomas Menino presented him with the 2003 Community Service Award. Darnell received an Honorary Doctor of Laws from American International College and an Honorary Doctor of Humane Letters from Worcester State University.

About the Massachusetts Nonprofit Network

The Massachusetts Nonprofit Network (MNN) brings together nonprofits, funders, business leaders, and elected officials to strengthen nonprofits and raise the sector’s voice on critical issues. The network has more than 700 nonprofit member organizations and more than 100 for-profit affiliate partners. To learn more visit www.massnonprofitnet.org.

PRESS RELEASE: MNN Conference Panel to Address 2020 Census, Cliff Effects, and Workforce Development

2019 Panelist 4 square-min (1)BOSTON, MA – The Massachusetts Nonprofit Network (MNN) announced that a keynote panel featuring top nonprofit leaders will cover the 2020 Census, cliff effects, and workforce development at the organization’s annual conference on October 16, 2019, at the Sheraton Framingham Hotel and Conference Center.

The panel is centered around the conference theme, “Building a Better Commonwealth,” which captures a common aspirations of the Massachusetts nonprofit sector.

The conference’s keynote panelists will be Rachel Heller, CEO of the Citizens’ Housing and Planning Association (CHAPA); Eva Millona, Executive Director of the Massachusetts Immigrant and Refugee Advocacy (MIRA) Coalition; and Jerry Rubin, President and CEO of JVS.

The featured topics of the panel represent pressing issues at the forefront of nonprofit work. Nonprofits are playing a critical role in ensuring that hard-to-count communities participate in the 2020 Census. The “cliff effects” phenomenon, in which an increase in work earnings results in a sharp reduction or loss of public benefits, impacts many people that nonprofits serve. And as the state’s nonprofit sector faces a wave of retirements from senior-level positions, innovative workforce development strategies will be needed to develop the next generation of nonprofit leaders.

“We are excited to have Rachel, Eva, and Jerry on our conference keynote panel this year,” said Jim Klocke, CEO of MNN. “Their organizations do great work, and we can all learn from them.”

MNN holds its annual conference every year for nonprofit organizations across Massachusetts. The conference, drawing over 600 attendees annually from Massachusetts nonprofits and for-profit companies that serve nonprofits, is one of the largest gatherings for nonprofit professionals held in the Commonwealth.

About the Panelists

Rachel Heller is the CEO of Citizens’ Housing and Planning Association (CHAPA), an organization that encourages the production and preservation of affordable housing to low and moderate income families and individuals and fosters diverse and sustainable communities through planning and community development. Heller will bring to the panel expertise on solutions to combat “cliff effects,” a phenomenon experienced when an increase in work earnings results in a sharp reduction or loss of food, housing, childcare, and other public benefits. She previously worked as the Director of Public Policy at the Alliance for Business Leadership, served as Chief of Staff to Massachusetts State Senator Susan Tucker, and was the Senior Policy Advocate at Homes for Families, a nonprofit advocacy organization working to end family homelessness.

Eva Millona is the Executive Director of the Massachusetts Immigrant and Refugee Advocacy (MIRA) Coalition, the state’s largest organization representing the foreign born, and co-chair of the National Partnership for New Americans, the lead national organization focusing on immigrant integration. Millona is the chairperson of the 2020 Complete Count Committee, formed by Secretary of the Commonwealth Bill Galvin to provide education and lead community outreach around the decennial census. She will bring to the panel insights on how to encourage census participation in diverse communities. Millona is also the co-chair of the Governor’s Advisory Council for Refugees and Immigrants and serves on the U.S. Commission on Civil Rights. She serves on the Advisory Board for the Mayor’s Office for Immigrant Advancement and serves on the Attorney General’s Council for New Americans. She is a frequent speaker on immigrant integration in national and international stages.

Jerry Rubin is President and CEO of JVS, an organization that empowers individuals from diverse communities to find employment and build careers and partners with employers to hire, develop, and retain productive workforces. Rubin has overseen the adoption of innovative strategies including the nation’s first Pay for Success project to focus exclusively on adult education and workforce development for low-skilled adults. Prior to JVS, Rubin founded and was Executive Director of two nonprofit organizations: the Greater Boston Manufacturing Partnership, a training and consulting organization, and the Coalition For a Better Acre, a community development corporation based in Lowell, Massachusetts. Rubin also spent ten years in the administration of Boston Mayor Raymond L. Flynn, leading several housing, economic development and workforce development initiatives. He is the author of numerous book chapters, articles, and monographs on housing, economic development, and workforce development issues.

About the Massachusetts Nonprofit Network

The Massachusetts Nonprofit Network (MNN) brings together nonprofits, funders, business leaders, and elected officials to strengthen nonprofits and raise the sector’s voice on critical issues. The network has more than 700 nonprofit member organizations and more than 100 for-profit affiliate partners. To learn more visit www.massnonprofitnet.org.

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New Commonwealth Insights: Massachusetts Nonprofits Generate Over 551,000 Jobs and $36 Billion in Wages

Comm Insights 2019 2nd ed website (1)-minToday MNN released the latest edition of Commonwealth Insights, “The Nonprofit Sector Jobs Engine And Strategies for Strengthening It.”

The new report draws on recently-released data from the U.S. Bureau of Labor Statistics to paint the most up-to-date picture of the nonprofit sector’s economic impact in Massachusetts. The data shows that in 2017, Massachusetts nonprofits generated 551,117 jobs and $36.1 billion in wages. Nonprofits comprised almost 18% of the total workforce, the fifth highest percentage in the country.

The data also shows that from 2013 to 2017, nonprofit employment in Massachusetts grew by 41,763 jobs, an increase of 8.2%, and annual nonprofit wages grew by $6 billion, an increase of 20%.

“The nonprofit sector’s economic impact is not only large, it’s growing at a rapid clip,” said Jim Klocke, CEO of MNN. “The roles of nonprofits as economic engines and as service providers are both crucial to protect.”

The report makes three policy recommendations in support of the Massachusetts nonprofit sector:

  • Preserve and grow charitable giving, including the creation of a federal universal tax deduction and the restoration of the Massachusetts state charitable tax deduction;
  • Streamline state-level reporting requirements to remove duplication and reduce costs associated with reporting;
  • Optimize employer policies so that they work for nonprofits as well as for-profits.

The most recent edition of Commonwealth Insights comes on the heels of a Giving USA Foundation report released in late June, which found that individual donations to American charities dropped by $3.2 billion nationwide in 2018 ($10.4 billion in inflation-adjusted dollars).

Previous editions of Commonwealth Insights have explored the potential impact of 2017’s federal tax reform law on Massachusetts nonprofits.

“The nationwide drop in charitable giving resulting from the change in the federal tax code is a concerning trend. The recommendations outlined in this new report will preserve and strengthen the nonprofit sector’s role as cornerstones of our communities,” added Klocke.

Commonwealth Insights publications highlight policy, issues, and trends important to the nonprofit sector published by MNN. This is the second edition of Commonwealth Insights in 2019. Earlier editions focused on federal government shutdowns, year-end fundraising strategies, the 2020 Census, and the impacts of federal tax reform. Prior editions can be viewed at www.massnonprofitnet.org/CommonwealthInsights.

MNN CEO on Drop in Charitable Giving: Bad News – And a Warning Signal

The report, “Giving USA 2019: The Annual Report on Philanthropy for the Year 2018” issued today by Giving USA, found that charitable giving decreased by 1.7% and that individual giving decreased by $10.4 billion nationwide in 2018. The Massachusetts Nonprofit Network (MNN) released the following statement from CEO Jim Klocke:

“This is bad news for the people served by nonprofits–and a warning signal about the end of 2019.

When the economy grows, giving should increase, and it usually does. But not in 2018.

As MNN’s Commonwealth Insights reports have outlined, the 2017 federal tax bill raised the cost of giving by 28% for tens of millions of people across the country. When the cost of something goes up by 28%, there will be an impact. Today’s Giving USA report documents the impact–a drop in individual contributions of over $10 billion nationwide in 2018. That drop will have real effects for the people served by nonprofits and the communities they live in, including here in Massachusetts.

Today’s news is a warning signal because not everyone affected by the federal tax bill realized it when they made their 2018 contributions. They do now: many learned that they lost the giving deduction this past spring. The question is now what happens to 2019 individual contributions. There is a real risk that they will drop again, and by even more than $10 billion.

What should we do? First, we should restore the charitable contributions tax deduction for the millions who lost it in 2018. Second, we must make it available to everyone. We should also encourage donors to increase their giving this year, so that the 2018 drop becomes an aberration. MNN is committed to pursuing these strategies that will support the strength, viability, and sustainability of the nonprofit sector.

The people served by nonprofits, and the communities they live in, deserve no less.”

Previous editions of MNN’s Commonwealth Insights reports have explored the potential impact of the 2017 federal tax bill on Massachusetts nonprofits. Click here to download, “From Challenges to Opportunities: How Nonprofits Can Make Sense of the New Tax Law” (2018). Click here to download, “Tax Reform: Up to $513 Million of Massachusetts Donations at Risk” (2017).

MNN Welcomes New and Returning Board Members

Board Members-min

MNN is pleased to announce that eight individuals have been elected by its nonprofit membership to the MNN Board of Directors.

Three new board members have been elected to the Board:

  • Dennis P. Carman, President and Executive Director, United Way of Plymouth County, Southeast Regional Seat
  • Amanda Holm Hartigan, Assistant Director of Programs Data & Insight, The Boston Foundation, At-Large Seat
  • Celina Miranda, Executive Director, Hyde Square Task Force, Greater Boston Regional Seat

In addition, five board members have been re-elected to a second term on the Board:

  • Jacquie Anderson, Senior Director of Grantmaking, Blue Cross Blue Shield of Massachusetts Foundation, At-Large Seat
  • Elizabeth Cannon, Executive Director, Lowell Association for the Blind, Northeast Regional Seat
  • Charmane Higgins, Human Rights Seat
  • Eric Masi, Executive Director, Wayside Youth and Family Support Network, Human Services Seat
  • Liana Toscanini, Founder and Executive Director, Nonprofit Center of the Berkshires, Berkshires Regional Seat

“On behalf of MNN’s Board, I am pleased to welcome our new and returning board members,” said Jim Ayres, Chair of the MNN Board and Vice President for Programs and Strategy at the Community Foundation of Western Massachusetts. “They are pillars of the state’s nonprofit sector, and bring invaluable perspectives and experiences to the organization.”

“We’re fortunate to have these eight distinguished professionals on the MNN Board. Each is a great advocate for nonprofits across the Commonwealth,” said Jim Klocke, CEO of MNN.

The board members were elected at MNN’s Annual Meeting, which was held during the Nonprofit Awareness Day ceremony on June 3, 2019 at the Massachusetts State House. Nonprofit members of MNN voted on the slate of candidates via voice vote at the ceremony, or by proxy ballot.

The MNN Board of Directors includes representatives from all eight nonprofit sub-sectors and all regions of Massachusetts, plus at-large members to ensure that the organization is representative of the entire nonprofit sector.

House Speaker DeLeo, Senate President Spilka, Secretary Kennealy Celebrate Nonprofit Awareness Day

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Yesterday, House Speaker Robert DeLeo, Senate President Karen Spilka, and Secretary of Housing and Economic Development Mike Kennealy joined hundreds at the State House to celebrate Nonprofit Awareness Day: A Celebration of Nonprofit Excellence, an awareness event honoring the contributions of nonprofits in Massachusetts. The celebration was hosted by the Massachusetts Nonprofit Network (MNN) and presented by Citizens Bank.

“Over 33,000 nonprofits are making a difference in every corner of the Commonwealth, adding significant contributions to the health and vitality of our communities,” said Jim Klocke, CEO of MNN. “Yesterday, we recognized 27 nonprofits that typify the excellence of the state’s nonprofit sector. We are also grateful for Citizens Bank for their continued support of the Nonprofit Awareness Day Celebration.

“Yesterday we celebrated the 33,000 nonprofit organizations that are the cornerstone of our communities,” said Jerry Sargent, President of Citizens Bank, Massachusetts. “At Citizens Bank, we are honored to partner with the Massachusetts Nonprofit Network and celebrate the remarkable work of over half a million employees providing valuable resources for our fellow citizens day in and day out.”

Nonprofit Excellence Awards were presented to four organizations and two professionals that exemplified the innovative and effective work of nonprofits across Massachusetts. The winners were nominated by peers and community members and were selected by an independent panel of nonprofit and business leaders. This year, the independent panel selected 27 finalists for the Nonprofit Excellence Awards from almost 100 nominations.

The Nonprofit Excellence Award winners were:

In the month leading up to Nonprofit Awareness Day, MNN’s #MAkingadifference social media campaign engaged hundreds of nonprofit and business leaders on social media to communicate the positive impact of nonprofits across the state. Participants in the social media campaign shared thousands of pictures, stories, and statistics that illustrated the depth and breadth of the state’s nonprofit sector.