Charitable giving in the United States declined in 2022 -- only the fourth time in four decades that donations did not increase year over year -- according to the Giving USA report. Total giving fell 3.4% in 2022 to $499.3 billion in current dollars, a drop of 10.5% when adjusted for inflation. The decline comes at a time when many nonprofits, especially ones providing services to those in need, report an increase in requests for help.
Decision makers for donations are “not mom and pop donors, they’re wealthy individuals,” Bergdoll said. “That is indicative of where the money is coming from now versus 30 or 40 years ago.”
According to the report, 64% of donations in 2022 came from individual donors, 21% from foundations, 9% from bequests, generally through a will or estate plan, and 6% from corporations. In 2022, corporations donated 0.9% of their pre-tax profits in the United States, though Bergdoll said the report does not track whether multi-national corporations donated more in other countries.
The U.S. Supreme Court issued an opinion in the Biden v. Nebraska case holding that a pandemic-era law that gave the U.S. Department of Education (DOE) flexibility to “waive or modify” student loan provisions during a national emergency doesn’t give DOE the authority to cancel student debt. As a result, the Biden Administration cannot move forward with its plan to cancel up to $10,000 of student debt per borrower and up to $20,000 in student debt per borrower with a Pell Grant. Many nonprofit employees, and many people who receive services from nonprofits, would have benefitted from this debt cancellation proposal. In light of the Court’s decision, the Biden Administration has indicated that it will try other regulatory or administrative approaches to reduce student debt. While some nonprofit employees will be disappointed by the Court’s decision, they should note that the ruling has no impact on the Public Student Loan Forgiveness (PSLF) program, which provides for student loan forgiveness (separate from the Biden Administration’s debt cancellation proposal) for borrowers who work for charitable nonprofits for 10 years while paying off their student loans. Unlike the $10,000 debt cancellation proposal, a federal statute expressly authorizes the loan forgiveness in PSLF. The National Council of Nonprofits posted an analysis of the implications of the student debt court decision (and a second related case that the Court decided last Friday) for nonprofit employees.
The Louisiana Legislature concluded its legislative session for 2023 on June 8. During this session, seven constitutional amendments were passed, adding to the existing one that was referred to the 2023 ballot in the Legislature’s 2022 session. Altogether, there will be eight amendments on the statewide ballot for 2023.
A two-thirds vote is required in each chamber of the Legislature to refer a legislatively proposed constitutional amendment to the ballot for voter consideration. The governor’s signature is not required. PAR (Public Affairs Research Council) and CABL (Council for a Better Louisiana) will have a more in-depth look at the amendments and the ballot language closer to the fall elections.
Four amendments will be on the Oct. 14 ballot and four will be on the Nov. 18 ballot.
On Oct. 14, voters will decide the following constitutional amendments:
On Nov. 18, voters will decide the following constitutional amendments:
The 60-day legislative session came to a dramatic end at 6pm on Thursday, June 8, 2023. With approximately 1,000 amendments that had to be added to the budget bills (HB 1) in the last hours of session, the House and Senate passed the budget package in the final half-hour with the House doing so with only minutes to spare before final adjournment. While the bills were being negotiated behind closed doors in conference committee in the final hours, tensions began to mount in the House Chamber as many lawmakers expressed frustration that they were given little to no time to vet the spending plans that have been major points of contention throughout session.
Health care and education were slapped the hardest. The budget included a surprise $100 million cut to the Louisiana Department of Health (LDH) and a $2,000 teacher pay raise became a one-time stipend in lieu of being funded by the MFP—the funding formula for Louisiana Public Schools.
Despite LDH’s cut, the department’s $15 billion budget was still increased by $144 million. According to Rep. Jerome Zeringue, R-Houma (who is Chairman of House Appropriations Committee), the reduction was based in part on an accelerated timeline for Medicaid redeterminations.
In addition to healthcare and teacher salaries on the chopping block, early childhood education efforts landed at $44 million in the budget – down from the originally slated $52 million budget. The $2.2 billion in excess cash lawmakers fought over all session got squeezed into a supplemental bill, where local government leaders will find spending for roads, bridges and other services. Lawmakers will also get to say they made $690 million in additional debt payments. A veto by Governor Edwards and a legislative veto override session are sure to follow the drama of the last day of the session.
The data is in and it shows that the universal charitable deduction that Congress put in place temporarily in 2020 and 2021 during the pandemic worked. Taxpayers who took the standard deduction on their 2021 tax returns were able to claim an additional $18 billion in donations to the work of charitable nonprofits thanks to the universal charitable deduction, according to interim data released by the Internal Revenue Service last week. More than 47 million households utilized a tax incentive enabling individuals to claim $300 in charitable deductions and couples to claim up to $600 in deductions even while also taking the standard deduction. One-fifth (21.3%) of those donations came from taxpayers with adjusted gross income of less than $30,000. In 2020, when the special deduction was limited to $300/household, 42.2 million households claimed $10.9 billion in additional giving. The universal charitable deduction expired after 2021.
This is great information to include in conversations with members of the Louisiana Congressional delegation or their staff. Passage of the Charitable Act (S.566 / H.R. 3435), an improved version of the giving incentive, is a major legislative priority of the charitable nonprofit community this year.
Source: National Council of Nonprofits
Not even a week after the debt/spending measure was signed into law, House tax committee Chair Jason T. Smith (R-MO) announced a series of three tax-cut bills that are estimated to increase the federal deficit by at least $21 billion or likely much more according to budget experts. The first measure, the Working Families Tax Cut Act (H.R. 3867), would provide a two-year increase in the standard deduction of $4,000 for households that do not itemize ($2,000 standard deduction for individual taxpayers). As drafted, the legislation would limit the full benefit to families earning less than $400,000/year and would provide an extra tax break to the 90% of taxpayers who claim the standard deduction. Two additional bills, the Small Business Jobs Act (H.R. 3937) and the Build It in America Act (H.R. 3938), would repeal the reporting requirement for transactions above $600 and restore a series of tax breaks for businesses, respectively. The latter measure would also reduce or eliminate some tax provisions in last year’s Inflation Reduction Act designed to fight climate change. The package is not likely to advance in the Senate but components could be included in a potential year-end tax bill.
Links to more info on the proposed bills:
After acrimonious negotiations and nearly defaulting on federal debt obligations, Congress enacted the debt-limit and spending cuts deal struck between President Biden and Speaker McCarthy. The Fiscal Responsibility Act (P.L. 118-5) extended the debt limit through 2024, rescinded nearly $30 billion in unspent pandemic-related funds, and imposed caps on federal spending for the next two fiscal years. Among the Covid-era spending cuts, the measure cancels about 3,000 AmeriCorps jobs this summer and in 2024. The law alters the Supplemental Nutrition Assistance Program (SNAP) by extending work requirements for some food aid recipients up to age 54 while expanding exemptions from the work requirements for veterans, homeless individuals, and young people coming out of foster homes. According to the Congressional Budget Office, the Fiscal Responsibility Act will reduce the deficit by approximately $1.5 trillion.
House bill 46 by Representative Jason Hughes was drafted after a FOX 8 report highlighted dangerous living conditions at apartments in New Orleans that are owned by an out-of-state religious non-profit. Representative Hughes’ bill, which was signed by Governor Edwards, proposes to change the state constitution to force negligent non-profit property owners to pay taxes. “We have a couple of bad actors around the state that have been highlighted by FOX and others where residents are actually living in conditions of mold, where there are clear holes in the ceiling, water is coming in and these out-of-state landlords aren’t doing anything about it.”.....
Bill summary: Allows for denial of an ad valorem tax exemption for property owned by a nonprofit corporation or association and leased as housing if the property is found by a local governing authority to be in such a state of disrepair that it endangers public health or safety.
The language on the fall ballot that electors will vote YES or NO, to amend the Constitution of Louisiana, will read as follows: Do you support an amendment to deny a property tax exemption to a nonprofit corporation or association that owns residential property in such a state of disrepair that it endangers public health or safety?
Source: Fox 8
By the time many of you read this, the legislative session will be close to wrapping up or completely over. In accordance with the Louisiana Constitution, the legislature must adjourn no later than 6:00 PM on Thursday, June 8, 2023.
House Bill Filing Counts
This week, leaders of the Senate and House of Representatives continued to meet behind closed doors to negotiate a final version of the state budget for FY2023-25. Legislative leaders hope to have the state budget in place before the start of the new fiscal year on July 1, 2023.
The House Appropriations Committee voted 21-3 to allow lawmakers to spend as much as $1.65 billion more by raising the state’s spending limit over the next 13 months. That’s $650 million less than the Senate desired, though Senate President Page Cortez, R-Lafayette, was confident it wouldn’t result in drastic reductions to the Senate’s spending priorities.
In addition to public school teacher and school staff pay raises, the Senate voted overwhelmingly for a budget plan Monday afternoon that prioritized giving more money to water and sewerage projects, college and universities, law enforcement pay, and an incentive fund to lure more property insurance companies to Louisiana. Senate Finance Chairman Bodi White, R-Central, said he expected the House to reject the Senate budget plan and send the matter to a legislative conference committee, where negotiations over the state’s financial priorities will continue. The conference committee process will be secretive, and jockeying over the state spending plan will continue largely behind doors for the next few days. House and Senate leaders will select six legislators — three from each chamber — to negotiate on each one of the budget bills, but those talks won’t take place out in the open.
State lawmakers must come to a consensus on their budget plan and the spending cap before 6pm Thursday evening, when the legislative session is scheduled to end.
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