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Demand for critical services continues to climb despite indicators of economic recovery, finds Nonprofit Finance Fund's 2015 State of the Nonprofit Sector Survey. In this seventh annual survey, more than 5,400 respondents from nonprofits nationwide shared details of the financial challenges and opportunities that underpin their ability to create positive social change. The survey was supported by longtime partner the Bank of America Charitable Foundation.
These are some of the key findings:
- Demand for the services nonprofits provide — such as health and human services, workforce development, and childhood education — continues to grow.
- Nonprofits identified critical needs in their communities, including:
35 percent, affordable housing
26 percent, youth development (such as after-school and mentoring programs)
23 percent, job availability; 16 percent, job training
21 percent, access to healthcare
19 percent, access to strong, well-performing schools
- Many nonprofits are chronically under-resourced.
- Funders routinely cover only a portion of full costs of the programs they intend to support.
- Nonprofits are navigating a time of immense need and change, while pursuing ways to build long-term sustainability and viability.
Click HERE for the full survey results, along with an interactive survey analyzer and a look at trends over the past seven years.
At 8 a.m., Thursday, May 14, NFF will present a webinar on the survey results, "Achieving Adaptability in a Time of Flux." Click HERE to sign up.
The 2015 State Legislature is wrapping up the busy Conference Committee period. The final decking deadline, when all bills must be finalized and submitted for final reading, was Thursday, April 30 for non-fiscal bills and Friday, May 1, for fiscal bills, followed by final reading in both chambers next week, and then the end of the session on Thursday, May 7.
For some post-session guidance, including the governor’s timeline and an interim to-do list, check out the Public Access Room’s latest newsletter. If you are just getting started in public policy advocacy work, check out HANO’s April 2015 article for some helpful reminders about compliance issues for 501(c)(3) nonprofits.
Across the street at Honolulu Hale, the City Council is considering numerous changes to the real property tax. Bill 27 changes the minimum real property tax to $1,000, but maintains the minimum tax of $300 for properties owned and used by 501(c)(3) organizations.
Updates on Legislature measures of interest to nonprofits as of Tuesday, April 28:
• HB 1127 HD1 SD1 requires all state and county procurement officers to attend initial and follow-up procurement training. HANO testified in support and cited findings of the Government Contracting Task Force regarding the need for procurement training to make our contracting processes more effective and efficient so that governments and nonprofits can better serve the community. This bill is being discussed in Conference Committee.
• HB1292 HD2 SD2 extends the procurement task force to identify and propose amendments, if any, to the procurement code to promote economy, efficiency, effectiveness, and impartiality in the procurement of public works construction projects. An earlier version of this bill also included a focus on Hawaii Revised Statutes 103F (health and human services) contracts; at that time HANO testified requesting inclusion of representatives of nonprofit health and human service providers on the task force. This bill is being discussed in Conference Committee.
• HB83 HD1 establishes limitations on claims for itemized tax deductions and restores the deduction for state taxes paid for taxpayers with income above specified thresholds. HANO submitted comments on the need for clarification regarding the impact on the charitable deduction. This bill is dead for the session.
• SB1067 SD2 makes various changes to the charitable solicitation law regarding professional solicitors, commercial co-ventures and charitable registration. HANO testified in support of the bill and advocated for two important provisions: first, reducing the annual filing fee from $10 to $0 for organizations under $25,000 in annual revenue; second, changing the threshold for audited financial reports from $500,000 in "gross revenues" to $500,000 in "contributions." This bill is dead for the session.
• SB819 SD1 bars prohibition of student or class participation in a fundraiser or charitable activity in conjunction with a 501(c)(3) organization as part of a school project and requires the Department of Education to adopt criteria and guidelines. This bill is dead for the session.
By Vince Abramo and Kaleb Glass
On March 9, HANO hosted an informational briefing, “New Rules for Government Grants and Contracts,” featuring expert Victoria Collin, senior policy analyst at the White House Office of Management and Budget. About 80 nonprofit executive directors, CFO’s, grant and contract managers, and others attended the briefing to learn about the new regulations and how they impact nonprofits.
Collin presented the OMB's Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, called the "Uniform Guidance,” which is effective for awards issued on or after Dec. 26, 2014. All awards previous to that date are subject to the former rules.
The new Uniform Guidance focuses on transparency and strengthening oversight, reducing the risk of waste, fraud and abuse, and reducing administrative burden. The Uniform Guidance still possesses some of the same language as its predecessor but it is now compacted and organized differently to eliminate contradictions and duplications, making it more user-friendly and easier to navigate. The new guidance also focuses more on the performance of the grantee over focusing on compliance.
Some important changes for nonprofits:
• The Uniform Guidance requires payment of indirect costs. Government agencies, including pass-through agencies at state/local level, will be required to pay the nonprofit’s federal negotiated rate. If the nonprofit does not have a negotiated rate, the nonprofit can negotiate a new one or use the de minimis rate of 10 percent of modified total direct costs. From the nonprofit perspective, these changes will lessen the burden of obtaining private donations and grants to fill in the gaps for indirect costs.
• The regulations provide that more costs can be reported as direct costs, such as general administration and general expenses such as the director’s office, accounting, personnel and other types of expenditures as they relate to the federal award.
• The Uniform Guidance includes new procurement standards for nonprofits in the categories of micro-purchases, small purchases, sealed bids, competitive proposals and sole source.
• The cost principles promote family friendly policies, e.g., family leave benefits and temporary dependent care costs for travelers.
• The audit threshold for federal assistance has also been raised from $500,000 to $750,000 under the Uniform Guidance, reducing the administrative burden for organizations falling between the two amounts.
Learn more about the Uniform Guidance:
• The Council on Federal Assistance Reform has published a webpage of resources and FAQ’s for users to become more familiar with the Uniform Guidance. Besides a list of resources, COFAR also provides a series of webcasts on the page for users to refer to in order to learn more about Uniform Guidance and how it applies to you. The webcasts cover a broad range of topics about Uniform Guidance including topics such as procurement standards and indirect cost rates for sub-recipients of awards.
• The National Council of Nonprofits has an article detailing how Uniform Guidance affects nonprofits specifically. They point out that the Uniform Guidance supplies some clarification between direct and indirect costs and provides for federal assistance to cover a portion of indirect costs. Click HERE to find out more information about indirect and administrative costs.
In today’s legal and economic climate, protecting board members, staff and the organization itself from claims is critical. HANO provides low-cost, high-quality D&O insurance. Read More
Your Membership Is Important: The more nonprofit members HANO has the more effective the Alliance can be on their behalf. To learn more about HANO and to apply for membership, joining more than 270 Hawaii nonprofits who are already members, click HERE.
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Hire the Best; Find a New Job: HANO's powerful online Job Bank brings Hawaii nonprofit employers and jobseekers together. Employers, post a job or scan candidate resumes. Job hunters, post your resume for FREE and let jobs find you. Check it out − click HERE.
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Let HANO Assist You: We can bring workshops like board governance, budgeting, fund development and advocacy to your nonprofit. We also facilitate conversations and planning sessions and provide other services. For details, click HERE.