Washington Snapshot - October 4, 2013

Welcome to a special edition of Snapshot that will focus on the government shutdown and debt ceiling debate, and what these happenings in Washington mean for you.

Fiscal Standoff on Capitol Hill

The federal government shutdown over a continuing resolution, or government funding bill, is dominating both the headlines and policymakers’ attention this week. Sue Santa, the Council’s Senior Vice President for Public Policy and Legal Affairs, issued a statement on the shutdown earlier this week emphasizing that “charitable and philanthropic organizations, as always, remain steadfast in their commitment to the communities they serve, despite the uncertainty of whether the federal government will continue to fund important programs.”

Lawmakers did reach an agreement on a 6-week continuing resolution bill that would fund the government through December, but the shutdown was triggered by fierce disagreement between the House and Senate over whether the bill would include a provision to defund the Affordable Care Act. In the midst of the shutdown, healthcare exchanges in the states opened for public enrollment on Tuesday with minor glitches. POLITICO reports that the shutdown may continue until the October 17 deadline for raising the debt limit, combining the two fiscal battles into one negotiation.

The White House and congressional Democrats say they won’t tie a debt ceiling increase to deep spending cuts or other policy changes such as tax reform, but Republicans seek to do just that. There were new indications Thursday that even more Republicans now support including instructions for tax reform in a grand bargain on government funding and the debt ceiling. Congressman Kevin Brady (R-TX-8) told Bloomberg that he thinks the instructions will include “a timetable and a firm process so both the House and Senate will pass out their best ideas on tax reform.” In a letter to House Speaker John Boehner (R-OH-8) on Wednesday, Senate Majority Leader Harry Reid (D-NV) said that he is willing to negotiate with the House on a joint budget plan that includes features such as tax reform, but only after Congress passes a bill to restart the government.

Lawmakers on both sides of the aisle recognize the danger of a debt ceiling default for our economy and have privately vowed not to let it happen, but there seems to be little progress towards a resolution that both sides would support. We will keep you posted as these fiscal negotiations unfold here on Capitol Hill over the coming weeks.

What does it mean for you?

The Chronicle of Philanthropy took a look at the shutdown’s impact on charitable organizations. Few federal grants will be awarded during the shutdown, which hurts organizations that rely upon federal funds. At least one organization cited in the article, the Eastern Idaho Community Action Partnership, told some staff that they should stay home on October 14 if there is no spending bill by then. In a separate piece, the Chronicle noted that more than 20 Head Start programs run by nonprofits did not receive grants they were supposed to receive Tuesday, and had to stop providing educational services to 19,000 children across the country.

A Nonprofit Quarterly op-ed also warned nonprofits that a prolonged shutdown, combined with the threat of a debt ceiling default, could mean “big, deep, plunges” in the stock market. This could impact charitable organizations’ investments and take a toll on grantmaking.

If your grantees currently have federal grants or are expecting to receive federal dollars in the near future, these funds will likely be delayed unless a funding bill is passed. The Washington Post also has several helpful shutdown graphics that illustrate what agencies and public services are affected. As for tax obligations, the IRS clarified that while taxpayer assistance services are not available during the shutdown, all tax returns and payments are still due on time.

If you have a story to share on how the shutdown or fiscal uncertainty in Washington is impacting your work, we would be interested to hear from you!

Interesting Articles and Op-eds this week

Rallying around the charitable deduction

Last week, we introduced you to the Charitable Giving Coalition’s inaugural blog post. This week’s post continues the conversation about how the charitable deduction benefits our communities. If you have other compelling reasons for why the deduction should be protected, the Coalition encourages you to share your ideas!

Other organizations are also coming out in support of charitable giving incentives. Philanthropy New York (PNY), a regional association of philanthropic organizations based in the New York City region, recently issued a public statement in support of maintaining the full deductibility of charitable donations.

On a related note, this week Council President and CEO Vikki Spruill authored a blog post on the 100^th anniversary of the creation of section 501(c)(3) in the tax code of exemption for charitable organizations. She highlights the tremendous legacy of philanthropy in building a better society, and emphasizes the importance of protecting charitable giving incentives: “The current system of charitable incentives remains an important component of American life because it allows private dollars to go directly those who need them most.”

Giving in West Virginia

An interesting piece in the West Virginia State Journal highlights a growth in charitable giving in the state, which has traditionally ranked low in giving. Paul Daugherty, President and CEO of West Virginia Grantmakers, says that about 65 percent of West Virginians who itemize their deductions are middle-class or low-income. Daugherty told the State Journal that “reducing or altering the charitable deduction could reduce their ability to give, resulting in many critical charities that respond to the needs of our citizens and communities, during these challenging times, in a precarious position of not having enough revenue to continue their good works.”

Report: private foundation assets grow

A report from the Council and the Commonfund Institute shares good news: private foundations are recovering from the recession. Endowments grew 12 percent in 2012, according to the report, compared to a fall of .7 percent in 2011.

Rep. Rangel advocates for charitable organizations

In a New York Daily News op-ed, Congressman Charlie Rangel (D-NY-13) urged his colleagues in Congress to take their time to do tax reform the right way instead of including something in a debt ceiling bill. Rangel said: “a bipartisan approach with plenty of conversation and compromise” is the only way to protect “universities, houses of worship, food banks — the organizations improving our community and asking so little in return.”

Comments on Veterans' Affairs strategic plan

For those of you involved in veterans' philanthropy or who are interested in veterans' issues, the VA has published its proposed 2014-2020 strategic plan for public comment. This critical plan will guide the operations of VA programs for the next five years, and is a prime opportunity for charitable organizations to recommend innovations, evidence-based practices, and place-based perspectives directly to VA decision-makers. Feel free to share this information with your networks and grantees.

Save the Date: Protect Giving Day

November 20 is Protect Giving Day on Capitol Hill! Mark your calendars for the Charitable Giving Coalition’s second annual fly-in event. Come meet with policymakers and their staff to share your story on why the charitable deduction is so crucial for the work you do. We encourage you to check out this link for more information and share it with your colleagues!

HUD Secretary's Award for Public-Philanthropic Partnerships

Secretary of Housing and Urban Development Shaun Donovan and Council President and CEO Vikki Spruill recognized 10 philanthropic funders with the 2013 Secretary’s Award for Public-Philanthropic Partnerships. These organizations were recognized for enhancing the quality of life for low-income and moderate-income families. The projects addressed issues concerning housing and neighborhood improvements, education, health and recreation, transportation, arts and culture, public safety, sustainability and economic development.

We will be sharing with you the award winning projects over the next several weeks. Here are the first two winners.

Empire Health Foundation - Eastern Washington Obesity Prevention Program

Through extensive partnership with school districts and community agencies, the Eastern Washington Obesity Prevention initiative is starting to see measurable reductions in childhood obesity rates. Six school districts have converted from unhealthy processed foods to healthy scratch cooked meals; from chicken nuggets to herb-baked chicken; from French Fries to roasted red potatoes; from syrupy canned peaches to fresh fruits and vegetables. Last year alone, 1.6 million meals were positively impacted by this change.

Fairfield County Community Foundation - Stable Families Program

The Stable Families Program provides intensive case management and support services to high risk families in Bridgeport public housing. Services are aimed first at helping residents resolve issues that could lead to eviction and then to providing services and support that help improve the health, stability and economic and educational success of these families. The program is unique because of the strong relationship that has been built between the project’s key partners: FCCF, Bridgeport Housing Authority, Connecticut Legal Services, New Haven Home Recovery, and, most importantly, public housing residents. Since November 2009, 96 percent of the 154 families enrolled in the program have avoided eviction, gotten back on their feet financially and moved their lives forward. 

Keep in touch!

Please feel free to reach out to any of us on the public policy team with any comments or concerns, or if you have an issue you’d like to see covered in Snapshot.