Prepare for Changes in Tax Code

Glenn Tecker

Prepare for Changes in Tax Code

Warning: this opinion may be misconstrued as partisan by those who don’t read the entire post.

I find the implications of these actions as reported by Board Source below to be concerning. These policy initiatives – and others like them – suggest an assault on tax exempt charitable organizations engaged in work on public issues and community needs. It is particularly curious coming at the same time as the movement to abandon the Johnson Amendment and allow religiously affiliated nonprofits to endorse and raise funds for candidates and issues. That change has the potential to be as consequential as was the Supreme Court decision in “United” that made unlimited and anonymous political contributions by companies possible.

Discussion of “Association Health Care Plans” and re-definitions of what constitutes “unrelated income” will likely add another layer of complexity to the politics of who wins and who loses as a result of tax code changes.

As others have observed before, the use of the exemption as a political weapon by either Democrats (some of whom see trade associations as the evil empire) or Republicans (some of whom see social action organizations as the evil empire) endangers the entire nonprofit community and its essential and unique role in American democracy.

If you have an opinion – please speak up. If not – then at least prepare for the impact of possible dramatic changes in the 501C section of the tax code on your organization.


Donors can take action against nonprofit insolvency

The US nonprofit sector employed more than 10.6% of the nation’s workforce in 2013, yet 50% of organizations struggle financially and up to 8% are technically insolvent, writes BruceDeBoskey. Philanthropists can combat the issue, he writes, by ensuring nonprofits have enough funding for overhead, offering less restricted funding and encouraging restructuring and mergers.

WealthManagement (3/19)  http://www.wealthmanagement.com/philanthropy/unprecedented-financial-risk-many-nonprofits

GOP student loan bill is bad news for nonprofit, social service jobs

A House Republican proposal to eliminate student loan forgiveness for nonprofit and public service employment would be devastating to social services work and especially harmful to women in those fields, opponents warn. The measure is part of a larger bill, approved by committee, that would crimp loan affordability

https://www.thenation.com/article/sick-with-worry-gop-bill-to-eliminate-public-service-loan-forgiveness-threatens-social-work-sector/

Commentary: Vt. must stabilize nonprofit sector amid tax overhaul

Vermont lawmakers are considering a bill to cap the charitable giving eligible for the state’s 5% percent tax credit, limiting the amount to $10,000. “It is shortsighted to cap deductions,” writes John Killacky, executive director of the Flynn Center for the Performing Arts in Burlington, Vt. “Any gains in tax revenue would come at the expense of the already undercapitalizednonprofits.

Vermont Public Radio (3/16)  http://digital.vpr.net/post/killacky-incentivizing-charitable-giving#stream/0

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About the Author

Glenn Tecker

Glenn is a Principal Consultant, Chairman and Co-CEO of Tecker International. He has served in an executive capacity with business, public agencies, and non-profit organizations. Glenn is widely acknowledged as one of the world's foremost experts on leadership and strategy.