Jobs bill could help some nonprofits, hurt others

President Obama’s $447 billion package of Federal spending and tax cuts designed to stimulate hiring includes specific efforts to help nonprofits. The American Jobs Act would reduce nonprofit payroll taxes and eliminate them if nonprofits add new staff or increase wages. The plan also would provide a tax credit for nonprofits to hire veterans and long-term unemployed workers.

The White House issued a statement recognizing the importance of the sector in economic recovery, citing the President’s awareness that one in twelve workers in the U.S. are employed by nonprofits. The legislation would provide funding to state and local governments that could also be passed down to nonprofits and/or benefit their constituencies, such as financial assistance for local schools and funding for home rebuilding.

Nonprofit advocates have called for the President to specifically recognize nonprofits as a source of job creation, and for policymakers at all levels to include nonprofits in job growth strategies and policies. Nonprofits employ more than 13 million people and pay more than $500 billion in wages annually.

To pay for the package, the President seeks to limit itemized deductions claimed for charity by upper-income taxpayers. Obama suggested changing the limit for write-offs for itemized deductions from 35 to 28 percent. (For example, a donation of $100,000 would save the donor $28,000 in taxes rather than $35,000 in taxes.) The plan would only apply to the wealthiest taxpayers—an individual with an adjusted gross income of at least $200,000 or a married couple with an adjusted gross income of at least $250,000. It would provide the Federal government roughly $400 billion over ten years.

Many nonprofit advocates say the legislation would reduce giving to charities and force them to lay off workers or cut services to those in need, a counterproductive strategy in a plan to boost employment and help struggling nonprofits better serve their communities. Others suggest that only the largest and wealthiest nonprofits, such as museums and universities, are likely to be affected, as these are the main recipients of large grants from wealthy donors looking for tax write-offs.

Several other nonprofit-related jobs bills are already pending in the White House, although they show little sign of being supported by the Republican House. These include Sen. Kirsten Gillibrand’s Urban Jobs Act (S. 922/ H.R. 683), which would make competitive grants to nonprofit community-based organizations to provide job training, education, and support services and activities for eligible urban youth to provide them with a “pathway to employment, or education leading to employment” and require the creation of “local jobs council advisory committees” to demonstrate community-based support for the nonprofits’ strategies. Rep. Keith Ellison’s Put America to Work Act (H.R. 2368) would help local governments “create employment opportunities for unemployed and underemployed residents of distressed communities” through “fast-track jobs” and fund public and nonprofit entities to create employment opportunities in construction/rehabilitation, remediation/demolition, human services, and youth programs.

You can read more about the American Jobs Act at Thomas.gov or on the White House website. With regard to nonprofits, the Jobs Act would:

• Reduce nonprofit payroll taxes;
• Extend the expansion of unemployment benefits through January 2, 2013;
• Eliminate the payroll taxes if a nonprofit adds new staff or increases wages;
• Provide a tax credit (applicable to nonprofit payroll taxes and withholdings) to nonprofit employers that hire veterans and long-term unemployed workers;
• Provide financial assistance to states or nonprofits to help unemployed and low-income individuals to find job-related opportunities or skills; and
• Provide financial assistance for state and local governments, school construction and money to rebuild and refurbish homes.

Federal budget uncertainty puts social services funding at risk

With the Federal fiscal year beginning in just weeks, Congress will be working on a stopgap continuing resolution to stave off a government shutdown in October. When legislators return to session, a number of key budgetary conflicts are expected to emerge, despite the recent debt ceiling deal that reportedly reconciles Democratic and Republican spending priorities.

Last month, the debt ceiling deal created a “Super Committee” charged with releasing a massive $1.2 trillion deficit reduction package by Thanksgiving.  The deal has brought anxiety to cash-strapped nonprofits due to uncertainty around how mandatory cuts to discretionary funding will play out.  The bill didn’t spell out where savings should come from, although it’s pretty clear various social services funding streams will wind up on the chopping block. Elements of President Obama’s new jobs bill may be incorporated into the package, requiring even further cuts.

Setting a recent record, the House passed six of 12 appropriations bills before its summer recess.  House appropriators are said to be waiting for an omnibus bill from the Senate that would combine the other six bills. The Senate, which passed one bill before the recess and three since, is expected to start work on these six in the coming weeks.

The House budget slashed $30 billion, and conservatives are calling for the Senate to do the same, although the debt ceiling deal sets an overall spending cap for FY 2012 at a level only slightly less than that of the current fiscal year. House leadership is publicly supporting the budget levels set out in the debt ceiling deal.

Cuts to non-defense spending are much smaller in the Senate than in the House because the House significantly increased defense spending, forcing drastic cuts in other areas. Defense spending levels are expected to be a major point of contention and cause of delay in the coming months. Short-term extensions of both the surface transportation bill and the reauthorization of the Federal Aviation Administration (FAA) were also in dispute until last weekend, when Congressional leaders agreed to set both issues aside until 2012.

Because of recent natural disasters, disaster relief is also a pressing issue. The Federal Emergency Management Agency (FEMA) is running out of funding and the White House is seeking more than $5 billion in disaster aid for the next two fiscal years. Republicans in the House are insisting that new funds for disaster relief be offset by other cuts.  House Appropriations Committee Chair Hal Rogers (R-KY) announced Monday that disaster relief will be part of the continuing resolution.

Adding to many nonprofits’ concerns is the requirement that across-the-board cuts be made if the Super Committee doesn’t pass the called-for cuts by Thanksgiving. These automatic cuts, totaling $1.2 trillion, would begin in 2013. Many believe this long-term scenario is likely given the fact that the 12-member Super Committee is bipartisan, and likely to disagree on where to cut spending.

According to recent articles in Stateline and the Nonprofit Quarterly, the news for nonprofits isn’t entirely grim, at least for the short term. The projected decrease in discretionary funding is adjusted for inflation, and according to Stateline, discretionary levels would actually rise slightly over the ten-year period. Immediate spending cuts wouldn’t affect mandatory programs such as Medicaid, Medicare, and Social Security. The Children’s Health Insurance Program (CHIP), Temporary Assistance for Needy Families (TANF), and food stamps are also exempt from the automatic cuts. Nonprofits dependent on health-related Federal programs are more likely to see stable funding for the near future, while the outlook for education, Head Start, affordable housing assistance, child care, and other human services funding looks considerably more dire.

We’ll keep you posted on Congressional developments that may affect local nonprofit funding. Please let us know if you have questions about particular programs and funding streams.

Jobs still growing in nonprofit sector

Nonprofit jobs grew nearly one percent between 2009 and 2010 and  five percent in the last three years. A new report says the sector’s job growth looks favorable compared to for-profit jobs, which fell more than eight percent in the last three years.

Nonprofits employ nearly ten percent of all private workers in the country, according to Bureau of Labor Statistics analyzed by the authors of the study, part of the Johns Hopkins Nonprofit Economic Data Project.

From 2000 to 2007, nonprofits added jobs at an overall annual average rate of 2.3 percent. This rate has steadily declined each of the last three years to 0.8 percent in 2010. The pattern was reflected in nearly all 45 states for which data were available, and for-profit employment declined in every state but North Dakota and Arkansas. However, states varied significantly in their nonprofit job growth, ranging from 0.9 percent in Hawaii to 10.7 percent in Idaho.

The study says that nonprofit employment during the last three years fell 0.5 percent among civic organizations but grew at rates ranging from 1.9 to 2.5 percent in the arts, education, professional services, and health and social assistance.

The health field accounts for 50 percent of all nonprofit jobs, with education representing 13 percent and social services 11 percent. The health care workforce is the fastest growing job sector in the U.S.

The report doesn’t specify how much of the sector’s job growth is attributable to the stimulus package. Neither does it correlate job growth with salaries, or track the economic impact of job growth in the sector. This last point is an important area for future research: how much of the sector’s job growth translates to increased revenues for organizations and higher economic impacts on communities? Models for analyzing nonprofits’ direct and indirect contribution to local economies (e.g., employee spending, client/beneficiary income and spending, multiplier effect, etc.) could make these employment statistics more useful, and make a case for investment to funders and policy makers.

Check out the report here.

How are your photos?

This week we’ve been glued to images of Hurricane Irene. The pictures–rubble and roads underwater in North Carolina, bridges swept away in Vermont, empty foundations in New York—tell the stories of devastation and loss better than any words.

Pictures help us empathize. When we see people next to a house lying on its side, a yard full of wreckage, we ask, “What if it was me?” Pictures motivate us to send money, people, goodwill.

We’ve all experienced the power of images, and not just after disasters. Photographs can affect us with hope, gratitude, anger, and fear. They create indelible memories, inspire our hearts and minds, change the world.

Is your nonprofit using photos as well as it can?

Most of us don’t give photography too much thought at work. When it comes time to redesign the website or publish another Annual Report, we dig through the files for the least blurry shots, pull a couple of our building, a fundraising event, a few clients in the waiting room.

National nonprofits with large marketing departments have stunning photos. But what if you’re not the World Wildlife Fund or the Susan G. Komen Foundation? You may not have professional photographers and designers on staff, but that doesn’t mean your organization can’t harness the power of pictures to convey what you do, and how, and for whom. This week we share some tips and reminders for using photography to tell your organization’s story. Got others? Let us know in the Comments section below.

1. Take a lot of pictures. Make sure at least a few people on staff have cameras. Inexpensive point-and-shoots are fine. Urge them to take pictures on a regular basis, not just when you have an upcoming publication.

2. Revisit the “About” section on your website. If it’s accurate, it’s a guide to what your pictures should convey.

3. Avoid generic shots that may as well be stock photos. How is your organization unique from the other 1.5 million nonprofits in the U.S.?

4. You need different pictures for different purposes and audiences. Target your pictures for fundraising, client education, volunteer recruitment, marketing programs and events, etc.

5. Make your pictures have a message. What’s your call to action? Do you want people to drive less, eat better, invest in literacy, check out new artists?

6. Speaking of action, take action shots. They’re more descriptive, more interesting, and more engaging.

7. Faces are good, backs are usually not.

8. There are hundreds of books and websites on photography. Basic rules can go a long way—use natural light, avoid shadows, get close, no distracting backgrounds…

9. Photoshop is your friend. A little post-processing can make a world of difference. You don’t need sophisticated skills to be able to bump up the brightness or the contrast.

10. Attach your photos to stories, names, and places whenever possible. Context is compelling.

11. Get feedback on photos you’re thinking about using. But don’t ask people who already know and love your organization, because they won’t be objective.

12. If the photo habit doesn’t seem to work in your organization, consider hiring  a pro. Photography students and aspiring professionals may be more affordable, and they might welcome the chance to build their portfolios.

13. Keep your photos organized. Give them recognizable names, use a filing system, and copy the great ones you know you want to feature in a running folder.

14. Don’t save photos only for your website. Make them a part of your regular communications—training materials, event calendars, business cards, etc.

15. For a different perspective, consider sharing cameras with clients and community members. See Photovoices  for inspiration (and possible funding.)