On August 17, the President signed the Pension Protection Act of 2006. The new law contains numerous changes to the tax law provisions affecting tax-exempt organizations. Key provisions include the following:

• Controlling organziations must report income from and loans to controlled organizations as well as transfers between controlled and controlling organizations. This provision is effective for returns due (without regard to extensions) after the date of enactment.*
• Section 501(c)(3) organizations must now disclose unrelated business income tax returns (Forms 990-T) and make them available for public inspection. This provision is effective for returns filed after the date of enactment.
• Private foundation and excess benefit penalty excise taxes are doubled.
• Donor advised funds, supporting organizations, and credit counseling organizations are subject to new requirements.
• Charitable contribution deductions for food, book, and certain conservation property are increased.
• Charitable contribution deductions for monetary donations, certain easements, taxidermy property, clothing and household goods, and certain other items are limited.
• Beginning in 2008, exempt organizations with gross receipts under $25,000 must file an annual notice.

Flawed public policies underlie critical social problems, and nonprofits must raise their voice and push to fix those policies. In North Carolina, a nonprofit-led coalition that includes banks, corporations and trade groups has urged state lawmakers for two years to increase to $50 million from $3 million the annual appropriation to a state fund for affordable housing. In response, lawmakers agreed to one-time increases of $5 million last year and this year, and also agreed this year to spend nearly $11 million for affordable housing for the mentally ill. These increases, while short of the coalition's goal, show the impact nonprofits can have by forming alliances and getting involved in the political process. Many nonprofits shy away from advocacy work, concluding they lack the time, resources or know-how, or fearing activism will hurt their funding. Or they limit their advocacy to issues in their own field, or to those that affect the business of nonprofits as a sector. But many social issues, like homelessness and mental illness, affect all communities and often are interconnected. By speaking up and working together on a broad range of social issues, nonprofits can help make change happen.