Yesterday the House Financial Services Committee passed H.R. 1427, the Federal Housing Reform Act of 2007. The bill will provide additional funding for affordable housing and change the oversight of the government sponsored enterprises (GSE) of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Last year efforts were made to greatly restrict the affordable housing trust fund, limiting the groups that could apply based on lobbying and GOTV activities. Fortunately these same attempts were not made this year and the bill passed committee yesterday is absent language of the sort. However, an amendment introduced by Rep. Judy Biggert (R-IL) was adopted that would cap at 10 percent the administrative costs for groups receiving grants from the fund. This favors large nonprofits that receive numerous grants. Read the committee press release here.

The Internal Revenue Service has posted a web page describing the tax changes for exempt organizations because of the Pension Protection Act of 2006. There is a list of new reporting requirements along with the new forms that must be used. Information is provided on such provisions as donor-advised funds and certain charitable contribution requirements.

Yesterday the Senate Rules and Administration Committee held a hearing on S.223, the Senate Campaign Disclosure Parity Act. As reported in BNA Money and Politics ($$), Chairman Dianne Feinstein (D-CA) plans to have the committee approve S.223 "in the coming weeks." The bill would require Senate candidates to file campaign finance reports electronically. Ranking Member Senator Bob Bennett (R-ID) may try to amend the bill, which some say might weaken the bill's chances of passing.

Bennett suggested it would be less complicated and less costly simply to have reports filed directly to the FEC. But, supporters of electronic filing measure who testified at the hearing, including Steve Weissman of the Campaign Finance Institute and Thomas Mann of the Brookings Institution, said the move could jeopardize the unanimous Senate support that the electronic filing legislation is believed to need.

The Office of Personnel Management, which administers the Combined Federal Campaign (CFC) charity drive in government offices, has decided to drop a requirement that charities spend no more than 25 percent of their total revenue on administrative and fund-raising expenses. Charities that exceeded the cap were required to give the OPM a reason, which the agency said was an administrative burden. Senator Charles E. Grassley (R-IA) sent a letter to President Bush expressing his concern about this rule change. Senator Grassley and others in the nonprofit sector are worried that the change will hamper the integrity of the CFC charity drive, reduce accountability and cause donations to suffer. According to the Washington Post:

It's clear, however, that many charities -- small and large -- are uncomfortable with the rule change. Global Impact, which represents U.S-based international charities, calculated that 91.8 percent of the comments received by the OPM on the change were in opposition.

On March 14, the Senate Rules and Administration Committee will hold a hearing on S.223, the Senate Campaign Disclosure Parity Act to require Senate candidates to file election reports electronically. Currently House candidates, presidential candidates, party committees, and political action committees are required to do so, while Senate candidates are exempt. BNA Money and Politics ($$) reports that the Federal Election Commission (FEC) is fully in favor of the measure, and FEC Staff Director Patrina Clark is set to testify at the hearing. The very same bill has been introduced during previous legislative sessions but had been blocked.

The Examiner reports that a new bipartisan House caucus will be formed specifically committed to issues affecting the nonprofit sector. Representative Robin Hayes (R-NC) will co-chair the first Congressional Philanthropy Caucus, and hopefully an identical group will form in the Senate. This announcement coincided with the Council on Foundations' annual "Foundations on the Hill", an event where grantmakers can meet members of Congress. This appears to be an excellent opportunity where the issues impacting the sector can reach Congress. The blog Inside Philanthropy also responded to this news.

According to the Examiner article; "The first thing foundation officials want Congress to do is extend the IRA Charitable Rollover provision. The provision, which expires this year, permits someone 70 or older to donate money in an IRA without paying tax on the distribution. Nonprofits would also like to see the $100,000 cap removed and the option for making such an IRA disbursement extended to younger donors."

Making it clear that it is important for nonprofits to be in touch with lawmakers, this article reiterates to nonprofits the great value in lobbying. A course called Advocacy Skills and Strategies at the University of San Diego is highlighted where students learn to "name and frame an issue, develop a fact sheet and then build support among interested stakeholders. Students are advised to identify potential opposition and figure out ways to assuage those concerns before approaching lawmakers." These valuable advocacy skills have been proven successful as two state lawmakers have introduced legislation based on class projects.

Reported comments by Senator Charles Grassley (R-IA) indicate his plans to continue increased oversight of the nonprofit sector. In a BNA Money and Politics ($$) article covering Fannie Mae's decision to end its charitable foundation and create an Office of Community and Charitable Giving, Grassley was quoted several times with concern of nonprofit practices. Last year's Senate Finance Committee investigation into whether nonprofit groups deserve tax-exempt status was noted. Grassley was quoted as saying, "I'm not done looking into non-profits and political activity."

Grassley's new release said there are still "very serious questions to be answered about organizations using their non-profit status to launder inappropriate activity" and that he will continue to push for tough enforcement and new legislation where needed. The release said he continues to investigate whether foundations, including Fannie Mae's, engage in inappropriate activity for non-profit groups, such as political activity.

Posted by Amanda Adams, 04:58:10 PM