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PUBLIC POLICY

Policy Portal

Issue #227
May 22, 2008

STATE NEWS

FEDERAL NEWS

MNA Action Network
The place where you can speak directly to elected officials about the issues affecting the nonprofit sector

MNA Launches Staying Legal Website for Michigan Nonprofits
www.stayinglegalmi.org

Michigan Nonprofit Association is pleased to announce the launch of www.stayinglegalmi.org, a "one-stop shop" website developed to help new and already-established charitable nonprofit organizations comply with federal and state laws and regulations. The website includes sections specific to starting a nonprofit; public charities, private foundations and trusts; state and federal laws and regulations affecting nonprofit operations; exposing common myths; and much more. Check out www.stayinglegalmi.org today for information specific to your nonprofit!

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State Revenue Shortfall Expected for Next Fiscal Year

Nonprofits may face additional cuts to programs and services next fiscal year as a result of the state bringing in significantly less revenue. At the last Revenue Estimating Conference on May 16, economists determined that the state will collect $380 million less in general fund revenue. Since the state has already made significant cuts to programs and services in previous years, it is unclear how the Governor and Legislature will address this shortfall.

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Nonprofit Corporation Act Revisions Pass House of Representatives

Last month, the Michigan House of Representatives passed HB 5681, which amends the Nonprofit Corporation Act. Championed by MNA and sponsored by Majority Floor Leader Steve Tobocman and Representative Bill Huizenga, this bill accomplishes the following:

  • The board of directors of a nonprofit corporation would need at least three directors. Currently, the act requires "one or more" directors. Under the bill, an existing corporation would need to have at least three directors beginning 180 days after the bill's effective date.
  • A corporation that is a "charitable purpose corporation" could not provide loans to or guarantee an obligation of an officer or director of the corporation or a subsidiary, unless the officer or director is also a client of the corporation and the loan or guaranty is necessary to carry out the corporation's charitable purposes.
  • A charitable purpose corporation that is dissolved would have to provide notice of the dissolution to the attorney general within 60 days after the date of dissolution and could not dispose of any of its assets without written approval of the attorney general. 

These changes to the Nonprofit Corporation Act were identified by our members as necessary to promote accountability in the sector. The bill has been referred to the Senate Committee on Economic Development and Regulatory Reform. 

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2007 Michigan Giving and Volunteering Report Now Available

MNA recently released the latest version of its annual Michigan Giving & Volunteering Report, the results of a survey conducted in 2007 to better understand Michigan residents' 2006 charitable giving and volunteering and their perception of nonprofits. A few key highlights of the report include:

  • Michigan remains a strong volunteer state, with nearly 50% of its residents volunteering;
  • Nearly 9 out of ten people in Michigan made a contribution to charity in the previous year;
  • Michigan residents expect to continue volunteering at similar rates; and
  • For the first time in several years, there was an increase in the number of residents planning to give less in the future.

You can download a free copy of the 2007 Michigan Giving & Volunteering Report on MNA's website.

The survey was conducted by the Institute for Public Policy and Social Research at Michigan State University and co-sponsored by the Council of Michigan Foundations and Michigan Nonprofit Association.

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Bill Allowing Early Voter Registration for 16 year olds Wins House Approval

HB 5792 (Rep. Bieda), a bill to allow individuals to pre-register to vote beginning at age 16, passed the Michigan House of Representatives in early May. Michigan currently allows its citizens to register to vote as early as 17 & 1/2 years of age; however, research has shown that states which have allowed earlier voter registration (such as allowing 16-year-olds to register to vote at the same time they obtain their driver's license) have seen an increase in the number of young voters (age 18-24) turning out to vote. The bill has been referred to the Senate Committee on Campaign and Election Oversight.

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House Passes Bill to Modify Requirements for Central Registry Documentation Requests

Rep. Robert Dean (D-Grand Rapids) recently introduced HB 5910, a bill to revise the Child Protection Law (MCL 722.627j) to allow individuals to request documentation from the Department of Human Services (DHS) stating that the individual is not named in a central registry case as a perpetrator of child abuse or child neglect. The individual would then be free to share that information or direct the DHS to share the document with any appropriate party for the purpose of seeking employment or serving as a volunteer. HB 5910 passed the House on May 1 and has been referred to the Senate Families and Human Services Committee.

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Building and Sustaining Stakeholder Engagement, Grand Rapids Public Policy Training on June 16
Register online at http://www.mnaonline.org

The final training in MNA's Public Policy Strategies & Tactics series in Grand Rapids, "Organizing: Building and Sustaining Stakeholder Engagement," will provide the basics of organizing, power analysis, setting goals and objectives for grassroots organizing and advocacy, and methods and exercises in stakeholder analysis. This interactive session will demonstrate ways to engage board members, staff, volunteers and constituents of an organization to advance its mission through grassroots mobilization. Michele Corey from Michigan's Children will present.

Organizing: Building and Sustaining Stakeholder Engagement will take place on June 16, 2008 from 1:00 p.m. - 4:00 p.m. at the Kent/MSU Extension office (775 Ball Avenue NE, Grand Rapids). The cost to attend is $25, and registration is available online until June 9. Register Now!

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Spending Blueprint for FY09 Federal Budget Approved

This week, budget resolution conferees approved a spending blueprint for FY09 that calls for $1.013 trillion in discretionary spending, which includes funding for many nonprofit organizations and vital government services. The House Rules Committee approved the rule for the budget Tuesday evening and it is expected to see House and Senate action soon.

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Federal Trade Commission Seeks Authority over 501(c)(3) Nonprofits

The Federal Trade Commission (FTC)'s authority could soon extend to regulate nonprofits. Senators Daniel Inouye (D-HI) and Byron Dorgan (D-ND) have introduced S.2831, the FTC Reauthorization Act of 2008. A Senate Commerce, Science, and Transportation Committee press release states the bill "expands the Commission's authority to regulate non-profits for unfair or deceptive acts or practices. Currently, some non-profits have used their tax-exempt status as a shield to block FTC enforcement action." The FTC proposal would expand the definition of "corporation" to include tax code Section 501(c)(3) and 501(c)(4) organizations.

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Senator Dodd Introduces AmeriCorps Act of 2008

On May 20, Senator Dodd (D-CT) introduced S.3037, the AmeriCorps Act of 2008. The bill would amend the National and Community Service Act of 1990 to accomplish the following:

  • Raise the education award to $6,185, the average annual cost of tuition and fees for an instate student at a four year public university;
  • Make the education award tax exempt;
  • Restore the Corporation for National Service's previous authority to partner with other Federal agencies to use national service as a strategy to carry out the Departments' priorities; and
  • Promote the Corporation for National and Community Service to Cabinet level status.

The AmeriCorps Act of 2008 has been referred to the Senate Committee on Health, Education, Labor and Pensions.

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IRS Issues Letter on 2008 Political Campaign Season

In April, the IRS Tax Exempt and Government Entities Division issued a letter providing guidance on how they will treat certain activity in the 2008 political campaign season.  The letter stated the goals of the Political Activities Compliance Initiative (PACI) task force in the 2008 election season and provided limited guidance on PACI's enforcement of 501(c)(3)s engaging in election-related activity in two specific areas: 501(c)(3)-501(c)(4) websites and issue advocacy.

According to the letter, PACI's 2008 goals include educating the public and relevant community, providing guidance on the prohibition of political campaign intervention by section 501(c)(3) organizations and maintaining a meaningful enforcement presence.  Through PACI, the IRS will continue to investigate allegations of egregious violations of campaign intervention throughout the course of this election year.

To read the full letter, visit the IRS website at http://www.irs.gov/newsroom/article/0,,id=181570,00.html.

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