Navigating Nonprofit Legislative Priorities Under Consideration in 2024
State legislators know that communities rely heavily on nonprofits to provide them with vital services, to contribute to the economy and to help alleviate some of the burdens placed on already strained government sources.
In October, the National Nonprofit Legislative Caucus focused on specific legislative priorities that it would like to see come to fruition in 2024. Here, we’ll look at three of the top priorities on deck, a high-level view of what each is aimed at changing and recommendations presented by the National Council of Nonprofits (NCN) to help your clients understand how to navigate nonprofit legislative priorities.
Priority No. 1: Expanding charitable giving incentives
Most state tax laws encourage donations to nonprofit organizations from individuals and businesses in exchange for a tax credit. The problem is that in recent years, discussions have ensued to cap, reduce or even remove all charitable giving incentives — including state charitable deductions — which, in turn, would threaten the financial ability of nonprofits to best serve their communities.
The NCN recommended expanding charitable giving incentives through above-the-line or non-itemizer deductions for all taxpayers, a provision that lowers the adjusted gross income and taxable income of the donor giving to a qualifying tax-exempt organization — whether or not they itemize.
Priority No. 2: Simplifying the grant process
The ability of nonprofit organizations to have access to grant and contract opportunities provides much-needed funds and support from community partnerships. The problem is that governments at all levels have a bad habit of delaying payments to nonprofits and changing contract terms midstream, and they have increased the complexity of applications and reporting requirements.
The NCN posed a number of recommendations that included establishing a method for delivering upfront or advance payments, creating a standardized grant application, and reforming and modernizing the grant process for a more streamlined process, to name a few.
Priority No. 3: Increasing audit thresholds
Many states require nonprofits to submit a copy of their audited financial statements as part of the registration process. The problem is that conducting an independent audit is not only a costly but also a time-consuming and resource-intensive endeavor. Moving into 2024, legislation is on the table to actually increase requirements for independent audits. Currently, six states — Connecticut, Illinois, Mississippi, New Hampshire, New Jersey and New Mexico — have increased their audit thresholds.
The NCN recommended increasing audit requirements only for organizations with revenue above $750,000.
Your clients can learn more about navigating nonprofit legislative changes in the new year by reading the National Nonprofit Legislative Caucus brief provided by the NCN.
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