Social Sector Strengthens Call for Repeal of UBIT
CMF has joined the Council on Foundations (COF) and other regional associations of grantmakers around the country in asking our legislative leaders in D.C. to take action to repeal the new unrelated business income tax (UBIT) on nonprofits.
UBIT is a new 21 percent tax imposed on nonprofits that includes fringe benefits such as transportation and parking that nonprofits offer their employees.
As national partners have shared, this tax presents a financial burden on nonprofits both in the tax itself and the administrative reporting costs.
A recent report commissioned by Independent Sector (IS) and funded by the Charles Stewart Mott Foundation details the impact of UBIT on nonprofits.
Data at a glance:
The new tax will divert an average of $12,000 from each nonprofit’s mission every year.
The administrative costs required for UBIT will cost a nonprofit on average $15,000 a year.
The tax on fringe benefits is a more significant burden to smaller nonprofits.
CMF has signed COF’s joint letter to members of the Committee on Ways and Means and Senate Committee on Finance sharing these concerns and asking lawmakers to repeal UBIT for tax-exempt organizations.
This comes after CMF members shared information on the burden of UBIT for the nonprofit sector with lawmakers at Foundations on the Hill in D.C. last month.
In late March, COF also provided testimony to Congress regarding UBIT and other challenges facing the charitable sector as a result of the 2017 Tax Act. COF shared in part, “Aside from the fact that new taxes imposed on charities mean less dollars available for charitable programs, these new rules also affect exempt organizations as employers and increase the cost to employ the hundreds of thousands of individuals working in the sector.”
The deadline for nonprofits to make their first quarterly tax payments for UBIT is in June. We are seeing emerging legislation that attempts to address this issue ahead of the deadline.
Legislation currently under consideration:
In late February, Senators James Lankford and Chris Coons reintroduced Senate Bill 632, Lessen Impediments from Taxes or the LIFT for Charities Act, to repeal the UBIT on transportation fringe benefits for tax-exempts. This bill has been referred to the Committee on Finance.
In early March, Congressman Mark Walker and Tom Suozzi reintroduced House Bill 1545, the LIFT for Charities Act companion legislation. The bill also seeks to repeal the inclusion of certain fringe benefit expenses in UBIT.
CMF will continue to monitor this legislation and share updates as they become available.
Check out the report from Independent Sector.
New Investment to Complement Work Underway Addressing MI’s Opioid Crisis
As Michigan continues to battle the opioid crisis, Bloomberg Philanthropies has committed $10 million to help our state address this health issue.
Michigan is the second state to receive support from Bloomberg Philanthropies as part of the organization’s three-year $50 million initiative that will cover 10 states in the U.S.
Michigan’s opioid epidemic by the numbers:
Michigan ranks eighth in the country for the number of overdose deaths.
In 2017 there were 2,729 drug overdose deaths in Michigan, a 14 percent increase from 2016.
From 1999 to 2016 there was a 17x increase in overdose deaths in our state.
Bloomberg Philanthropies said that it will work with its national partners to support high impact, state-based interventions.
The $10 million investment in Michigan is aimed at leveraging work already underway in our state.
Bloomberg Philanthropies shares that projects may include expanding Medically Assisted Treatment (MAT) for opioid use disorder in settings like correctional facilities, expanding distribution of naloxone (a nasal spray or injection that reverses the effects of opioids) and enhancing systems to improve the timely collection of data to help speed response to the crisis.
“We hope our work in places like Michigan and Pennsylvania spares more families the heartbreak of losing a loved one to opioid addiction or overdose,” Michael Bloomberg, founder of Bloomberg Philanthropies and World Health Organization Global Ambassador for Noncommunicable Diseases said. “And by showing that progress is possible, we can create a model for action that other states and organizations can follow.”
As CMF has reported, several CMF members have been working in partnership together on projects and programs to prevent opioid abuse, including leading education efforts for CMF members through webinars and discussions hosted by the CMF Health Funders Affinity Group.
The Office of Foundation Liaison (OFL) has supported Governor Gretchen Whitmer’s policy team as the Bloomberg Philanthropies opportunity evolved and participated in project development discussions to ensure the work of Michigan funders was represented.
As a result, Bloomberg’s implementation team has extended its stay in Michigan to attend the CMF Health Funders Affinity Group meeting on April 11 where they will provide a brief presentation on their work and engage with Michigan funders on the opioid epidemic.
There’s still time to register to join the Health Funders Affinity Group Meeting on April 11 in Lansing.
Building Shared Prosperity
The W.E. Upjohn Institute for Employment Research, a nonpartisan, independent research organization and CMF member has released a new report which shares how communities can build shared prosperity by leveraging innovative place-based models.
The report, Building Shared Prosperity: How Communities Can Create Good Jobs, examines college scholarship models and workforce development opportunities that can be modeled and scaled in small and medium sized cities and rural areas.
This latest report emerged following the Institute’s 2018 launch of a research initiative into place-based strategies for local prosperity.
“We hope this report generates new thinking about how communities can pursue a jobs-based strategy for broadly shared prosperity by simultaneously investing in the human capital of residents and providing targeted support to business,” researchers said.
We’re highlighting several models from the report that relate to Michigan philanthropy.
Place-Based Innovations in College Scholarship Programs
The report highlights the Promise Scholarship model, which was first introduced in Kalamazoo in 2005. The report shares that this model, which is offered to people who live in a specific place, can build local prosperity through economic and educational improvements.
One example of this model in action is the Challenge Scholars program, a Promise scholarship, where the Grand Rapids Community Foundation covers tuition and fees for two or four years of college tuition for students graduating from Union High School, a Grand Rapids Public School.
The report highlights the impact such Promise programs can have but also notes the scholarship model is one component and aligning it with place-making efforts such as neighborhood development and workforce development can lead to community transformation.
Place-Based Innovations in Workforce Development
Neighborhood Employment Hubs are an example shared in the report of what place-based workforce development can look like on the neighborhood level. Neighborhood Employment Hubs developed by Michigan Works! Southwest (MWSW) in partnership with the W.K. Kellogg Foundation (WKKF) are currently being piloted in Battle Creek. The hubs provide a one-stop center for workforce resources serving African-American and Latinx populations with an income below 200 percent of the poverty level. The hubs are located in a church, housing complex, a community action agency and within the Calhoun County Jail. The goal of the hubs is to place at least 25 percent of individuals into jobs where the pay averages at least $15 per hour and achieve a one-year job retention rate of 85 percent.
Employer Resource Networks (ERNs) are another example cited in the report. ERNs began in West Michigan and leverage community support and help businesses find and retain talent they need through employee training and support services.
For example, in 2017-2018 Southwest Michigan ERN (SWMERN) served more than 1,400 employees, providing services such as coaching, financial literacy, finding child care and navigating government agencies.
CMF highlighted a member partnership with an ERN that shows what this work looks like on the local level in our 2018 rural philanthropy video series. Pennies from Heaven Foundation of the Community Foundation for Muskegon County, a CMF member, entered into a partnership with United Way of Mason County and 13 local employers to support the Lakeshore Employer Resource Network of Mason County, which strives to break down barriers for employees to be successful in the work place.
These are just some examples of innovative partnerships and models involving Michigan philanthropy that researchers say have been successful in building a future toward shared prosperity in their community.
“As with the place-based scholarship movement and many other innovations in U.S. social and economic policy, the best solutions often emerge through experimentation and insights at the local level. Place-based development for shared prosperity is hardly any different,” the researchers said.
Check out the full report.
Ruth Mott Foundation continues support for North Flint
Content excerpted from a foundation press release. Read the full release.
The Ruth Mott Foundation has awarded more than $2 million in its first 2019 grant cycle to projects and programs that serve north Flint residents in the areas of youth, safety, economic opportunity and neighborhoods.
Among the grants, the foundation continues its support for Berston Field House, the historic north Flint neighborhood hub offering youth development programs, community services and other civic engagement activities.
Berston received one of the first grants awarded when the Ruth Mott Foundation launched its north Flint strategy in 2016. Since then, under the stewardship of the nonprofit Friends of Berston group and United Way of Genesee County, the field house has continued to thrive as a trusted community center with expanded year-round programming that provides opportunities for residents of all ages to participate in activities that enhance quality of life in north Flint.
The Ruth Mott Foundation’s support will be used to leverage funds Berston will receive from the new Genesee County arts millage that must be used for arts education and cultural enrichment activities.
“Berston Field House is much more than a neighborhood center – it’s a landmark institution that residents of north Flint and beyond have enjoyed for decades,” Raquel Thueme, president, Ruth Mott Foundation said. “We are proud to support Berston and all of the recently awarded projects and programs, and we look forward to working with each of these organizations to enhance the quality of life in north Flint.”