Foundation Transparency in an Era of Open 990 Forms
For foundations operating on a calendar year, your 2017 Form 990s and Form 990-PFs are due next month, on May 15.
Form 990s, used by public charities and community foundations and Form 990-PFs which are used by private foundations, give the IRS information about tax-exempt organizations and educates organizations about tax requirements and compliance.
As CMF reported in 2016 the IRS began releasing Form 990 and 990-PF tax returns, nonprofit tax forms, as machine-readable open data, making them easily accessible, searchable and shareable by the public.
These forms provide a snapshot of foundations’ financial expenditures, investment data, grant information, write-offs and more.
IRS officials said the decision to turn the nonprofit tax data into an easily accessible and readable format was prompted by the continued calls for transparency in the nonprofit sector.
The Council on Foundations (COF) shared in a recent webinar that the IRS has released nearly 297,000 Form 990s to date, with new batches to be shared on a quarterly basis.
The public can download the forms and easily compare annual data in any category internal to a foundation and compare foundations’ data with other similar organizations. This creates new opportunities for foundations to message and share information with the public about their work.
We’re seeing more efforts to provide transparency in the sector. ProPublica recently announced it has added a new feature to its Nonprofit Explorer database. Using tax returns, ProPublica’s new feature allows the public to search for compensation of board members and “key employees” at nonprofit organizations.
COF provides in-depth workshops around this topic and how to best prepare for your Form 990 and Form 990-PF, knowing it can be easily searched, viewed and compared to other organizations by the public.
COF's webinar provided recommendations for foundations to consider when preparing their forms.
Don’t use acronyms or abbreviations on the form and don’t provide generic descriptions. Be explicit with details on the grantee, the purpose and strategies of the grant. It’s a great opportunity to share your work with the public.
Foundations may want to consider providing information on their website about their process for setting executive compensation and explain their investment strategies to provide context to anyone who may be accessing their 990s.
Prepare a reader’s guide to the form that explains what information is included and any specific messaging from the foundation. The webinar recommends viewing the Bill and Melinda Gates Foundation’s transparency page and reader’s guide.
Completely and accurately fill out administrative expense fields.
Know what’s in your investment portfolio and shape a narrative around your investments as they align with your mission.
Engage the communications department to review the form before submitting, as they can provide a storytelling lens.
For an example from Michigan, The Kresge Foundation provides its 990-PFs and discloses all financials on its website. On the forms, the foundation shares the strategies behind the grants in the purpose column which provides more context for readers and a glimpse into their work.
Watch COF’s webinar.
Medicaid Work Requirements Under Consideration
A bill that would add work requirements for Medicaid recipients in Michigan may be headed back to a legislative committee for consideration as soon as this week.
MLive reports State Senator Mike Shirkey introduced the legislation which would require Medicaid recipients to work about 29 hours per week and include audits to see if recipients are meeting work requirements.
In January, the Centers on Medicare and Medicaid Services (CMS) provided new guidance to assist states in incorporating work requirements for “non-disabled, working-age” Medicaid recipients through its Community Engagement Initiative.
A new brief by the Michigan League for Public Policy (MLPP) examines the implications of adding such work requirements and work status data for Healthy Michigan Plan (HMP) recipients.
The HMP available through the Medicaid expansion under the Affordable Care Act (ACA), provides about 672,000 low-income residents access to health care. View the number of recipients in your county.
Highlights of the data from MLPP’s brief:
A study from the University of Michigan showed that about 49 percent of enrollees in the Healthy Michigan Plan are employed.
Nearly 28 percent were out of work, citing serious chronic conditions or mental health illnesses as the reason they weren’t working.
The remaining 23 percent were either in poor health, retired, going to school or were caregivers.
Nationally about 8 in 10 Medicaid enrollees live in a household where someone is working.
Trends and data from the Healthy Michigan Plan:
MLPP reports that 69 percent of those enrolled in the HMP said they “did better at work once they were covered,” and those who were out of work said, “coverage made it easier for them to seek out a job.”
The HMP has added economic activity that generates $150 million in state tax revenue annually. The Center for Healthcare Research and Transformation (CHRT), a nonprofit and nonpartisan impact organization, says this revenue offset nearly all the state’s share of Medicaid expansion costs in 2017.
Michigan Radio reports: “The year before Healthy Michigan began, hospitals in this state spent $627 million on uncompensated care provided to sick poor people. A year after Healthy Michigan took effect that had fallen by half. All indications are that it has fallen more since then.”
MLPP states that there are potential issues facing Michigan in implementing work requirements, including a potential burden on the state to fund the infrastructure needed for oversight and implementation of work requirements.
“Given the current status of Michigan’s budget, lower projected revenues and changes in the tax code, it is hard to identify where the state would be able to come up with funding to support these types of programs,” Emily Schwarzkopf, policy analyst at MLPP wrote in the brief.
In light of the bill under consideration in Lansing, MLPP is currently asking for testimonials about the state’s Medicaid program that they can share with our Michigan lawmakers.
Connect with CMF’s Health Funders Affinity Group.
Read MLPP’s brief.
What are Opportunity Zones?
The Michigan State Housing Development Authority (MSHDA) recently announced that Governor Rick Snyder has submitted Michigan’s application for Opportunity Zones to the federal government.
Opportunity Zones, created through the recent tax reform legislation, are designed to incentivize investments in low-income communities or areas directly adjacent to one or more low-income communities.
These communities include census tracts where the poverty rate is at least 20 percent or neighboring areas where the income is less than 125 percent of any bordering low-income tract. MSHDA shares that under the guidelines all nominated tracts “should have opportunities for potential investment.”
The governor is recommending 288 census tracts, (which is the maximum number of tracts that qualify in Michigan), to be designated as official Opportunity Zones.
Michigan is now waiting on approval from the federal government for the 288 census tracts.
Once approved, investments made in these areas allow investors to reinvest capital gains taxes in an Opportunity Fund, “which are forgiven in 10 years if the project isn’t sold,” reports Bridge Magazine.
Mission Investors Exchange shares, “The greatest tax benefits would go to investors who invest for 10 or more years. In this way, Opportunity Funds may activate passive, patient capital by connecting investors to projects in low-income communities. The pooled fund model may also increase the scale of investments while lessening the risk to any individual investor.”
"I think this tax incentive has the potential to encourage more traditional investors to explore investing in communities in need,” Jennifer Oertel, CMF’s Impact Investing Expert-In-Residence said. “The data shows that impact investing funds often meet or exceed investors' expectations for both financial and social return. I just hope that the program is designed so that the dollars will flow to many different themes of social impact in order to catalyze real change."
Detroit Mayor Mike Duggan told MLive that this program will make it “much more attractive to invest” in low-income communities.
Bridge Magazine reported on equity concerns emerging about some of the areas recommended for Opportunity Zones in Michigan, such as some high-poverty areas being left off the list. You can view the recommended Opportunity Zone areas in Michigan.
In response, Brian Mills, COO of MSHDA told Bridge Magazine that “states can only nominate one in four of all impoverished areas, so it chose neighborhoods where development is likely to occur.”
MSHDA says the state may expect to receive feedback from the U.S. Department of Treasury and further guidance on Opportunity Zones as early as the end of next month.
Ralph C. Wilson, Jr. Foundation and Michigan Health Endowment Fund partner to expand opportunities for caregivers
Content excerpted from a foundation press release. Read the full release here.
The Ralph C. Wilson, Jr. Foundation (RCWJRF) announced a partnership last week with the Michigan Health Endowment Fund and the Health Foundation for Western & Central New York (HFWCNY) along with a $2 million grant to each organization to endow a new staff position focused on developing and funding programs and initiatives that support caregivers for older adults.
The need for resources supporting both family and professional caregivers continues to grow as the regions’ population of older adults increases substantially over the next decade.
“Being a caregiver can be both rewarding and challenging, and a role that many in our communities will find themselves in at some point in their life,” Amber Slichta, vice president of programs, RCWJRF said. “There have been unprecedented technological and societal advances since the time today’s seniors were children and we have an incredible opportunity to collaborate with our partners to develop and uncover innovative programs and new systems that can support our caregivers and improve the quality of life for all in our communities.”
This unique philanthropic partnership between the three grantmakers establishes endowment funds within the Health Fund and HFWCNY to support a new program officer position within each organization dedicated to implementing strategies that support caregivers, while also advising RCWJRF on the same.
The Michigan Health Endowment Fund recently hired Tim Niyonsenga for the newly created role of program officer for caregiving.
“The Health Fund’s partnership with the Ralph C. Wilson, Jr. Foundation and Health Foundation for Western & Central New York represents a growing understanding that caregivers are instrumental to older adults’ health and wellness,” Kari Sederburg, senior program officer, Michigan Health Endowment Fund said. “We’re thrilled to welcome Tim and incorporate this focus area into our Healthy Aging work, and to support organizations leading this charge not only for Michigan but for the entire country.”