The Policy Brief: February 28, 2020

Friday, February 28, 2020

In This Issue:

 

Welcome to CMF’s Fourth Edition of The Policy Brief

Dear Colleagues,

Michigan will again have one of the largest contingencies at Foundations on the Hill (FOTH). This speaks to your leadership and value of advocacy as being an important tool in changing outcomes for the charitable sector and in the communities you serve. This edition of The Policy Brief points to all sorts of examples of how you are leading in the advocacy space. From PFAS to scholarship displacement (one of the issues that we are bringing forward with our congressional delegation during FOTH) you are making your voice heard and CMF is an important partner in doing so.

Thank you for your leadership and continued advocacy efforts in making Michigan and our nation better. Please let us know if you have any questions, feedback or reflections. We welcome your partnership!

Sincerely,

Regina Bell
Director of Government Relations and Public Policy

Olivia Lewis
William Richardson Public Policy Fellow

 

Outreach is the Critical Next Step in Addressing Scholarship Displacement

In the year since CMF began actively addressing scholarship displacement, members and staff close to the issue have collected and shared data with state stakeholders, but need stories and strong partnerships to begin to affect change.          

CMF’s Michigan Community Foundations’ Youth Project (MCFYP) Committee will be working with CMF staff on an advocacy outreach campaign this spring. Their goal is to help future college students and their families understand how to read a financial aid package and what questions to ask to prepare themselves for potential scholarship displacement. Additionally, CMF staff are meeting with regional partners concerned about the impact of scholarship displacement on students and families.

Scholarship displacement is the college or university practice of reducing or eliminating a student’s financial assistance when their financial aid exceeds the total cost of attendance for the academic year. The practice goes against donor intent and hinders access to higher education, educational attainment and the state’s potential growth in economic mobility. Further, students, families and scholarship providers often don’t know it’s happening until a check is returned to a foundation or institutional aid is decreased.

The issue was first lifted through the community foundation CEO network and the Scholarship Learning Community. CMF’s Board of Trustees approved a resolution in March 2019 opposing the practice. CMF staff then worked in partnership with the Office of Foundation Liaison (OFL) to convene Governor Gretchen Whitmer’s education policy staff, representatives from the Michigan Association of State Universities and the state association of higher education financial aid officers to discuss concerns and explore opportunities for change.

Through these meetings, CMF staff learned students and parents often don’t understand what is being offered to them in a financial aid package and while universities and financial aid officers are well-intentioned, they may not understand the importance of donor intent to the philanthropic community and are bound by complex federal regulation. As many financial aid officers are working to increase access to four-year universities for students, we see an opportunity for stronger alignment.

Every student planning to attend college, unless not seeking public aid, fills out the Free Application for Federal Student Aid (FAFSA). The FAFSA is used by the federal government and universities to determine students’ eligibility for public funding. In 2019, after a push from financial aid directors across the nation, the FAFSA was released three months earlier than usual. This allowed students to apply for funding at the same time they were applying to schools, in hopes of revealing a more accurate financial aid package when determining which school is best for them.

But it’s still not a perfect system.

Data gathered through a survey of the learning community helped to underscore the negative impact of the practice across the state.

Over a dozen community foundations responded to the survey revealing they expected to grant over $21 million in academic scholarships between 2014 and 2019. These private scholarships ranged from $200 to $25,000 per student per academic year.

During that five-year period, 390 students who were offered those scholarships either rejected or deferred their scholarship to a future academic year. Many turned down the funds because the aid would be displaced once the students began classes.

According to the survey, almost every four-year university in the state was found to practice scholarship displacement.

Neel Hajra, CEO of the Ann Arbor Area Community Foundation and co-chair of CMF’s Public Policy Committee has worked alongside CMF staff to address the issue. He sees Michigan institutions as partners in this work even if it will be difficult to find a solution, recognizing that ultimately everyone wants the same thing: student success.

“Every conversation starts with a bit of friction,” Hajra said. “But fortunately, every single one ends with a better understanding by schools on why their practices inadvertently reduce the value of foundation scholarships and are contrary to donor intent.”

Hajra said financial aid officers often don’t understand the importance of donor intent to the philanthropic community.

“Offsetting our scholarships by reducing student financial aid defeats donor intent in two ways: the donor intent of foundations when we make payments to schools, and the donor intent of donors to foundations who established scholarship funds with specific conditions that foundations must satisfy,” he said. “So, it's not just an annoyance for foundations, it's a legal and ethical issue for our field.”

CMF staff and members continue to meet with state stakeholders, reach out to regional partners and engage prospective college students – all of whom are also trying to understand and abide by stringent federal financial aid regulations.

CMF will highlight scholarship displacement as a priority issue during Foundations on the Hill, a two-day event happening March 9-11, that brings together hundreds of foundation leaders from across the country to Washington, D.C. to meet with Congress to discuss topics of critical importance to the philanthropic community.

Maryland is the only state in the country to amend state law to prohibit scholarship displacement at public institutions. However, a rise in advocacy campaigns, student activism and public statements from universities suggest momentum is gaining around the issue.

Hajra remains hopeful that those concerned about scholarship displacement will find a solution and encourages Michigan’s philanthropic community to stay engaged in the conversation to help universities understand that the work must be done in respectful partnership.

“This is a key moment for our field because the more institutions we're able to align and mobilize, the more likely we'll be to secure commitments by universities and financial aid offices to mitigate scholarship displacement,” Hajra said.

If you or someone you know has personally been affected by scholarship displacement and you’d like to participate in the MCFYP outreach campaign, or to learn more, please contact CMF’s public policy fellow Olivia Lewis at [email protected].

 

 

Michigan’s Philanthropic Community Encouraged to Get Involved in PFAS Awareness, Education

As CMF has reported, per-and polyfluoroalkyl substances, otherwise known as PFAS, have been found in Michigan’s drinking water, lakes and rivers. The man-made chemicals can also be found in food, commercial household products and living organisms. The contaminants have been linked to cancer, low birth weight in babies and negative effects on the immune system, but the full extent of negative physical and environmental health effects from PFAS is still unknown.

At the state level, there has been bipartisan support from lawmakers including U.S. Rep. Dan Kildee, U.S. Rep. Rashida Tlaib and U.S. Rep. Elissa Slotkin supporting constituent requests for Congress to take legislative action and encouraging the Environmental Protection Agency (EPA) to raise public awareness on the issue.

CMF became actively engaged in the issue on behalf of Michigan’s philanthropic community after the Green and Blue Network, a CMF affinity group, approached the Public Policy Committee (PPC) and Executive Committee to lift up concerns about PFAS contamination. Both committees approved a resolution to adopt standards against PFAS for the protection and improved health of people and their communities, seeing PFAS as a public health, environment and equity issue in Michigan.

This isn’t the first time CMF’s Board of Trustees approved a resolution regarding water contaminants. Following a recommendation from the PPC, the Board approved a resolution in 2016 to support nutrition, education, and mental and physical health needs of Flint residents following the Flint water crisis.

Be sure to check out our March 3, 2020, edition of The Weekly Download for the latest news on the status of the state’s proposed PFAS rules.

While PFAS has been found in both urban and rural areas, Tim Eder, a program officer at the Charles Stewart Mott Foundation and co-chair of the Green and Blue Network (GBN), said he is particularly concerned about the potential long-term effects for communities of color and low-income areas.

“Oftentimes people of color and disadvantaged communities have had exposure to more sources of contaminants than others,” Eder said. “There (can be) a disproportionate rate to contaminants and often their voices are discounted from public officials, they aren’t always given the credence and credibility that they should receive.”

Now the Green and Blue Network is encouraging more foundations to be part of the learning process, calling the issue both alarming and urgent.

Eder specifically suggests community foundations get involved because they are often seen as respected leaders in their communities, have the power to elevate local voices and can educate city, county and state officials while encouraging them to take issues like PFAS seriously.

“We felt this was something CMF and the foundation world could help bring more education, more focus and make our public officials more aware and more accountable,” Eder said. “It needs to be addressed.”

GBN held a series of convenings for members in 2019, including a breakout session at CMF's Annual Conference, in hopes of building greater awareness. Eder believes it’s imperative to begin talking about this issue now.

“The whole approach that this country takes to regulating compounds like this is fundamentally flawed,” Eder said. “We don’t require testing before these chemicals are used or released, we only react when problems show up.”

John Erb, chairman and CEO of the Fred A. and Barbara M. Erb Family Foundation and co-chair of GBN, said even though PFAS is a nationwide issue, Michigan has been put at the epicenter.

“Fresh water defines the state of Michigan and keeping it clean and safe is essential for our health, the environment and the economy of our state,” he said.

The Green and Blue Network co-chairs suggest that Michigan’s philanthropic community can get involved by responding to community needs in a variety of ways, including assisting with local organizing efforts, making elected officials aware of the problem and listening to neighbors who are facing contamination to understand their needs.

If you or your foundation are interested in learning more about PFAS and working with the Green and Blue Network, consider attending their next members-only convening in Lansing on March 25.

 

Limited Time Left to Advocate for Independent Redistricting Commission That’s Representative of Michigan’s Population

Michigan’s Office of the Secretary of State continues to accept applications for potential members of the state’s first Independent Redistricting Commission. The commission will determine how district lines to vote for state representatives will be chosen for the next 10 years. Michigan’s constitution requires voting district lines be redrawn to accurately represent the population following every decennial census.

Creation of the Independent Redistricting Commission followed a grassroots campaign to get proposal two on the November 2018 ballot. CMF’s Public Policy Committee and Board of Trustees supported resolutions in favor of the ballot proposal, which transferred the power to draw the state's congressional and legislative districts from the state Legislature to an independent redistricting commission.

Whether the commission will accurately represent the state’s population is still unknown.

The application opened in late 2019 and will remain open through June. The intent is to have an application pool that is reflective of the state’s demographics. Here you can see detailed information on the application pool thus far.

Michigan’s philanthropic community provided substantial support for education and outreach to hard-to-count populations for a complete count in the 2020 census. CMF and Michigan Nonprofit Association (MNA) have heard from nonprofit and philanthropic leaders interested in similar investments for ensuring diverse representation on the commission and broad participation in developing inclusive maps.

The redistricting commission’s June application deadline leaves just a few months for Michigan’s foundations to advocate for further education and outreach to encourage registered voters to apply.

The commission will be comprised of 13 randomly selected Michigan registered voters who cannot be legislators or otherwise disqualified based on a number of criteria outlined in the state’s eligibility guidelines.

The commission is expected to begin working this fall and will have one year to determine district lines, which will be used for elections in 2022. While the initial applicant pool must be representative of the state’s population, the speaker of the house, majority and minority leader legislators will have the option to disqualify up to five applicants each before the Secretary of State’s Office randomly selects the final 13 commissioners.

This is an expeditious process compared to states like California that had to extend applications for their commission due to lack of diversity and representation within the applicant pool. Michigan’s laws do not allow an extended application process.

If your foundation would like to join others and learn how to advocate for an Independent Redistricting Commission that represents Michigan’s population, please contact Regina Bell, CMF’s director of government relations and public policy.

 

Bills We’re Watching

CMF has prioritized its public policy focus around state and federal policies that protect the charitable sector and promote the well-being of Michigan’s communities.

These issues require ongoing monitoring and long-term, systemic efforts to make change. CMF staff’s efforts are significantly more impactful when members share stories and become actively involved in the advocacy process. One way for members to become more engaged in government relations and public policy work is to attend Foundations on the Hill on March 9-11 in Washington, D.C. This annual event allows CMF members to educate policymakers on critical issues and advocate on behalf of the sector and Michigan communities. CMF members who have participated in past years regularly say FOTH is among the best professional development opportunities they’ve ever had, as attendees come away with a far deeper understanding of policy and CMF’s government relations goals and why they’re so important to our sector.

Join your fellow CMF members from around the state and CMF staff in D.C. Register for Foundations on the Hill today.

State

Charitable Tax Credit: House Bills 4992 and 4993 would restore the charitable tax credit that allows individuals to donate funds to charitable organizations, specifically community foundations, food banks and homeless shelters and receive a tax “credit.”

What We’re Doing: The bills were referred to the House Tax Policy Committee which held a hearing in December. Three CMF members testified before the committee while others submitted written statements and made calls to their representatives. CMF continues to advocate for restoration of the tax credit and will be seeking member support in getting this across the finish line.

Census 2020: The census will be released online on March 12 followed by paper mailings to households. Census data is used to determine the number of representatives Michigan has in Congress and informs the distribution of revenue for critical programs and services used by Michigan residents. Although additional federal funding was secured for census outreach, many Michigan communities remain at risk of being undercounted. The census is a vital part of an engaged citizenry and benefits all Michigan communities.

What We’re Doing: CMF sits on the Governor’s Complete Count Committee and continues to support and amplify the work of the Michigan Nonprofits Complete Count Campaign led by the Michigan Nonprofit Association by hosting quarterly meetings for foundations who contributed to the campaign. There are 13 hubs across the state working with 170 local complete count committees through local, trusted nonprofits to ensure communities are engaged, educated and empowered for Census 2020.

What You Can Do: Commit to filling out the census form and encourage your networks to do the same, including your foundation colleagues.

Federal

Excise Tax: For 20 years, private foundations paid a 2% tax on their net investment income, called an excise tax. CMF and its national partners lobbied to reduce the rate to a flat 1%, and while that level has not yet been reached, private foundations saw success in a December 2019 change that resulted in a 1.39% rate.

What We’re Doing: Celebrating the reduction in rate and continuing to push for the flat rate of 1%. The excise tax was originally brought forward by Bill White, former president and CEO of the Charles Stewart Mott Foundation. The foundation funded an initial study on the impact of the excise tax on independent foundations which found that the cost to calculate the variant tax rate was exceptionally high.

Census 2020: H.R. 3645, known as the Correct the Census Count Act, was introduced to the House and would amend title 13 of U.S. Code to attribute the last place of residence before incarceration as address for current individuals in prison. The bill was introduced by Rep. Lacy Clay of Missouri; Rep. Rashida Tlaib is one of 29 cosponsors to the bill.

.ORG Domain: The Internet Society reached an agreement with Ethos Capital in December 2019 under which Ethos Capital would acquire Public Interest Registry (PIR), the company that owns the .ORG domain. Concerns have been raised that as a private equity firm, Ethos Capital could raise annual .ORG domain prices by more than 10 percent while also potentially increasing the threat of censorship.

What We’re Doing: CMF’s Public Policy Committee approved a resolution opposing the sale to Ethos Capital, followed by a resolution from the Executive Committee. We also signed on to a SaveDotOrg campaign which now has over 800 organizations and 24,000 individuals expressing their opposition to the sale of .ORG.

What You Can Do: Join over 800 organizations in signing the online petition to oppose the sale of the Public Interest Registry to a private equity firm.

Information on ongoing bills can be found in previous Policy Brief Editions: February 2019, May 2019, and October 2019.

 

Potential Changes from the Governor’s Office Regarding Early Childhood in 2020

By Stephen Arellano on behalf of the Office of Foundation Liaison

While there have been encouraging developments over time, Michigan’s early child care system still has a long way to go. Michigan lacks adequate support for working parents, there aren’t enough child care providers and of those that exist, employees aren’t fairly compensated – all consistent barriers to preparing Michigan’s children for school.

At the outset of Governor Gretchen Whitmer’s administration, CMF and the Office of Foundation Liaison (OFL) knew early childhood education would be a priority. OFL has the privilege of a continuous presence in the governor’s office and serves as a consistent voice through the long arc associated with systems change and policy work. In December 2018, OFL hosted a transition meeting for CMF members to hear from then-incoming Governor Whitmer’s staff, who shared her desire to develop a plan for universal preschool and expand Great Start to Readiness (GSRP).

Universal preschool and raising eligibility/reimbursement rates for child care were identified as top priorities by CMF members in an OFL survey. With this clear signal of alignment, OFL sought opportunities in 2019 to strengthen the network connections, deepen the statewide discussion on early childhood and enhance ongoing efforts through partnership.

These efforts have included collaboration with the Early Childhood Investment Corporation (ECIC), Michigan’s Children and the Michigan League for Public Policy (MLPP). CMF members were also invited to provide input into the development of a statewide policy agenda on early childhood as part of a Pritzker Children’s Initiative (PCI) planning grant and integrated these discussions with a parallel planning process at the Michigan Department of Education for the federal Preschool Development Grant Birth to Age 5 (PDG B-5). These planning efforts were both tied to opportunities for Michigan to compete for implementation funding.

Michigan’s request for funding through PCI has been submitted and is under review. Michigan Department of Education (MDE) announced in January it had received a three-year $40.2 million award to “further guide systemic efforts and coordinate the state’s early childhood programs.”

In 2018, CMF’s Public Policy Committee developed and approved a letter to then Governor Rick Snyder and the speakers of both legislative chambers urging increases in child care subsidy eligibility and provider reimbursement. The result was a modest increase from 125% of the federal poverty limit to 130% - and left Michigan ranked among the bottom five states.

This year, OFL staff anticipates a proposed increase to child care subsidy eligibility (from 130% to 150% of the poverty level), additional early childhood funding and an emerging strategic plan from MDE during the governor’s second budget presentation to the Legislature, all creating great potential for positive change for Michigan’s working families and their young children.

Additionally, eight months into the Whitmer administration, Dr. Michael Rice began his new role as state superintendent of public instruction. While Rice’s formal strategic plans are still under development, he gave indication that early childhood will be among his top priorities. Rice’s plans are important to consider as the governor goes into her second budget process.

To successfully make another positive step in early childhood education, state government must continue to hear from child advocates, supporters of working families, citizens and influential sectors like philanthropy and business.

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