Our Voice in Setting Good Public PoliciesWhat’s the Relationship Between Government & Nonprofits?

11:30am – 12:45pmF ilit t G B h Th G bl F d tiFacilitator: Gregg Behr, The Grable Foundation

Speakers: Jon Pratt, Minnesota Council of Nonprofits / Jane Werner, Children’s Museum of Pittsburgh / Andrew Yarrow, Independent

SectorSector

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Obama’s 2012 Budget Proposal: How $3.7 Trillion is S tSpent

http://www.nytimes.com/packages/html/newsgraphics/2011/http://www.nytimes.com/packages/html/newsgraphics/2011/0119-budget/index.html

The Federal Fiscal Outlook and th N fit S tthe Nonprofit Sector

2011 Nonprofit SummitPittsburgh, May 12, 2011

Andrew L YarrowAndrew L. Yarrow

At the end of April 2011

Why is Debt Rising?Why is Debt Rising?• Revenues declining, spending increasing

• In downturns, revenues down, spending up

• Rapidly rising health care costsy g

• Aging populationAging population

• Political polarization• Political polarization

Federal Revenues and Expenditures (Obama’s FYExpenditures (Obama s FY

2011Budget Proposal)

Rising Debt is DangerousRising Debt is Dangerous

• Reduces savings

• Crowds out private and public investmentsp p

• Reduces growth, income, jobs

• Makes us more dependent on foreign investors

C ld i “ f h i ”• Could cause investors to “run for the exits”

• Reduces “fiscal democracy”—fewer choices for spendingy p g

The Deficit Reduction Debate, 2011

Proposed Elements of a Budget C iCompromise

Spending Revenues

Limit spending Raise some tax ratesrates

Reform entitlements Reduce tax expenditures

Budget rules New taxes (e gBudget rules New taxes (e.g., consumption)

Nonprofit Sector Affected by B d P liBudget Policy

• Government grants contracts and• Government grants, contracts, and fees for service

• Charitable deductionCharitable deduction

• Tax exemption

Why the Nonprofit Sector is I S EImportant to a Strong Economy

• 1.6 million nonprofits employ 13.5 million Americans, 10% of work force

• Pay $650 billion in wages and salaries in the U.S.

• Annual charitable giving is $303.8 billion g g

• Generate $1.4 trillion in revenues and spend $1.3 trillion

Fo ndations contrib te o er $42 9 billion ann all• Foundations contribute over $42.9 billion annually

• Seven out of 10 households give to charitable causes

The Nonprofit Sector at RiskThe Nonprofit Sector at Risk

• Federal spending cuts• Federal spending cuts

• Tax reform• Tax reform

• Challenges to gthe exemption

Spending Cuts and the N fi SNonprofit Sector

F d l di t d fit ’• Federal spending cuts reduce nonprofits’ revenues

• States’ fiscal crises reduce spending, raise ll f t PILOT fitcalls for taxes, PILOTs on nonprofits

• 32 percent of nonprofit sector’s $1.4 trillion in revenues come from government

Proposals to Reduce Tax E diExpenditures

• Tax reform proposals focus• Tax reform proposals focus on cutting tax expenditures

• President Obama: Cap charitable and other deductions at 28 percentand other deductions at 28 percent

• President’s proposed cap could cost charities upPresident s proposed cap could cost charities up to $7 billion a year in giving

Challenges to the ExemptionChallenges to the Exemption

• Calls to quantify the value of the nonprofit tax exemptionp p

E i i hi h h iti d• Examining which charities deserve exemption

• Tiers of charitableness?• Nonprofits’ commercial revenues

S i l t i bl i li ith fit• Social enterprises blurring lines with nonprofits

Tax Policy and Charitable GivingTax Policy and Charitable Giving

• Americans give for many reasonsAmericans give for many reasons

• Tax policy affects size, number, and timing p y gof charitable donations

With d d ti f h it bl ift• With no deduction for charitable gifts, giving would drop by 25 to 36 percent

Incentivizing GenerosityIncentivizing Generosity• Unlike other tax deductions that subsidize

l dit th h it blpersonal expenditures, the charitable deduction provides an incentive for people to give money to benefit othersto give money to benefit others.

• The charitable deduction is a way to enrich communities, not individual taxpayers.

• The power of the tax incentiveThe power of the tax incentive can be seen in the timing of charitable gifts.

• Charitable gifts spike at the end of the year.

• In fact, more than 20 percent of annual online giving occursof annual online giving occurs on December 30 and 31.[1]

[1] “Online Giving Study: Donations Driven by Donor Experience Year-End Gifts and Large-Scale Disasters ”[1] Online Giving Study: Donations Driven by Donor Experience, Year-End Gifts and Large-Scale Disasters.Network for Good and True Sense Marketing, Dec. 2010, reported in Philanthropy News Digest, Dec. 15, 2010.

• Preserve and expand policies that help Americans give back to their communities

• Ensure that all Americans’ choices to participate in and support nonprofits are t t d it bltreated equitably

• Defend government spending for public needsg p g p

• More clearly define charity and the bases for tax exemption

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These Challenges Go BeyondNumbers and Dollars It’s AboutNumbers and Dollars— It s About

Three Pittsburgh Stories of AdAdvocacy

• Children’s Museum of Pittsburgh

• Pittsburgh is Art

• Pittsburgh Association for theAssociation for the Education of Young Children.

IdIdea

Advocate/ChampionAdvocate/Champion

Visit your legislators in Harrisburg and in the community.

Sore feetSo e eet

P tiPatience

++

=

Yippee!

Idea + People + Sore Feet + Patience =Idea + People + Sore Feet + Patience =

A N Child ’ M !A New Children’s Museum!

Impetusp

More impetus- researchp

Creativity

Impetus + Research + Creativity + Sore Feet =

Advocates for the arts.

Research- Messageg

• Children are importantChildren are important• Parents are important• Teachers are important

Quality is important• Quality is important

Methods of Delivering the Messageg g

• E-mailE mail

• Speed dating• Speed dating

More delivering the messageg g

• Big Party• Big Party

• And doing itAnd doing it again (sore feet)

Message + Delivery + Consistency + Sore Feet =

Good policy for kids

Greater Pittsburgh Nonprofit PartnershipGreater Pittsburgh Nonprofit Partnership• Mission is to “strengthen our region by improving the viability, impact

and effectiveness of the sector”.

• Vision: Our nonprofit sector gives citizens greater voice, inspires public participation and promotes a vibrant community.p p p p y

• 300 Organizations from the nonprofit sector.

Idea + data + message + advocates + sore feet =

An enlightened government working on good policy

Thank you.

jwerner@pittsburghkids.orghttp://www.pittsburghartscouncil.org/http://www pghaeyc org/http://www.pghaeyc.org/http://www.forbesfunds.org/gpnp/

Thank you from the Greater Pittsburgh NonprofitPittsburgh Nonprofit

Partnership!a e s p

Workshop EvaluationWorkshop Evaluation

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