Despite differences, education is central to both State and Federal Budgets

These past few weeks have demonstrated the challenges of creating sound, effective budgets at the state and national level. The Michigan and federal budgets, however, paint two very different pictures of the health of their constituents.

The recession over the past four years has not been kind, but there seems to be a glimmer of hope in Michigan. After several consecutive years of painful cuts, it appears the financial outlook is more optimistic with 2012’s budget surplus. Education funding increased by 0.2%, public safety funding is also set to increase, and the “Rainy Day” fund will grow by an additional $130 million, according to the State Budget Office. At the Federal level, by contrast, the deficit still weighs heavily on programs most Americans take for granted, but rely on – the President offered a 52% decrease in Education, a 35% decrease in Labor, and slight increases for Health and Human Services (3.7%) and the Corporation of National and Community Service (1.3%).

Still, there are some common commitments between the two budgets, such as improving performance and affordability of education. President Obama promotes a ‘Race to the Top’ and links financial aid to universities that keep their tuition under control. Governor Rick Snyder also wants to link increased spending in education to improved performance, best practices, and college tuition restraint. And they are politicians from two different parties.

Despite the other differing priorities of the two budgets, it is clear that superior education for future generations must be a priority for education beyond high school. Whether it is community college, traditional four-year, or vocational – higher education has become increasingly important to achieve personal financial security.

Submitted by Michelle Eichhorst, Public Policy Fellow for Michigan Nonprofit Association

Save Service, Change Lives

Serving as an AmeriCorps member changed my life. I graduated from college at the beginning of the 2008 recession and AmeriCorps was one of the only jobs available to me. Little did I know that my time serving at a small community art center would impact my career path choices. I found such meaning and gained so many skills from my service that I have chosen to stay in the nonprofit sector, now working with the Michigan Nonprofit Association. This program opened doors for me, and now the federal government is considering cutting the funding. These are valuable programs. They make differences in the lives of your friends, neighbors and community. Please show your support for these programs. Below you will find an email circulated by Save Service, the campaign striving to protect this incredible resource in our country. Follow the steps and do your part to keep national service a part of our country’s legacy.

It’s time to Make the Call! Take five minutes RIGHT NOW and dial 1-855-US-SERVE (1-855-877-3783) to be connected directly to your US Senators and ask them to save funding for the Corporation for National and Community Service.

Your voice is your vote for national service; with just days to go before the next continuing resolution runs out, we need our Senators to know their constituents continue to see this as a vital community resource that must be protected in final negotiations for the FY11 budget.

Tell them that cutting AmeriCorps, Learn and Serve and Senior Corps – cost-effective, highly-leveraged programs – will jeopardize jobs, economic investment and services in your state. Tell them how the opportunity to serve has made a difference in your own life, or how you’ve seen it make a difference in your community. Tell them in these final hours, we need their leadership and support on this issue now more than ever.

As a reminder, visit for talking points, voting records, and more.

Then follow these easy steps:
1. Dial 1-855-US-SERVE (1-855-877-3783) … It’s free and easy and will connect you directly to your Senator’s office.
2. Hang up and Call 1-855-US-SERVE a Second Time … you have two Senators!
3. Recruit a Friend to Call. Promote that you called on your Facebook page!
4. Let us know you Made the Call. Visit our reporting page.
5. Forward this email to your networks!

This week is critical for us to demonstrate yet again the strength and power of the national service community. Thank you for making the call, and for all you are doing to help us Save Service in America.

For more specific information on how these service programs affect Michigan, check out the MNA website:

Submitted by Jessica Swisher, Administrative Assistant, Membership and Advocacy for the Michigan Nonprofit Association.

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Support National Service Funding

Last week the U.S. House of Representatives announced they will begin looking at a Continuing Resolution, or a short-term budget that will fund the last 7 months of Fiscal Year 2011. This proposed bill will immediately cut $100 billion from the federal budget, and there have been reports that the bill will eliminate funding for programs of the Corporation for National and Community Service, including AmeriCorps, Learn & Serve, and Senior Corps.

Flickr photo by ginnerobot

On Monday, the President announced his FY12 budget, which includes $1.3 billion for the Corporation, an 11% increase above FY10 enacted levels ($1.149B). This increase will support a small growth in AmeriCorps to 90,000 members and will fund the education award at $5,550/fulltime members. There is also a small amount of demonstration dollars for Senior Corps programs.

What Does this Mean?
The President’s support of National Service Funding most likely means that the majority of Democrats will vote in favor of the President’s request, whereas the majority of Republicans will be a harder sell. Most advocacy efforts will be directed towards Republicans in both the U.S House and Senate to garner bipartisan support of National Service Funding.

Why Does this Matter?
– National Service Funding is one of the largest volunteer mobilizing resources available to nonprofit organizations which is vital to their mission
– National Service Funding provides over $6 million in federal support to Michigan for AmeriCorps and Learn & Serve programs alone; the matching funds of these federal dollars by companies, foundations, and other sources would be lost
– More than 2,000 Michiganders would be forced to seek alternative forms of employment as a result of the elimination
– 320 Michigan organizations, representing all 83 counties, would be affected by the elimination including schools, homeless service agencies, and community health centers

How Can You Help?
Call your member of Congress– we need to reach every single member of the House of Representatives! Urge them to vote NO on a continuing resolution that eliminates funding for the Corporation for National and Community Service.

Click here for more information on why it’s so important to call your member of Congress.

Submitted by Katie VanderVeen, Public Policy Fellow for Michigan Nonprofit Association.

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Health Care Reform – Small Nonprofits Can Start Claiming Credit Immediately

With the President’s signing of the Patient Protection and Affordable Care Act on March 23, 2010, all qualified small employers – both nonprofits and for-profits – can immediately claim a tax credit when they pay for at least half of the health insurance premiums for their employees. The full credit will be available to employers with 10 or fewer workers with average annual wages of $25,000, while firms with up to 25 or fewer employees and average annual wages of up to $50,000 will be eligible for part of the credit.

How It Works
The small employer credit will help all small employers (defined as 25 or fewer employees and average wages below $50,000 per year) provide insurance to their employees.

• In Phase I (2010-2013), small nonprofit employers can take a credit (in the form of 25% of the employer contribution for employee insurance premiums) and apply that credit to taxes withheld through payroll (and employees would still get full credit for taxes withheld from their pay).
• In Phase II (2014-onward), the amount of the credit increases to 35%.

The law treats for-profits and nonprofits differently in these respects: for-profits get a higher rate for the credit during both phases (35% in Phase I and 50% in Phase II), but nonprofits can claim the credit each pay period whereas for-profits must wait until year-end to claim an income tax credit, and then, only if they are profitable.

What You Need to Know
The Internal Revenue Service has recently provided tax tips, guides and answers to frequently asked questions on its website. The IRS and U.S. Department of Labor will be issuing official guidance in the future, but, in the spirit of helping people have a better understanding, here are preliminary answers to some initial questions:

What is the maximum health insurance credit amount a nonprofit employer can claim in 2010? If the nonprofit employs 10 or fewer workers with average annual wages of no more than $25,000, the full 25% credit can be applied to the aggregate amount of actual premiums paid by employer (or a lesser average premium amount in the state, as may be determined by the U.S. Department of Health and Human Services). The nonprofit must pay at least 50% of the employee premium to qualify.
How much is the credit if I employ more than 10 employees and/or if average pay is more than $25,000? The calculation of the phase out is complicated and should be determined with the help of an accountant. Here is a general rule of thumb for estimating the benefit of the credit:

Multiply the amount the employer paid in health premiums by the maximum nonprofit credit amount of 25%. Subtract from that amount either of the following calculations if they apply:
• Number of Employees (greater than 10): Start with the total number of full-time equivalent employees, subtract 10 and divide by 15. Multiply the dollar figure in Step 1 by this percentage.
• Average Wages (greater than $25,000): Subtract $25,000 from the average annual wages paid by the nonprofit, and divide that number by $25,000. Multiply the dollar figure in Step 1 by this new percentage.
• Subtract the totals from Step 2 and Step 3 from the amount in Step 1 to determine your credit.

The Patient Protection and Affordable Care Act and what it means for Michigan nonprofits will be a topic discussed in detail at this year’s Nonprofit Day. MNA encourages you to attend this event to stay informed, and take advantage of the credits that have been made available through Health Care Reform.

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One-Time Special Filing Relief Program for Small Nonprofits at Risk of Losing Tax-Exempt Status

The Internal Revenue Service released this press release and video today, announcing that small nonprofits that have failed to file returns for 2007, 2008 and 2009 can preserve their status by filing before October 15, 2010, under a one-time relief program. There are two types of relief available for small exempt organizations:

1. A filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard)
2. A voluntary compliance program (VCP) for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt from Income Tax

The IRS has also published a list of organizations that have return due dates between May 17 and October 15, 2010, but the IRS has no record that the organization filed the required returns for any of the past three years. Check out the list at to ensure your organization is in compliance.

Don’t risk losing your tax-exempt status. File today!

Submitted by Kari Sederburg, director of public policy for Michigan Nonprofit Association.

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How do you measure your impact?

What do the BP oil spill and the nonprofit sector have in common? They both lack real-time data that would provide a true understanding of their impact. We are all thinking about the devastating effects of the oil spill in the Gulf of Mexico and the impact on the environment and economies of communities along the Delta. From the outset in April, journalists were asking for a clear and consistent answer on how much oil was spewing from the broken well pipe a mile below the Deepwater Horizon Oil Platform. No good answers were given because there was no monitoring apparatus that could measure the flow accurately. Now efforts have been taken to better monitor the well flow and understand the long- and short-term impact of this historic tragedy.

Like the BP incident, the nonprofit sector cannot fully articulate its impact, albeit in more positive terms. Other industries and sectors are able to measure, track and communicate their impact in terms that people can understand and hear about on a monthly or quarterly basis. We track employment, crop yields, manufacturing output, construction, even sports in such detail that our newspapers have dedicated whole sections to reporting on their activities daily. Society has placed a significant emphasis on understanding many parts of our world, but far less on the real impact of the work of the nonprofit sector even though we touch everyone’s life in some way every day.

Flickr user: Pink Sherbet Photography

What do we know about the sector? In Michigan, we know that one in ten who are fortunate to be employed work for a nonprofit. The demand for nonprofit sector services is escalating. We know that while there are significant declines in charitable giving, delays in government payments for services rendered, and overall higher costs to doing business; the overall sector grew 2.7% during this most recent recession, was slow to shed jobs, and provided growing wages to its workforce. All this we know about our sector. However this data is from 12-18 months ago and only touches the surface for what we really need to understand our sector. We cannot tell you today what those numbers might be in real time, nor the full impact of our work—all necessary to make real decisions on how to best deploy our resources for the maximum benefit.

Flickr user: Benketaro

There are important questions we should ask. What is the local impact of nonprofits as a sector? What are the monthly unemployment rates for nonprofit employers? What is costs/benefit ratio of tax exemption to community benefit among nonprofits? As the National Council of Nonprofits CEO, Tim Delaney recently put it, “We have a government that can tell us with precision how many iceberg lettuce heads were pulled out of the ground last year, yet it cannot tell us how many heads of individuals were employed by nonprofits. Why are iceberg lettuce heads more valuable than the people who take care of America’s communities?”

Last week, some stepped up to try to address these questions and give nonprofits a voice in the decisions of government. Rep. Betty McCollum (D-MN) announced Wednesday that she will introduce new legislation that will help mold a stronger partnership between the federal government and nonprofit organizations, especially those who have direct influences in the health care and education sectors ( The Nonprofit Sector and Community Solutions Act (H.R. 5533) would strengthen America’s communities by making the federal government a more productive partner with nonprofit organizations by establishing
1) better communication with the federal government,
2) better coordination within government, and
3) enhanced data collection.

Just as we witnessed in the health care reform legislation, nonprofits were left out of the bill until the last minute despite being a major employer—rivaling other small for-profit businesses. That is because policy makers did not understand nonprofits as major employers and economic engines in communities. This legislation will begin to establish federal mechanisms for nonprofits to be at the policy table and give real data to decision making.

We will provide updates through our blog on this important legislation as it develops. In the meantime, please use the free tools MNA has provided to tell our sector’s stories. We have updated data on the economic impact of the sector through the recession, survey data on the economic pressures nonprofits face as well as the important role volunteers play in our work, and state data on the important role of philanthropy through our Giving and Volunteering report that shows Michigan residents continue to give despite our financial challenges. Please use all of these as you talk to decision makers about our work. I truly believe that once we better understand our sector and can effectively communicate our impact, our sector will be well positioned to help lead Michigan’s economic turnaround.

Submitted by Kyle Caldwell, president and CEO of Michigan Nonprofit Association.

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Member Perspective: Advocates for a Brighter Future

Story developed for the Michigan Nonprofit Story Bank.

The Michigan Association of Community and Adult Education is an advocate. The organization believes that everyone can learn, and learning is essential at every age. MACAE acts as a voice for education, and encourages policy that uses education as a vehicle for creating a better Michigan.

In March, MACAE hosted its annual Legislative Day at the State Capitol. Here, educators worked to inform policy makers on the importance of lifelong learning. For the past several years, MACAE has encouraged members to bring students of all ages with them to experience Legislative Day. This helps policymakers gain a better understanding of the issues, and turns the event into a learning experience for students.

“Our students may not have a chance to visit the State Capitol otherwise, and they really are the main reason we need to reach out to our legislators,” said Bob Steeth, Director of Novi Community Education. “It is very important for our elected officials to meet those people who may be affected they most if our programs are not funded at sustainable levels.”

Research confirms that the most formative years of brain development occurs in a child’s first three to five years, and children who participate in high quality early childhood programs are more likely to succeed in school and be contributing members of society later in life. MACAE’s 2010-2011 legislative platform dives deep on these issues of early care and education, and reaches out to include many other education initiatives such as alternative education and English as a second language. MACAE maintains that the best investment we can make is to ensure every Michigan child gets off to a healthy, safe and enriching start.

Sen. Jelinek receives the MACAE State Leader of the Year Award at MACAE's Legislative Day in the State Capitol. Rich Klemm, former MACAE Govt. Affairs Chair, is shown with participating Adult & Alternative Ed Students.

With the budget up in the air, Alexandra Tear, MACAE Communications Coordinator and a former legislative assistant, knows how important events like their annual Legislative Day are.

“It’s important to be present and advocate for these programs,” Tear said. “We have lots of legislators attend this event, all of whom need to hear from their constituents about the things that are affecting them.”

In the area of alternative education, MACAE communicates that as the nation joins the Race to the Top, we are leaving many of our students at the bottom. Recognizing the need for high academic achievement is not enough if we do not also include flexibility in access and delivery for students requiring alternative ways to achieve and succeed.

The Michigan Association of Community and Adult Education will continue to lead in the movement toward inclusive and lifelong education. MACAE has been a MNA member since 2009. For more information about these initiatives, or to learn more about the advocacy efforts of MACAE, visit

Brandon SengSubmitted by Brandon Seng, Director of Member Services for Michigan Nonprofit Association.

If you would like to see your organization featured in MNA Links please submit your story idea to the MNA Nonprofit Storybank: or email Brandon at

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The Future of “Voterized” Nonprofits

Last week I spent time with national leaders involved in the Nonprofit Voter Engagement Network to look at the future of foster “voterized” or civically engaged nonprofits. 2010 begins a year of political activity and civic engagement like few others we will see in this decade making engaged nonprofits important.

The U.S. Census efforts begin in earnest with outreach efforts ramping up to ensure that everyone is counted. With so much at stake for funding and representation, states like Michigan are driving to engage nonprofits and volunteers to preserve our future (see MNA’s Census page). It seems simple, just count everyone. But as the recently published YouTube video, by fictional director Payton Schlewitt, spoofs, it’s easier to describe than it is to conduct. And like any large endeavor, there is controversy. There is the recently release U.S. Census Form “lookalike” letter, and then the concern over the use of the word Negro. These and other issues swirling around can confuse and discourage people from participating in this very important process.

The state election season is beginning as demonstrated by the positioning many are doing to run for offices in the Michigan Senate, House, Governor, Attorney General, Secretary of State, and the list goes on. But this year may be like no other in recent memory with the Citizens United v. FEC ruling by the U.S. Supreme Court. While the rules governing 501(c)(3) nonprofits may not have changed as much, this does change the ability of nonprofits to compete for access and communication to those seeking elected office.

Engaged (or Voterized) nonprofits will be essential as a state working through radical change while ensuring a high quality of life. Michigan Nonprofit Association will work even harder to ensure that nonprofits have the engagement tools they need in this effort.

Kyle CaldwellSubmitted by Kyle Caldwell, President and CEO for Michigan Nonprofit Association.

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What Does Citizens United Ruling Mean for Nonprofits?

The U.S. Supreme Court issued a ruling yesterday in Citizens United v. Federal Election Commission that overturned previous precedent about corporations making expenditures on behalf of candidates for elected office. The Court’s opinion reversed the 1990 ruling in Michigan’s Austin v. Chamber of Commerce case, which prohibited corporate direct expenditures in candidate elections.

Attorneys and legal professionals are still analyzing the full implications of this ruling on all corporations. At this time we understand the ruling to mean the following:

The ruling has an impact on 501(c)(4) and 501(c)(6) noncharitable nonprofit organizations in the state of Michigan, who had previously been able to make endorsements of candidates but been prohibited from making contributions to those candidates. Under this ruling, (c)(4) and (c)(6) noncharitable nonprofits in Michigan would now be able to make independent expenditures in support or opposition to candidates for elected office.

What does this mean for 501(c)(3) charitable nonprofits?
It’s important that charitable nonprofits understand that the Supreme Court’s ruling does not have an impact on 501(c)(3) charitable nonprofit organizations, who are still subject to the rulings of section 501(c)(3) of the IRS code. All 501(c)(3) nonprofit organizations are prohibited from endorsing or opposing candidates for elected office and from making contributions to or expenditures on behalf of a candidate.

While 501(c)(3) charitable nonprofits cannot endorse or oppose candidates or make expenditures on their behalf, they are absolutely allowed to be actively involved in nonpartisan election activity such as voter registration, voter education, candidate education and get-out-the-vote efforts. These activities will be more important than ever in ensuring an active and well informed citizenry within our state and communities, given the increased number of dollars that will become available to individual candidates as a result of this ruling.

Still unsure what this means for your organization?
The Alliance for Justice is hosting a conference call on Monday, January 25 at 3:00 pm EST to discuss the meaning and impact of the Citizens United decision. The call will explain what effect Citizens United will have, discuss potential implications of the case, and answer questions. RSVP to Call-in information will be sent out to confirmed registrants.

Michigan Nonprofit Association, through our Michigan Participation Project, will continue to provide tips and resources to help 501(c)(3) nonprofits incorporate these critically important civic engagement activities into the work that they’re already doing. To learn more, visit or contact me at

*Please note that Michigan Nonprofit Association does not provide legal advice. If you are in need of legal advice regarding this ruling, contact your attorney.

Tiffany AuroraSubmitted by Tiffany Aurora, Public Policy Manager for Michigan Nonprofit Association.

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Reform Impacting Nonprofit Providers of Health Care

The state’s nonprofit sector is wide and diverse and the current debate regarding health care reform could affect all nonprofits. Nowhere is that more evident than with the nonprofit providers of health care. Michigan’s 144 community hospitals care for all patients who walk through their doors, regardless of their ability to pay. While every Michigan hospital is steadfastly committed to improving the health and well-being of their communities, more Michigan hospitals are unable to cover the cost of patient care. And as businesses and individuals struggle with rising health care costs, and more Americans lose insurance coverage, there is increasing discussion about a government solution.

While consensus is growing around models for coverage expansion and consumer protections, disagreements continue over the establishment of a government-sponsored insurance plan (public option), and how to pay for an expansion of health care coverage. Michigan hospitals have long supported expanded coverage for the uninsured and underinsured; however, a health care reform plan must include shared financial responsibility by individuals, providers, insurers, employers and government. As the state’s health care safety net, Michigan hospitals cannot sustain additional payment cuts.

Additionally, federal lawmakers should look to Michigan for examples of voluntary reforms that are well established and have produced measurable results as they continue to draft health reform legislation. The Michigan Health & Hospital Association (MHA) Keystone Center for Patient Safety & Quality, the MHA Patient Safety Organization and the MI Hospital Inform price and quality transparency Web site exemplify successful programs that greatly improve patient safety and quality and reduce health care costs.

As the national reform debate continues, our state’s community hospitals look to the members of the U.S. Congress and President Obama to recognize the work currently under way by Michigan hospitals and support similar efforts to deliver needed and cost-saving changes.

David Seaman

David Seaman

Submitted by guest blogger, David Seaman. David is the executive vice president of the Michigan Health & Hospital Association and member of the Michigan Nonprofit Association Board of Directors.

*As a reminder, Michigan Nonprofit Association is working to help provide information on the health care reform issue. Please visit to find state and legislative proposals, data and research, and media coverage relevant to nonprofits.

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