Mackinac Policy Conference Review

Last week, the Detroit Chamber of Commerce held its annual Mackinac Policy Conference at the Grand Hotel on Mackinac Island. Donna Murray-Brown and I were fortunate enough to attend the conference this year on behalf of MNA. One difference in the conference this year, was the lack of lawmakers. Michigan legislators stayed behind in Lansing to put the finishing touches on the FY’12-13 state budget.

This year’s theme was on making Michigan and Detroit a place for global competitiveness. To help attendees think about Michigan in a global setting, the Detroit Chamber had two very high-profile foreign affairs experts, Fareed Zakaria and Thomas Friedman. Both had very similar messages, Michigan and the United States can no longer think of itself as the sole “super power” on the global stage – both in foreign policy and economic progress. Both Zakaria and Friedman came to the same recommendations, improve US infrastructure (including wireless deployment), open up immigration policy, and invest in K-16 education. Detroit Public Television has both sessions on their website, you can view each of them here.

Fareed Zakaria and Thomas Friedman were not the only ones touting the need for Michigan to invest in the future. Numerous keynote speakers and panelists also reiterated the point: if Michigan is going to succeed, it must invest in the future.

One slightly low point of the conference was the “Fab Five” panel, where the leaders of Macomb, Oakland, Wayne, and Washtenaw counties, and Detroit Mayor, David Bing discussed regional collaboration. There was much more of the usual bickering around turf and who should pay for what, instead of broader discussion of a vision of what regionalism looks like for the Detroit area, which would have built upon what the other keynote speakers proposed. There is always next year…

 

Submitted by Christina Kuo, Senior Director of Public Policy and Public Affairs, Michigan Nonprofit Association

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

Small Steps

Many advocates wonder if their efforts are making a difference. Those of us in the engagement business often measure success by the number of individuals who take action or by the various laws or policies that are changed as a result of our mobilization efforts. Then there are times when success is measured by what doesn’t happen or by extremely small, but extremely important, steps.

Making changes to Michigan’s redistricting process is one of those difficult mobilization efforts for which successful actions may be difficult to realize. The Michigan Redistricting Collaborative has been working hard to ensure that lawmakers seek the input of the public as the lines for voting districts are redrawn. A decade ago, lawmakers were working in private conference rooms to cut deals and draw maps to secretly preserve incumbencies among both Republicans and Democrats. Once finished, the maps were hastily passed through both chambers of the Michigan Legislature, quickly signed into law, and even debated in court filings before the entire process and map formulas became public.

Ten years later the overall process remains the same. The Legislature gets to draw its own maps provided it remains within the general rules laid forth by the Michigan Constitution, Michigan Supreme Court cases and those requirements provided for by the Voting Rights Act. Within these boundaries, demographers are helping politicians privately pick their constituents. Members of both parties are working behind the scenes to ensure they are not drawn out of their own district or pitted against a challenger in their own party.

And yet, we know this prior to the final decisions on the district lines, albeit barely before the critical votes. Many of my colleagues involved in the Michigan Redistricting Collaborative are frustrated by the lack of change in the system, the haste with which the Legislature and the Governor are moving to dispense this “insider’s game,” and the general lack of interest by the public in the dysfunctional nature of our Redistricting process in Michigan. So you ask, what did all our work accomplish? We accomplished what we asked our lawmakers to do: we increased the transparency of one of the most covert, public processes in Michigan.

At www.DrawtheLineMichigan.org you can see the media traffic over the past two months as lawmakers were asked how the maps would be drawn, what input the public would have on the process, which lawmakers would be making the decisions, and what the impact would be on vulnerable populations. Read the quotes from the leadership in the House and Senate where Senate Majority Leader Richardville and House Speaker Bolger were asked to explain how public comment would be sought and how this time, the process would be different. Look at the work that individual citizens did to draw their own maps using the common electronic media and public information tools available to anyone.

This week we will see quick passage of the legislation that will define the voting boundaries for Michiganders for the next ten years. While many may not like either the outcome or the process used, we can take solace in knowing that we brought the process into the light and injected the important principles of transparency, citizen engagement, competitive districts, and fairness into the debate over redistricting. These small victories may not be what many had hoped for in helping to form our more perfect union, but it’s an important start.


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

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The Path of Least Resistance?

What do voters think about the current budget debates at the state and federal levels? If we go by the major headlines, we want cuts to the public budgets and no new taxes. Or do we?

Now that the realities of the proposed cuts are coming into focus, it is unclear if the budgets proposed so far actually meet the expectations of the public that will be impacted by the changes. Such is the nature of major change—it all looks good from afar, but when it comes to our own sacrifices, we see ours as too large and others as too small.

The gridlock at the federal level with the near-federal government shutdown will be amplified as Congress and the White House debate the 2012 budget. But we are now realizing the cuts of the current budget compromises. Included in those, hidden away in the obscure portion of the Labor Health and Human Services budget, is a small dollar amount cut with large implications—the elimination of funding for Learn and Serve America funds. These are important dollars that help young people not only learn experientially (especially important for those “hard to reach” students), but also promote the school climates we all agree are important to quality learning.

At the state level, a small cut of $675,000 in the massive Department of Human Services budget will not only eliminate all support for the Michigan Community Service Commission, but also turn away more than $13 million in federal funding for national service programs all across Michigan.

To balance our state budget, lawmakers are proposing the elimination of tax credits that have leveraged millions to help local communities through community foundations, food pantries, homeless shelters, arts organizations, and colleges and universities.

Do voters really believe that eliminating support for sound, proven, affordable (bordering on cheap) programs that solve problems that government cannot afford to address directly makes any sense? We may never know, because there is little talk about what the voters actually want.

The Center for Michigan has been working hard to identify what Michiganders want to see in a Michigan budget, but few if any of their suggested reforms have received enough support. They have even developed a tool for citizens to identify how they would balance the budget.

A flood of recent polling indicates that voters are not supporting many of the proposed cuts to programs. Slate Magazine reports all political ideologies oppose the cutting of Medicare – 92% of Democrats, 73% of Republicans, 75% of Independents, and 70% of Tea Party Members. Regarding revenues, the recent Gallop poll shows that Americans do not want lawmakers to remove charitable incentives.

Clearly there is a strong sense that people know that changes are necessary, but the proposals on the table are largely looking to impose change on those least likely to present strong opposition as opposed to changes the voters are telling pollsters they would like to see.

At no other time is the voice of the nonprofit sector more necessary than now.


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

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Proposed Cuts Would Undermine Nonprofit Sector’s Work

The status of the state budget in Michigan has been a hot issue over the last few weeks, as legislators work to create a balanced budget. While we know that some cuts are inevitable and that shared sacrifice is important, the proposed budget cuts to the Michigan Community Service Commission (MCSC) and the total elimination of charitable tax credits will have a negative impact on the nonprofit sector as a whole.

If funding for the Michigan Community Service Commission is zeroed out, as the Senate Appropriations Subcommittee for the Department of Human Services proposed, Michigan risks losing $13.3 million in federal funds that are leveraged by MCSC. The elimination of MCSC’s budget, a total of $675,000 per fiscal year, is not worth losing those federal funds – the math simply does not make sense. MCSC brings money into Michigan while providing important services for the community, like placing more than 1,200 AmeriCorps members who work tirelessly to strengthen Michigan communities.

The governor’s proposed budget also includes another big hit to nonprofits: the elimination of charitable tax credits. This proposed tax plan, which includes this budget cut, just passed the House by a slim margin and will move to the Senate for a vote. The state’s potentially small gain in revenue (less than $50 million/year) will be dwarfed by the negative impact of denying nonprofits of the leverage they need to multiply and diversify their donations through individual giving tax credits. Without providing encouragement for donations, Michigan’s nonprofit sector will see less charitable giving, further straining their efforts to assist and develop Michigan communities.

With these devastating proposals looming, organizations and individuals throughout the state need to tell their legislators they oppose these budget changes that will negatively affect the nonprofit community. Decreasing nonprofits’ capacity to serve communities is not the answer to the budget problems in our state.

Michigan Nonprofit Association is spearheading the effort to get organizations and individuals to sign-on to two separate letters – one opposing the elimination of charitable tax credits and the other to oppose the elimination of funding for MCSC. You can view both letters, and sign on to them, by visiting http://www.mnaonline.org/proposedbudgetcuts.aspx.

Undermining the nonprofit sector is not a successful strategy for the state’s budget. We encourage you to sign-on the letters to tell our lawmakers to oppose the elimination of charitable tax credits and the zeroing out of MCSC funding!

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

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A Budget Challenge on Three Fronts

Is Michigan a Nonprofit-friendly state and why does it matter? This is our sector’s most important question as we face a three-front fiscal crisis. The three fronts are the budget shortfalls at the federal, state and local levels; challenges in government contracting and granting; and skyrocketing need levels that have not been seen for some time.

Michigan’s current projected budget gap for FY 2012 is $1.8 billion, placing us in the top 20% of the 45 states projecting shortfalls. The Recovery Act Funds are drying up now with the reduction of the $98 billion invested from FY 2009 to FY 2011 to a projected $6 billion for FY 2012. The U.S. Senate is debating on whether to cut $4.7 billion or $57 billion from the current budget for the remaining six plus months of this fiscal year. That debate is largely seen as setting the stage for how the FY 2012 debate will be waged as the Congress and President declare each others’ budget as unrealistic. These budget challenges combined with the stresses placed on nonprofits through the proposed repeals of Michigan tax credits make the public/private partnerships difficult for nonprofits to continue.

An increasing number of nonprofit organizations with federal, state, and local contracts report a strained government partnership. Some report that governments are failing to make payments for services performed under contracts, forcing the organizations to make painful cuts to programs, services and staff. In light of the budget cuts in revenue sharing and other public sources, local government agencies are withholding reimbursements, rescinding agreements altogether, or imposing other financial burdens that harm nonprofits. This challenging relationship is exacerbated by the fact that generally government contracts simply don’t cover the full cost of providing services. This is proven in our own look at the Michigan landscape.

MNA data reveals that 45% of nonprofits experience delays in scheduled government payments. In addition, when organizations were asked to identify specifically where the delay in government funding was occurring: 39% reported delays at the local level, 26% reported delays at the state level, and 16% reported delays at the federal level. We also found that 49% reported raising less financial/in-kind support in 2009 compared to previous years. Beyond budget cuts, nonprofits struggle to provide vitally needed services to a growing population with more constraints and few resources.

The final conspirator is the growing levels of need. Let’s agree to set aside for the moment the effects of the recession including the job loss, record foreclosure rates, and persistently high unemployment rates. There are other huge issues including the unpaid pension and healthcare liabilities on the state’s books. Michigan has a growing need with the aging of the Baby Boomers and the now projected decline—not stagnation, but decline—of population growth and thereby working taxpayers. While Michigan’s 1.9 million who depend on Medicaid are spared the budget axe in Governor’s Snyder’s FY 2012-2013 budget proposal, they are still expected to grow in numbers at an alarming rate that may exceed our ability to provide them healthcare coverage. This will lead to more elderly, children and vulnerable populations looking for help elsewhere, especially local mission-driven nonprofits concerned with the health of our communities.

These are reasons we should care. As a sector, we should begin to call for policy makers to build a fertile landscape for an effective, engaged, relevant and understood nonprofit sector. We need to demand that the state’s policy climate be supportive of the sector that is one of the leading economic engines, employs one in ten workers, and includes the assets our state will need to lead to our economic transformation—education, healthcare, arts & culture, and environmental stewardship. These are the reasons that every Michigander needs to call for Michigan to be a nonprofit-friendly state. It’s what will be at the forefront of our reinvention.


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

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Governor Proposes Changes that Affect Nonprofits

Governor Rick Snyder unveiled a bold and politically charged budget proposal last week. The proposal calls for a flat income or profit tax on businesses (in place of the MBT), taxing of pensions, elimination of the homestead provisions, and a myriad of cuts to social services and education programs and institutions. Governor Snyder’s budget also included the rolling back of decades work to make Michigan one of the nation’s most Nonprofit Friendly States. Michigan has a proud tradition of giving and volunteering:

• nearly half of all citizens volunteer,
• 85% donate financially to nonprofits,
• nearly 90% see charities as important to the quality of life in Michigan,
• 93% say the need for nonprofits is greater today than in the past, and
• nine out of ten believe that charities should retain their tax exemptions.

Over the past three years as our state’s manufacturing, retail, and government sectors have struggled and declined, only one sector was hiring and growing–the nonprofit sector.

• One in ten workers in Michigan is employed by a nonprofit.
• During the recession, employment in the nonprofit sector grew by 14%.
• Wages increased among workers in the nonprofit sector by 2.7%.

While growing, the sector has not been able to meet the overwhelming demand for services brought on by persistently high unemployment, record levels of foreclosures, stalled business investment, and tight money markets. Individual giving is especially challenging to maintain in a climate of constrained discretionary income levels. Nonprofits are also working to deal with the challenges of government where payments are late and fail to cover the full costs of services provided.

Given this growth, our state’s long tradition of public/private partnerships, the tools we’ve developed to encourage growth in individual philanthropy, and the challenges of government grants and contracts, it is difficult to understand the rationale behind the Governor’s budget choices.

In addition to the tax changes for seniors and businesses, the Governor proposed 15%+ cuts to the 15 public 4-yr. higher education institutions, over $400 per pupil cuts in K-12 funding, the budget calls for the all out elimination of the majority of the charitable incentive tools Michigan nonprofits use to support vital services to Michigan residents. They include:

• Earned income tax credit (a Michigan companion to the national credit) – $353.8 million
• Gifts: public art, radio, colleges, universities, archives, museums, libraries credit – $24.8 million
• Community foundations, $3.4 million
• Food banks and homeless shelters credit – $21 million
• College tuition and fees credit – $4.8 million
• Automobile donation credit – $100,000
• Energy efficient home improvement credit – (figures not available)
• Historic preservation credit – (figures not available)

In just the areas we can calculate right now, the nonprofit sector will be taxed a total of $54.1 millionin this budget year alone. This excludes the energy credit, preservation credit, both of which go to support areas in which nonprofits are essentially the only service providers, and also leaves out the Earned Income Tax Credit ($353.8 m) which goes to the individuals only nonprofits, in partnership with government, serve – the working poor. It also omits any local government financial challenges that will be thrust upon nonprofits as revenue sharing is cut nearly in half in the Governor’s budget. And, of course this calculation omits the loss of leveraging power nonprofits will suffer when Michigan donors realize our state tax credits as incentives to give are gone (with the exception of a few targeted for veterans and special needs children).

The Governor and members of the legislature have difficult choices to make. Michigan’s structural deficit has long been the can kicked down the road and the end of the road is here. Michigan’s nonprofit sector will be called upon to make sacrifices for our future financial security. No one should operate under the illusion that they will be spared the budget axe during this important time in our state. As a sector, we need to decide if Governor Synder’s proposal properly defines the sacrifices we want to make or if there are more sustainable and ultimately healthier choices we can make to help in Michigan’s economic recovery.


Submitted by Kyle Caldwell, president and CEO, 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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Looking Forward in Michigan

The vision that our leaders have for the Michigan we want may well be shared next week. The role the nonprofit sector plays in that vision is not yet clear.

Governor Snyder is scheduled to release the long-awaited budget which will forecast his priorities for the next two years. While Governor Snyder’s administration has largely been quiet on the details, Thursday night at the Michigan Political Leadership Program annual dinner, he did share that his budget will be fair, simple and be designed for the needs of real people. The Lt. Governor has suggested that the cuts in the Governor’s budget plan will be significant. The Governor has also presented a citizens guide to the budget that lays some of the assumptions his budget will be based upon.

Congress is working to settle two budgets while it works to settle the unresolved current fiscal year issues (which we are five months into already), and is also working to set up the budget for the next fiscal year that begins October 1, 2011. The House is starting the process with a number of bills based on the Republican Study Committee reports calling for $100 billion in cuts. Included in these projected cuts are programs that the sector needs to serve the most vulnerable among us including the Michigan Earned Income Tax Credit and the Corporation for National and Community Service.

Both state and federal elected officials must balance their visions for a future Michigan and nation with the realities of budget deficits, high unemployment and foreclosures, and an electorate ill-disposed to repealing tax breaks or calling for tax increases. Something – a lot – must be cut. That is both our reality and our apparent current vision.

What is the role of the nonprofit sector in this new reality? It is unclear. Some are working to advocate against cuts and illustrating the impact of budget-tightening measures, while others are calling for more cuts and large restructuring of what government should do. Even others are joining MNA, as we are calling for more openness and transparency to the very important decisions elected officials are making. Yesterday, MNA launched the Michigan Redistricting Collaborative with the unveiling of the collaborative’s new website www.drawthelinemichigan.org. What a tremendous contrast! These nonprofits are important. Each of these is vital to our state’s overall future. Each demonstrate important roles for the sector and represent our diversity, depth and significance.

Our elected officials will introduce a wide range of proposals to define our future in Michigan. Their decisions will impact our work in significant and often negative ways. As a sector, we must leverage our collective power, voice and diversity to help create the vision for Michigan that looks forward and fulfills the mission of the sector that is a core component of a healthy republic based on democratic values. Those values will be reflected in the budgets we allow to pass at the state and federal levels. What will be our vision?

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

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Resource Friday: How to determine Hard-to-Count Communities for 2010 Census


Do you live or work in a hard-to-count community?
With census forms hitting mail boxes this month, census activities across the state of Michigan are in full swing. The Community Research Institute (CRI) at Grand Valley State University and the Detroit-Area Community Information System (D-ACIS), in collaboration with the Michigan Nonprofit Association, developed the Michigan 2010 Census Planning Web site to assist organizations throughout the state in targeting census outreach efforts by geography and particular demographic segments where mail non-response is anticipated to be low.

What is a Hard-To-Count Score?
Every census tract in the country was assigned a “Hard-To-Count” (HTC) score, summarizing the “measured” degree of enumeration difficulty, based on the 12 variables most highly correlated with non-response rates in 1990 and 2000. HTC scores can range from 0 to 132. The higher the score, the more difficult enumeration is expected to be. Areas with the highest scores (e.g., over 70) are likely to be the areas with relatively high non-return rates and undercount rates while areas with the lowest scores are likely to be areas with low rates.

We encourage you to check out the Michigan 2010 Census Planning Web site to help you determine if your community’s hard-to-count score.

For more information about the 2010 Census and how nonprofits can help ensure a complete and accurate count, visit www.MNAonline.org/census.asp.

Submitted by Sam Singh, Census Consultant for Michigan Nonprofit Association.

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