June 10, 2022
In this issue...
Let us know: What should we tell NC’s members of Congress about nonprofits?
Take action today: Has your nonprofit experienced late payments on DHHS contracts?
Legislators could consider some nonprofit priorities in state budget
New IRS report finds 42.2 million Americans used Universal Charitable Deduction
Nonprofit Finance Fund survey finds increased need for most nonprofits' services
IRS increases business mileage rate for second half of 2022
Take action: Become a National Voter Registration Day partner
Let Us Know: What Should We Tell NC’s Members of Congress about Nonprofits?
Next week, Center staff will be in Washington, D.C. to meet with several members of North Carolina’s congressional delegation. We’re planning to talk with them about four federal policy solutions that could help charitable nonprofits:
  1. Reinstating and extending the Employee Retention Tax Credit, which provided economic relief to many nonprofits that suffered economic losses during the COVID-19 pandemic;
  2. Restoring and improving the universal charitable deduction, a temporary tax provision that expired last year and helped encourage people to give more generously to nonprofits in 2020 and 2021 (see the fourth item in today’s update for more information);
  3. Increasing the volunteer mileage rate (currently set at 14 cents per mile) to make it more affordable for volunteers to use their vehicles to provide services on behalf of nonprofits; and
  4. Passing the Nonprofit Sector Strength and Partnership Act to give nonprofits a greater voice in policy decisions at the federal level.

Let us know if there are other federal nonprofit policy priorities you would like for us to mention during these meetings or if there are any points you would like us to emphasize on these four issues.
Take Action Today: Has Your Nonprofit Experienced Late Payments on DHHS Contracts?
The Center continues to work with state legislators, the NC Department of Health and Human Services (DHHS), and other nonprofits on legislation (S.894) that would address a variety of issues nonprofits have experienced with their grants and contracts with DHHS, including late contracts, late payments, underpayment for indirect costs, midstream changes to contract terms, and burdensome application and reporting requirements. Here is a more detailed summary of what the bill would do.

The bill was filed because of your advocacy and the advocacy of other nonprofits around the state. Dozens of nonprofits have provided feedback to the Center about these issues, both in response to our action alert earlier this month and in conversations and communications over the last decade. Now, we need your quick help to get legislators and DHHS to work together on solutions to issues of late payments nonprofits are experiencing. Specifically, it would help if you can let us know two things:
  1. We have heard that, since the bill was filed, DHHS has moved quickly to begin making payments to several nonprofits that have had longstanding delays. If your nonprofit had experienced delays and has recently received payments (or notice that payments are on their way soon), please let us know. 
  2. To help DHHS better understand the reasons why nonprofits are getting paid late on their grants and contracts, it would be helpful to be able to identify several nonprofits by name that have experienced late payments. To help us make the case for these reforms, please let us know by Monday, June 13 if your nonprofit has been paid late on your grants/contracts with DHHS and if we can share your nonprofit’s name with DHHS.
Legislators Could Consider Some Nonprofit Priorities in State Budget
In the next couple of weeks, the NC General Assembly will consider changes to the state budget for FY 2022-23. Because the state has a significant revenue surplus, legislators will likely consider several one-time spending increases and additional tax cuts. Lawmakers could include several nonprofit priorities in the state budget, including:
  1. Policy solutions to address challenges that nonprofits face when they provide public services through state grants and contracts. See the second item in today’s update for more information.
  2. Improved access to affordable, high quality child care. The recent National Council of Nonprofits report on nonprofit workforce shortages identified issues related to access to child care as the second biggest reason that nonprofits are struggling to hire and retain staff. NC Child has explained three things the NC General Assembly can do to improve access to child care and early childhood education.
  3. A state tax credit to encourage North Carolinians to give more generously to support the work of charitable nonprofits. As you well know, nonprofits are facing significant financial challenges due to increased demand for services, workforce shortages, and rising prices for goods and services. To help provide some economic relief to nonprofits, the Center is asking legislators to consider adding a new state tax credit for charitable contributions.

The Center will keep you posted on the progress of these three issues – and of any opportunities for you to make your voice heard on them – in these weekly policy updates.
New IRS Report Finds 42.2 Million Americans Used Universal Charitable Deduction
This week, the Internal Revenue Service (IRS) released preliminary data on charitable giving in 2020. The IRS report found that:
  • In 2020, the vast majority of individual tax returns (87.5%) claimed the standard deduction. 
  • Among the 9.3% of taxpayers who itemized their deductions in 2020, charitable contributions increased by 3.0% over 2019. 
  • In 2020, 42.2 million taxpayers (29.4% of all individual tax returns) used the universal charitable deduction, a temporary tax incentive for charitable giving that expired last year. These taxpayers made a total of $10.9 billion in contributions to nonprofits last year.
Nonprofit Finance Fund Survey Finds Increased Need for Most Nonprofits’ Services
This week, the Nonprofit Finance Fund (NFF) released the national results from its 2022 State of the Nonprofit Sector Survey. Among other things, the survey found that 79% of nonprofits experienced an increase in demand for their services in 2021 and that 51% of nonprofits were unable to meet demands for their services. The survey also found that more than two-thirds of responding nonprofits had seen overall funding increase during the course of the pandemic. The Center plans to work with NFF to get North Carolina specific results from the survey. Thank you if your nonprofit completed the survey.
IRS Increases Business Mileage Rate for Second Half of 2022
The IRS announced yesterday that the standard business mileage rate will increase to 62.5 cents per mile for the second half of 2022 (up from 58.5 cents per mile for the first six months of the year). The new standard business mileage rate takes effect on July 1, 2022. Many nonprofits use this rate when reimbursing their employees for work-related driving. The volunteer mileage rate – the amount that is tax-deductible when your nonprofit's volunteers drive on behalf of your organization – remains at 14 cents per mile and can only be changed by Congress. The Center continues to advocate for Congress to increase the volunteer mileage rate.
Take Action: Become a National Voter Registration Day Partner
National Voter Registration Day (September 20) is a great opportunity for nonprofits to ensure that their staff, volunteers, and community members are registered to vote. Sign up to join the nationwide effort to register hundreds of thousands of voters on September 20. As an official partner, your nonprofit will receive a free voter registration kit and access to other opportunities to support your nonpartisan voter registration work.
The Center provides Nonprofit Policy Update each week as a benefit to its nonprofit members. However, to help all North Carolina nonprofits respond to the COVID-19 pandemic, we're temporarily providing this newsletter to non-member nonprofits. Don’t miss out – become a member to ensure you continue receiving these updates along with many other valuable benefits.
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Nonprofit Policy Update is a weekly newsletter for current members of the North Carolina Center for Nonprofits. We track state and federal policy issues that affect all 501(c)(3) nonprofits. Learn about the Center's public policy priorities. For more information, contact David Heinen, Vice President for Public Policy and Advocacy.