Category Archives: Nonprofits

Council meeting raises questions about office elimination

Source: Zack Lemon, Mansfield News-Journal, June 21, 2016

Some city officials are questioning how the decision to eliminate the community development office last Wednesday was made, and why certain issues were not brought to their attention earlier. The three employees who were notified all spoke at the meeting, presenting their case to council and the administration. Human resources director Dave Remy presented the city’s timeline, which law director John Spon questioned during Tuesday night’s council meeting. … Sam Dunn, the community development office’s current manager, is retiring on July 15. Remy said he and the mayor’s office explored finding a new manager for the position, but were not successful. … American Federation of State, County and Municipal Employees spokesman Dan Mapes proposed hiring a manager from a private company. … Ohio Regional Development Corporation is a nonprofit agency that currently assists Richland County and the cities of Shelby, Bucyrus and Ashland. Its president, Dale Hartle, was at the meeting Tuesday. The city contacted him and brought his company into the city, Hartle said, and he agreed to consider hiring the current employees. …

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Community development office eliminated
Source: Linda Martz, News Journal, June 16, 2016

Workers in Mansfield’s community development department were told Wednesday the office will be disbanded when its current manager retires in July and the work they are responsible for handed over to an out-of-town nonprofit group. American Federation of State, County and Municipal Employees spokesman Dan Mapes said he was told the city plans to hire Ohio Regional Development Corp. in Coshocton to handle work currently done internally within the city. The community development office oversees hearings on the city’s annual federal block grant and HOME money allocated through the U.S. Department of Housing and Urban Development. It supervises home rehabilitation projects and demolition done using those funds. … The city’s human resources director, Dave Remy, said city officials considered either hiring a new manager or outsourcing the work to an outside entity. “We came to the conclusion, with the urging of HUD and its Columbus office, to really consider going with a nonprofit corporation here in Ohio that deals exclusively with community development programming and works with assisting other communities in the state, Richland County and north central Ohio,” he said. … Three workers, Jerry Bandy, Debra Paseilich and Adrian Ackerman, learned Wednesday they will lose their current positions, effective June 27, under what was described as a reorganization …

IRS Unleashes Flood of Searchable Charity Data

Source: Peter Olsen-Phillips, The Chronicle of Philanthropy, June 15, 2016

The Internal Revenue Service opened a gusher of information on nonprofits Wednesday by making electronically filed Form 990s available in bulk and in a machine-friendly format. The material will be available through the Public Data Sets area of Amazon Web Services. It will also include information from digital versions of the 990-EZ form filed by smaller nonprofits and form 990-PFs filed by private foundations. The change means the public will have quicker and more in-depth access to the 990, the primary disclosure document for and main source of information on tax-exempt organizations. The form includes data on groups’ finances, board members, executive pay, fundraising expenses, and other aspects of their operations. The filings were previously made public as PDF documents, requiring costly manual entry or imprecise character-recognition technology to extract the data in bulk and make it searchable. Now the information can be downloaded and parsed for free by anyone with a computer.

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IRS opens up Form 990 data, ushering nonprofit sector into the age of transparency
Source: Alex Howard, Sunlight Foundation, June 16, 2016

Making meaningful improvements to how the federal government uses the internet can take years, new laws, regulations, demonstration projects, testimony and dogged persistence by public interest advocates and reformers in the pursuit of change. Then, all at once, a dam breaks and a new resource blossoms into a commons online. June 15, 2016 was such a day, when the IRS has begun publishing electronic nonprofit tax returns online in a machine-readable format on Amazon Web Services. … Over the past decade, however, the IRS has not embraced publishing the tax returns of charities — called Form 990s — as open data with joy and enthusiasm, despite the clear value of opening the $1.6 trillion nonprofit sector to transparency and innovation. In fact, Malamud had to win a federal lawsuit to get the tax agency to do what it should have been doing anyway. After a federal court ordered the IRS to disclose Form 990s as open data in 2015, however, the agency subsequently announced that it would begin working to release all of the data from electronically filed nonprofit tax returns available in a machine-readable format online by early 2016. …

Opinion: Privatizing long-term care for profit

Source: Wisconsin Gazette, May 6, 2016

A year ago during the legislative budget session, GOP leaders proposed to dismantle Wisconsin’s highly rated long-term care system. The proposal came as a shock to the state’s nonprofit managed care organizations — or MCOs. They’re the long-term care providers and personal care workers. No one bothered to consult the 55,000 elderly and disabled individuals who receive assistance from the programs or the family members who participate in their care. … In late April, Walker and GOP legislative leaders announced again that they plan to shift the current system of eight regions overseen by nonprofit MCOs to three regions administered by national for-profit health insurance companies. They have the votes and the power to do whatever they want. … Pardon my skepticism toward the newfound altruism of our one-party state. In the past few years, the GOP has slashed access to food stamps, rejected almost $1 billion in federal Medicaid funds for the poor, and defunded and forced the closure of Planned Parenthood clinics. Walker and GOP Rep. John Nygren claim that turning the long-term care system over to the private sector will save the state $300 million over the next six years. That sounds good, but expanding caseloads and payouts to insurance company shareholders over those years can only result in cuts to services for our most vulnerable citizens. …

WEDC To Address Recouping Money From Businesses Caught Outsourcing

Source: Laurel White, Wisconsin Public Radion, May 3, 2016

Wisconsin’s jobs agency will meet this summer to discuss efforts to recover money from businesses that have accepted state funds, despite outsourcing jobs.  Wisconsin Economic Development Corp. Secretary and CEO Mark Hogan agreed to discuss the policies at the agency’s July board meeting, according to a letter sent to Sen. Julie Lassa and Assembly Minority Leader Peter Barca on Monday.   Lassa and Barca, who both serve on WEDC’s board, requested the topic of discussion in a letter to Hogan earlier this week. … WEDC made headlines last week, after Madison’s WKOW-TV reported that W.W. Grainger, a Janesville company, outsourced jobs to Panama after collecting $50,000 in job creation tax credits. … The agency, a centerpiece of Gov. Scott Walker’s jobs creation agenda has been plagued by allegations of mismanagement and questions over its efficacy. …

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Outsourcing loses Wisconsin money, jobs, state leaders work to recover losses
Source: Emily Hamer, Badger Herald, May 3, 2016

Sen. Julie Lassa, D-Stevens Point, and Rep. Peter Barca, D-Kenosha, sent a letter to Mark Hogan, secretary and chief executive officer designee of the Wisconsin Economic Development Corporation. WEDC is the organization that provides businesses with monetary assistance to help stimulate the economy. The two Democrats, who both serve on the WEDC board of directors, requested a report from WEDC on its efforts to recover money that was given to companies that outsourced jobs. … In the letter, Hogan said W.W. Grainger, one of the companies in question, earned $50,000 in tax credits from the Department of Commerce. W.W. Grainger did not maintain the jobs required in order to keep the credit, so WEDC revoked the $50,000, Hogan said. All of the credits will be paid back, he added. …

Wisconsin Democrats seek answers on WEDC outsourcing clawbacks
Source: Jessie Opioen, The Cap Times, May 2, 2016

The two Democratic lawmakers on the board of the state’s jobs agency are asking the Wisconsin Economic Development Corporation to explain what it’s doing to recover state funds from companies that have outsourced jobs. Sen. Julie Lassa, D-Stevens Point, and Rep. Peter Barca, D-Kenosha, sent a letter to WEDC Secretary and CEO Mark Hogan on Monday requesting a report on the agency’s “clawback” efforts for incentives given to companies that later outsourced positions or violated otherwise violated their agreements. … Their letter comes after a report from WKOW-TV last week that Grainger Industrial Supply had outsourced six jobs to Panama from its Janesville facility after receiving $50,000 in WEDC tax credits. Grainger is the third company reported to have shipped jobs from Wisconsin after receiving state funds from WEDC. The state hasn’t yet recovered any of those funds, although Gov. Scott Walker has called for clawbacks.

“It’s Wrong.” Democrats Propose Bill Against Outsourcing Jobs
Source: Alex Hagan, NBC 26, August 10, 2015

In an effort to keep jobs in Wisconsin, there is new legislation just being introduced to make companies ineligible to receive grants or loans from a state agency for up to five years if they outsource jobs. This bill is in response to reports corporations received state aid through the WEDC  that had laid off Wisconsin workers to outsource jobs. “It doesn’t pay for us to be contributing to companies that take our jobs in Wisconsin and then send them overseas. So the goal here is to say it’s totally wrong,” says Sen. Dave Hansen.
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Not-for-profits dominate top-10 list of hospitals with biggest surpluses

Source: Harris Meyer, Modern Healthcare, May 2, 2016

Seven of the 10 hospitals in the U.S. with the biggest surpluses from patient care services in 2013 were not-for-profits, according to a new study in Health Affairs based on Medicare cost reports. … The study found that factors influencing surpluses include a hospital’s market power, whether the hospital’s market has a dominant insurer, retail price markup, prestige, teaching status, the mix of uninsured and Medicare patients, and for-profit or not-for profit ownership. … Anderson said this is the first study he’s aware of to look at patient care services separately from overall margins. He emphasized that the study, based on data from about 3,000 acute care hospitals, is a snapshot of one year’s financial performance, and does not capture prior or subsequent performance. … The study comes out at a time of intense debate about the role of hospital consolidation and price-setting in U.S. healthcare cost growth. Commercial insurers are merging based heavily on the argument that they need greater scale to bargain effectively with larger health systems. The study also raises questions about the hospital industry’s frequent claims that rate pressure from public and private payers is undermining hospital finances.

How Do Nonprofit Firms Respond to Tax Policy?

Source: Brian Galle, Public Finance Review, March 22, 2016

Abstract:
We investigate the effects of variations in the value of the charitable contribution deduction on nonprofit firm behavior, including exploring for the first time the effects of the tax price of giving on fund-raising. We find that a 1 percent increase in tax subsidies is correlated with a 2.0 percent increase in fund-raising, while the elasticity of real charitable output to changes in tax price is less than one in absolute value for most firms. We derive a new equation for treasury efficiency in the presence of fund-raising and find that while our point estimates still support treasury efficiency, our confidence intervals are wide enough to allow some possibility that the deduction is not cost effective. Further, the modest elasticity of charitable output to tax price implies that tax subsidies can crowd out other revenue sources, such that the efficacy of the subsidy depends on the relative efficiency of these alternative sources.

Nonprofits in America: new research data on employment, wages, and establishments

Source: Monthly Labor Review, February 2016

BLS recently developed research data on nonprofit organizations, including employment, wages, and the number of establishments. These new data provide insights into this important segment of the U.S. economy. Nonprofit employment, total annual wages, and the number of establishments grew steadily each year from 2007 through 2012, even during the 2007–09 recession. By contrast, these three measures were much more volatile over the 2007–12 period for the total private sector, with employment declining by 3.0 percent over the period and nominal wages and the number of establishments growing much slower than in the nonprofit sector.

Tracking the Still-Elusive Outcomes of Social Impact Bonds

Source: Patricia Schaefer, NonProfit Quarterly, February 29, 2016

As attractive as SIBs can look in theory, in practice, their success is by no means proven yet, and there has been no independent research to verify long-term effectiveness or net cost savings. As Jon Pratt and Ruth McCambridge wrote here recently, one disappointing experiment, which has been much analyzed, is one in which SIBs were used to try to reduce recidivism at Rikers Island prison in New York City. That program brought Goldman Sachs, which provided a $7.2 million loan, to the social justice nonprofit MDRC, which oversaw the project. Bloomberg Philanthropies provided a $6 million loan guarantee. … The Brookings Institution has published a report analyzing the global impact bond market and the use of these instruments in the early childhood development sector, in which certain interventions have higher potential for long-term returns in adult health, education, and employment outcomes. Like Goldman, they point to the benefits of countering the financing and delivery constraints typically seen in the sector by providing the necessary upfront capital. … Brookings recognizes, however, that the link between services and longer-term outcomes isn’t always easily tracked in the early childhood development sector, and that the inability to cleanly establish connections may prove problematic in some cases.

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Foundations for Social Impact Bonds: How and Why Philanthropy Is Catalyzing the Development of a New Market
Source: Jane Hughes and Jill Scherer, Social Finance, 2014

From the summary:
Philanthropic institutions have been instrumental in helping to launch the SIB market both in the US and abroad. To explore this work, Social Finance has released a White Paper entitled Foundations for Social Impact Bonds: How and Why Philanthropy Is Catalyzing the Development of a New Market. Drawing on existing research and our on-the-ground experience, as well as interviews with numerous foundation staff and thought leaders, we assessed the role that philanthropy has played and will continue to play in developing the SIB market in the US.

Foundations for Social Impact Bonds
Source: Tracy Palandjian & Jane Hughes, Stanford Social Innovation Review, March 19, 2014

New research explores the role of foundations in the development of the new SIB market.

America’s Most Valuable For-Profit College Has A New Plan To Go Non-Profit

Source: Molly Hensley-Clancy, Buzzfeed News, February 22, 2016

The country’s most valuable publicly-traded for-profit college has hatched a complex and unprecedented plan to become a nonprofit. Grand Canyon Education told investors this week that it was trying to pull off a scheme that would essentially split the company in two — one part a nonprofit college, Grand Canyon University, and the other half a for-profit service provider. … Grand Canyon’s move is a sign of the times for the for-profit college business, whose publicly traded companies have taken a beating amid a regulatory crackdown in recent years. Among the largest operators, one was taken private and the other was wiped out altogether. There are now just three listed for-profit college companies valued above $1 billion: Apollo Education, Grand Canyon, and DeVry. … So the company came up with a cheaper alternative: turning the university itself into a nonprofit, but leaving the businesses that recruit students and power the school’s online courses as part of a for-profit company. The new plan requires a much smaller loan, since much of Grand Canyon’s value, executives say, is tied up in the machinery that supports the school. If the newly-created nonprofit has to pay only for the value of Grand Canyon University, the price tag is much smaller. The for-profit company would work as a contractor for the university. In an ideal world, the company would soon sell its software and know-how to other universities as well. And Grand Canyon University would lose the black mark on its reputation — its for-profit status.

Nonprofit pay and benefits: estimates from the National Compensation Survey

Source: John Bishow, Kristen Monaco, Bureau of Labor Statistics, January 2016

A BLS study reveals that, in the aggregate, workers at nonprofit businesses earn a pay premium compared with their for-profit counterparts. Detailed analyses, however, show a more nuanced picture: using wages as the pay measure indicates a slight wage disadvantage for management, professional, and related workers, and a wage advantage for service workers, at nonprofits and wage parity between nonprofit and for-profit sales and office workers; using total compensation as the pay measure indicates compensation parity between nonprofit and for-profit businesses for management, professional, and related workers and for sales and office workers and a compensation premium for nonprofit service workers.