By Regenia Bailey / Guest Column
As we opened 2017, political changes caused many to wonder what they would mean for their organizations. Now, as 2017 draws to a close, there are new issues and concerns to consider.
Tax reform legislation and increasing awareness about sexual harassment in the workplace are two current issues that are affecting all sectors of the business and nonprofit world. While the details of these topics will continue to change as we move into the new year, nonprofits should begin examining how these may affect their organizations’ goals and activities in 2018.
Federal tax legislation
Your staff and board will not only want to understand how proposed legislation will affect your organization, but also how it will impact the people your organization serves. Here are two broad areas in the current legislation that will impact most nonprofits.
Changes to the Johnson Amendment
Currently, in exchange for tax-exempt status, charitable nonprofits, foundations and religious organizations may not participate in political or partisan activities. Nonprofit advocacy has generally been restricted to issue education; endorsement or opposition to specific political candidates or positions on ballot questions is not currently allowed for 501(c)3 organizations. Language in the House-passed version of the tax reform bill would loosen these restrictions for many nonprofit organizations. The Senate version of the bill does not include these changes. It’s uncertain what will come out of the conference committee, but this is clearly an important issue within the nonprofit sector that all organizations should continue to watch.
Loss of tax deductions for charitable giving
Doubling the standard deduction will mean fewer people will itemize their taxes – some estimate that the percentage of taxpayers who itemize will go from its current 33 percent to just around 5 percent with the new legislation.
Taking the higher standard deduction instead of itemizing one’s taxes will mean a taxpayer cannot claim a deduction for her charitable donations. This doesn’t necessarily mean that people will stop making charitable contributions, but, without the added incentive of a tax benefit for making a contribution, it may mean that the size of individual donors’ contributions will be smaller.
This will affect organizations that have individual donor programs. The degree to which your program is affected is probably difficult to predict, but this merits consideration as your organization develops its fundraising plans for the upcoming year.
Sexual harassment awareness
Nonprofit organizations have not been left off the list of organizations affected by sexual harassment allegations. If your board hasn’t already done so, review your policies, procedures and training programs to make sure that everything is up-to-date. Have your attorney review any changes or updates to make sure that they are clear and legally compliant.
Once reviewed, ensure that everyone in your organization – staff, board and other volunteers – has read and understood them. As new people come into the organization, make sure you have good orientation policies in place that include training on your organization’s policies regarding sexual harassment. Make sure your board is doing everything it can to prevent harassment within your organization.
As your board develops organizational goals for the upcoming year, consider the impact that these, as well as other political, cultural or legal issues will have on your organization’s programs and activities, and plan accordingly. Throughout the year, include strategic conversations at every meeting and use the expertise around the boardtable to adjust and refine your plans as conditions warrant.
Regular strategic thinking and analysis, along with the ability to adapt when the environment calls for it, will enable your board to lead more effectively in the current dynamic environment.
Here’s wishing your organization a successful 2018.
Regenia Bailey is the founder and owner of Bailey Leadership Initiative. Contact her through her website at www.baileyleadershipinitiative.com.
