State Nonprofit Policy Updates

Posted By: Ann Timberlake Advocacy ,
Update Sept. 14:

The SC General Assembly returns for a special two week session TODAY.

CARES Act Phase 2 Recommendations: Last week, the Governor and both the House and the Senate budget committees finalized their recommendations for the allocation of the remaining $668 million set aside for Phase 2 of the CARES Act money for South Carolina. Your Together SC team has been busy over the last few weeks submitting requests for support of nonprofits to both Senate Finance and House Ways & Means.

The good news is that Senate Finance is proposing a $20M Nonprofit Relief Fund; House Ways & Means - $25M and the Governor - $15M. 
Their entire recommendations include:
  • Governor McMaster (also includes allocation of $100 million which is the anticipated amount of authorizations for state and local government expenditures that were unexpended in Phase 1):
    • $450 million for the UI Trust Fund
    • $73 million for COVID-19 Testing and Monitoring – DHEC
    • $20 million for COVID-19 Testing – MUSC
    • $50 million for Public School Districts and Charter School Authorizers (to get back to full-time, in-person classes)
    • $15 million for a Non-Profit Relief Grants (grants for non-profits that were not eligible for PPP)
    • $30 million for a Small Business Relief Grants (grants of up to $5,000 for small businesses that did not receive PPP loan)
    • $75 million for State Government Expenditures (includes public higher education institutions)
    • $50 million for County and Municipality Expenditures
  • Senate Finance Committee:
    • $420 million for the UI Trust Fund
    • $73 million for COVID-19 Testing and Monitoring – DHEC
    • $20.2 million for COVID-19 Testing – MUSC
    • $20 million for a Non-Profit 501(c)3 Relief Program (details TBD)
    • $20 million for a Minority Business Relief Program (details TBD)
    • $115 million for State and Local Government Expenditures (includes public and independent higher education institutions)
  • House Ways and Means:
    • $450 million for the UI Trust Fund
    • $73 million for COVID-19 Testing and Monitoring – DHEC
    • $20.2 million for COVID-19 Testing – MUSC
    • $25 million for a Non-Profit 501(c)3 Relief Program (Amendment to S.426)
    • $50 million for a Small and Minority Business Relief Program (details TBD)
    • $130 million for State and Local Government Expenditures (includes public and independent higher education institutions)
Please reach out and help thank Senate Finance Chair Hugh Leatherman, House Ways & Means Chair Murrell Smith and CARES Act Adhoc Chair Kirkman Finlay (and their committee members) for recognizing the value added by nonprofit organizations in communities across the state.
Now to work on the details of implementation. CARES Act regulations limit what can be covered; we are asking for the broadest interpretation possible.
Charitable Raffle Act: We also anticipate the reauthorization finally happening during this two week session - thanks to the hard work of Rep. Weston Newton and Sen Chip Campsen and the bill sponsors, Rep. Russell Fry and Sen. Greg Hembree.

State Budget:  Senate Finance Committee passed a FY 2020-2021 budget as a modification of the current Continuing Resolution (CR) – for the most part keeping last year’s spending amounts and provisos in place. However, this version does allocate most of one-time surplus money, which the CR does not. Highlights from the Committee’s version of the budget include:

  • Recurring (approximately $86 million extra for this year):
    • $50 million for the EFA for State Aid to Classrooms (funds step increases for teachers)
    • $11.7 million for the Local Government Fund
    • $24.6 million remaining
  • Non-recurring (approximately $775 in one-time money):
    • $500 million for the “Agency Mid-Year Reduction Reserve Account”
    • $50 million for the Department of Corrections safety and security upgrade
    • $34 million for charter schools
    • $6 million for school nurses
    • $40 million for the Department of Parks, Recreation, and Tourism (marketing)
    • $17.9 million for the Department of Mental Health (construction of a veterans’ nursing home)
    • $5 million for the State Board for Technical and Comprehensive Education (readySC workforce training)
    • $4.2 million for the Election Commission (additional stipend for poll workers)
    • $20 million for COVID-19 state employee hazard pay bonus for direct service workers making $50,000 or less
    • $27.9 million remaining

Under this new budget, last year’s provisos carry forward into this year. There were also several new provisos introduced, one of which would authorize the Office of Regulatory Staff (ORS) to act as the state’s broadband office.

At this point, the House still seems intent on moving forward under the Continuing Resolution, rather than passing a new budget so it remains to be seen what will happen when the House and Senate come back into full session next week.

Update June 30th:

Broadband: a first step towards Equity

The Senate and House reconvened on June 23rd and 24th to authorize $1.2 billion of CARES Act funding to replenish the state unemployment trust fund, bring students back to class early and spend to expand access to high-speed internet.  (H.5202 passed the Senate unanimously and the House 109-2). 

Legislators generally agreed with recommendations from the Governor and the accelerateSC task force, but rejected attempts by Reps Wendy Brawley/D, Cezar McKnight/D and Justin Bambery/D to increase broadband funding to the $100 million originally targeted for rural communities. 

Sen. Thomas Alexander/R defended $50 million as a "downpayment" first step to provide hotspot coverage to over 100,000 homes and to establish a competitive bidding process to be administered by the Office of Regulatory Staff (ORS). Sen. Wes Climer/R emphasized the state's commitment to making broadband both adoptable/affordable and accessible/efficient. And House Ways & Means Chair Murrell Smith/R described the allocation as "judicious" with the anticipation of more funding when the General Assembly returns in mid-September - as well as additional federal assistance. 

Although neither the House or Senate addressed criminal justice legislation in their recent one-day sessions, the Senate Majority Leader, Shane Massey filed the SC LEADS Act with 18 R co-sponsors to establish standards for all law enforcement agencies with punitive redress and penalties. S1240 incorporates policies previously proposed by Democrats, including vehicle pursuit standards, uniform body camera implementation, 'no-knock' warrants, officer interventions, hiring, training and terminating practices. Co-sponsors thus far include Senators Hembree, Alexander, Campsen, Talley, Turner, Bennett, CampbellGambrell, Gregory, Climer, Cromer, Shealy, Peeler, Rice, Davis, Leatherman, and Loftis

On the House side, Speaker Jay Lucas announced the formation of the Equitable Justice System and Law Enforcement Reform Committee to examine and recommend solutions for law enforcement officer training, tactics, standards and accountability, civil asset forfeiture, and criminal justice and sentencing reforms. Reps. Gary Simrill and Todd Rutherford will chair the Committee with members Bernstein, Dillard, Erickson, Gilliard, Hart, Hyde, Kimmons, McKnight, Murphy, W Newton Pope, G Smith, Stavrinakis, Thigpen, Wheeler and Wooten. 

These are encouraging developments so stay tuned for more legislation deliberations - and hopefully actions - this fall.

June 21st:
The General Assembly will return this week on June 23 and 24 to authorize and direct $1.9 billion of the total $2.7 billion CARES Act funding.
Act NOW to support expanded broadband for all South Carolinians:
  1. Urge your state Senator(s) and Representatives(s) to support full funding of the Governor's Accelerate SC recommendation for broadband expansion: $80 million for "backbone" infrastructure, $20 million for mobile "hotspots" and $250 thousand for a comprehensive state plan. (Senate Finance proposes only $50 million for broadband)
  2. Visit to view customized county maps (use the password REVD to enter the site) so that you can cite specific underserved areas in your conversations with legislators.
  3. Remind your legislators that Together SC's 800+ nonprofit partners stand ready to assist with implementing community plans to train and encourage the use of broadband resources as they become available. 
Also last  week Speaker Jay Lucas appointed a special House Committee on Justice System and Law Enforcement Reform to examine four issues: 
  1. Law enforcement training, tactics, standards and accountability
  2. Civil asset forfeiture
  3. Criminal processes and procedures 
  4. Sentencing.

Majority and Minority Leaders Gary Simrill and Todd Rutherford will chair the Committee with Republican Representatives Erickson, Hyde, Kimmons, Murphy, Newton, Pope, G Smith and Wooten and Democrat Representatives Bernstein, Dillard, Gilliard, Hart, McKnight, Stavrinakis, Thigpen and Wheeler. 

Update May 25th: 
Raffle Legislation "Crosses Over:" 
When the General Assembly met on May 12th, the Sine Die Resolution specified that bills that had "crossed over" from one chamber to the other could be taken up when the legislature reconvenes - possibly in mid-June and most certainly in September.
Luckily S.719, the bill to reauthorize the use of raffles by charitable nonprofits, is in that category and due to persistent efforts by Rep. Weston Newton/R/Beaufort, it is now on the House calendar. 
COVID Committees:
We are monitoring the deliberations of the Senate's Re-Open SC Select Committee and the House COVID-19 Small Business Regulatory Relief Committee.
Both Committees met this week and you can view archived videos here.
The Senate Committee is chaired by Sen. Thomas Alexander/R/Oconee with Sen. Vincent Sheheen/D/Kershaw, Sen. Katrina Shealy/R/Lexington, Sen. Ross Turner/R/Greenville and 3 members of Accelerate SC, Senators Tom Davis/R/Beaufort, Kevin Johnson/D/Clarendon and Gerald Malloy/D/Darlington.
Rep. Jeff Bradley/R/Beaufort chairs the House Committee with Representatives Chip Huggins/R/Lexington, Steve Long/R/Spartanburg, Leola Robinson/D/Greenville and Seth Rose/D/Richland.
Together SC will present to the House Committee on Tuesday, May 26 at 2:00. 

Up Next:
The Legislature will return mid-June to deal with COVID relief funding from the CARES Act (federal funds). 

Legislators are set to return again in mid-September for six days to deal with the state budget. The state is operating under a Continuing Resolution right now (level funding) until that time.
Believe it or not, there is also an election this year. Every seat in the Statehouse is up for election, plus Congressional seats, and of course the President.
Update May 9th:

Together SC's letter seeking equity in recovery will be shared with Governor McMaster, accelerateSC and the General Assembly this week. Over 100 Alliies for Good signed on in 24 hours. 

Please share with your legislative representatives and contacts on accelerateSC task force.

Update April 30: 

Speaker Jay Lucas and Senate President Harvey Peeler announced that the General Assembly will return to complete necessary business on May 12th, with social distancing precautions observed.

In addition, their intention to invoke the extension of the session's last day (Sine Die) to from May 14 to May 28 will hopefully allow enough legislative days for bills that were close to adoption to be enacted.

We appreciate the collaboration between Representative Weston Newton/Beaufort and Senator Chip Campsen/Charleston to expedite the passage of the Raffle Reauthorization bills during this extended session. 

Governor extends State of Emergency two weeks. 
Governor Henry McMaster launches accelerateSC, to plan reopening the state. 

Because this task force lacks philanthropic, nonprofit or diverse community leaders, Together SC's Advocacy Allies are working on ways to speak up and bring to the task force's attention issues important to those we serve and our sector. Email Madeleine if you'd like to be involved. 

Letter to Gov. McMaster regarding Covid-19 Recovery Task Force 4/20/19

Together SC has written the Governor requesting nonprofit and philanthropic leaders be included on his acelerateSC Task Force to plan SC's recovery from the Covid-19 pandemic.  

Update  4/14/20

House and Senate convened on April 8 in an attempt to pass two stopgap pieces of legislation. One resolution, the continuing resolution, would have kept the state’s government running if a budget were not passed by the end of the fiscal year, and the other resolution, the sine die resolution, would have allowed the Legislature to reconvene after May 14, when this year's session was scheduled to endHowever, neither of these emergency measures were passed.  

The House passed a continuing resolution that would have allowed the state’s government to continue to operate after July 1. It contained $180 million for the COVID-19 response and language restricting what state-owned utility Santee Cooper could and could not do in the immediate future. Once the bill was in the Senate, a handful of senators objected to the Santee Cooper language, and after extended debate, the continuing resolution was amended.
Since what the House and Senate passed are not identical, one body must return to Columbia to change the bill or Gov. McMaster will call the legislature back for a special session to pass a continuing resolution or a budget. If none of these three options happen, the state’s government would cease to operate July 1.
The Senate passed a sine die resolution as well, but by the time that was passed, the House had adjourned.
Also, the  South Carolina Board of Economic Advisors (BEA) met last week to reevaluate their predictions for the budget surplus for FY 2020-2021. Before the COVID-19 pandemic began, the House passed a budget relying on an estimated $1.9 billion surplus. The BEA revised their predictions down $1.2 billion to a $750 million surplus. While not good news for agencies that received increases in the House’s version of the budget, the BEA did not predict that there would be budget cuts.   
Letter to Governor McMaster 

In collaboration with SC Grantmakers Network and the United Way Association of SC, last week Together SC wrote the Governor requesting support for nonprofits and asking him to direct state agencies not to cancel any grants or contracts. The letter can be found here. Please share with your agency contacts and be sure to report back if your organization is at risk of losing grant or contract funding. 

Uncertainty at the State House 

The day after the House completed its budget in record time, Governor Henry McMaster sent a letter to House and Senate members urging the passage of a joint resolution to send $45 million from the state emergency reserve fund to the state Dept. of Health & Environmental Control "to prepare for a variety of contingencies and situations" in response to COVID-19. The proposal suggests that the funds could be replaced with money that would have been used to give state residents a $128 million one-time taxpayer credit.  

With uncertainty mounting about coronavirus, three lowcountry Representatives - JA Moore, Marvin Pendarvis and Wendell Gilliard - have asked the Governor to convene an emergency session of the General Assembly to consider emergency measures, including medicaid expansion and a $1.8 billion stimulus package "to offset the financial strains that this pandemic may cause."  Together SC will advocate for the inclusion of nonprofit organizations in any relief funding in the wake of the virus. 

House & Senate Charitable Raffle bills "cross over" successfully

The good news is that H.4937 (by Rep. Russell Fry) and S.719 (by Sen. Greg Hembree) were adopted by their respective chambers with little debate, essentially assuring that nonprofit raffles will be reauthorized ahead of this year's impending sunset. If the House accepts the Senate's slightly more restrictive version, it is hoped that the sunset provision retained by the Senate will be dropped.  

Together SC worked closely with legislators in 2013 to secure the Raffle Act to legalize charitable raffles and the success of the raffle these last five years in raising over $13 million for beneficial causes while also preventing abuse by casino gambling, video poker or third party operators is the basis for requesting removal of the sunset provision going forward.

Please continue to encourage your representatives and senators to support re-authorization this session without a sunset provision. 

Legislative contact information may be found at the SC Legislative website.

H.4431 - Business License Tax 
  • Sponsors: Reps Jordan, Fry, Rose, Forrest, Anderson, Hyde, B Cox, Elliott, Morgan, B Newton, Rutherford, Long, Magnuson, Clemmons, Davis, Taylor, Hewitt, Pope, Ligon, Tallon, DC Moss, Blackwell, Kirby, Sandifer, Jefferson, R William
  • Provision that exempts ‘eleemosynary organizations’ was mistakenly omitted in the final strike and insert amendment this week in LCI. Chamber supports correction and LCI and Speaker staff committed to either amending on the floor or assisting with amending in Senate sub. Reps Ott, Ballentine, Hewitt, Rose have all communicated our concerns to leadership. There is no known opposition to correction.
  • Scrivener's error regarding exemption for ‘eleemosynary organizations’ was corrected on the House floor thanks to efforts of Reps Russell Ott, Nathan Ballentine, Lee Hewitt and Seth Rose. H.4431 now resides in Senate Finance. 
H.890- Financial Reporting
  • 890/Massey & S949/Harpootlian ensure transparency for budget earmarks - not moving (S890 had a hearing in Rules Committee)
  • 3133/Newton & S491/Corbin require accountability and reporting for funds routed through st agencies - not moving but provisos are included in the budget
Public Policy Agenda for the Spring 2020 Legislative Session 
Adopted by the Together SC Board Jan. 28, 2020

Together SC is South Carolina’s network for thousands of charitable nonprofit and philanthropic organizations, and as such takes positions and advocates on state and federal public policy issues that affect the ability of our state’s charitable nonprofits to function effectively and efficiently.

Policy priorities for Together SC are identified by its Advocacy Committee and approved by the Board of Directors.  Together SC does not typically take positions on local issues, unless the issue has statewide relevance and it has been invited by a member organization to do so.


Tax Policy:

Charitable nonprofit organizations provide services and social good for all South Carolinians, and in recognition, are exempted from income and other taxes.

Nonprofit tax exemption

  • SUPPORT: full exemptions from state and local taxes and licensing fees in lieu of taxes (also known as PILOTs).
  • OPPOSE: attempts by local governments to circumvent tax exemptions through creative relabeling of taxes, or charging fees to nonprofits that are not charged to for-profit companies.
  • SUPPORT: maintenance of state property tax exemption for charitable nonprofit organizations.

Sales tax on services

South Carolina has a myriad of sales tax exemptions for certain organizations and even named organizations. Yet, there is no general exemption from sales tax for charitable nonprofits as exists in least 30 states.

  • SUPPORT: state sales tax reform that includes an exemption for charitable organizations similar to those in most other states.

Nonprofit Operations:

Government regulations and contracts for goods and services awarded to nonprofits should be reasonable and treated the same as for private for-profit companies.

Freedom of Information Act

  • SUPPORT: reforms of the state FOIA law that do not impose burdensome requirements or treat charitable nonprofit organizations differently from other companies. The agency that grants or contracts with charitable nonprofits should be responsible for appropriate disclosure under FOIA.

Raffle Reauthorization

  • SUPPORT: S719 and H.4937 to eliminate the sunset clause set for 2020, increase the value of prizes and allow unified reporting by organizations with multiple chapters. Nonprofit organizations have raised over $13 million in the five years since charitable raffles were legalized in South Carolina.

The State Budget:

Governments often contract with charitable nonprofit organizations because nonprofits have proven to be efficient and effective in delivering public services but nonprofits are often not paid the full cost of providing public services and are underpaid for their documented indirect costs.

Nonprofit Contracting: The General Assembly should:

  • Require state agencies to sign contracts with nonprofits before nonprofits are asked to begin delivering public services.
  • Ensure that the state budget includes enforcement mechanisms for prompt contracting and payment.
  • Ask the Legislative Audit Council to study problems with nonprofit-government contracting, including late contracting, late payments, and underpayment for indirect costs.
  • Adopt the OMB Uniform Guidance to guarantee full and fair implementation of cost principles and other grants reforms.
  • Provide adequate state support for public services provided by nonprofits - and where appropriate, expand funding for nonprofits that are expected to provide services instead of state or local governments.

Transparency & Accountability for state funds

  • MONITOR: legislation to ensure transparency and accountability for state funds directed to nonprofit organizations through state agencies as "member requests" or earmarks.

Major Issues That Affect the Nonprofit Sector

2020 Census

  • SUPPORT: a fair, accurate, and complete count in the 2020 Census because an accurate account is vital to ensuring that South Carolina receives its fair share of resources and funding. Solid data is essential for nonprofits and funders to plan and evaluate programs and services.