State Nonprofit Policy Updates

Posted By: Ann Timberlake Advocacy ,
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. https://www.thestate.com/news/politics-government/article241134211.html  

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. https://www.scstatehouse.gov/

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
 
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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.

STATE POLICIES

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.

 

FEDERAL POLICY