[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7587 Introduced in House (IH)]
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117th CONGRESS
2d Session
H. R. 7587
To strengthen the partnership between the nonprofit organizations and
the Federal Government, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 26, 2022
Ms. McCollum (for herself and Mr. Upton) introduced the following bill;
which was referred to the Committee on Oversight and Reform, and in
addition to the Committees on Education and Labor, and Ways and Means,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To strengthen the partnership between the nonprofit organizations and
the Federal Government, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Nonprofit Sector Strength and
Partnership Act of 2022''.
SEC. 2. FINDINGS.
The Congress finds that:
(1) The nonprofit sector is a trusted partner in working
with American communities, strengthening civil society, and
ensuring that all people living in the United States have the
opportunity to thrive.
(2) The Nation relies on the nonprofit sector on its
ability to harness and direct the generosity, service, and
volunteerism of the American people.
(3) Nonprofit organizations are a significant and highly
diverse sector of the United States economy that includes
1,800,000 organizations as of 2020, according to the Internal
Revenue Service. United States nonprofit organizations
contributed $1.2 trillion to the economy in 2020 and accounted
for 5.9 percent of the Gross Domestic Product of the United
States, according to Bureau of Economic Analysis data
interpreted by Independent Sector.
(4) Collectively, the nonprofit sector engages through and
is supported by more than 12 million workers, 20 million board
members, 63 million volunteers, and 170 million donors. In
2017, United States nonprofits employed 12.5 million paid
workers and paid over $670 billion in wages.
(5) 92 percent of the 501(c)(3) public charities in the
United States have an annual budget of less than $1,000,000
according to data provided by the Internal Revenue Service.
(6) While no Federal agency regularly collects systematic
employment data on the nonprofit sector, at the local level,
nonprofits are a time-tested mechanism for delivering critical
community services.
(7) In order to maximize the nonprofit sector's ability to
utilize Federal investments to respond to community need, the
Federal Government should take steps to encourage, support, and
promote volunteerism and charitable giving.
(8) National service programs provide an essential vehicle
for Americans of all ages anxious to serve their communities
and transform their own lives in the process. Service programs
also provide a critical pipeline of emerging leaders into the
workforce, including the nonprofit workforce.
(9) Like for-profit entities, the nonprofit sector is
challenged during times of economic downturns. As employers and
providers of services to countless Americans, the
sustainability of this sector is of great national importance,
yet the Federal Government provides significant support to for-
profit businesses through the Small Business Administration and
other agencies and programs that are not accessible to
nonprofit organizations.
(10) Despite the importance of the nonprofit sector to the
United States economy and to the success of many Federal,
State, and local policy initiatives, no Federal agency or
office has responsibility for evaluating, building, or
maintaining the capacity of the nonprofit sector.
SEC. 3. PURPOSES.
The purposes of this Act are the following:
(1) To enhance the ability of the nonprofit sector to
address public challenges and maximize opportunities to improve
quality of life in the communities where nonprofit
organizations work.
(2) To strengthen communities across the United States by
making the Federal Government a more productive partner with
nonprofit organizations through the establishment of better
Federal coordination with respect to, enhanced transparency
with respect to, and greater support for the work of nonprofit
organizations.
(3) Collect, assemble, and make available Federal data and
research on the nonprofit sector and to generate new data and
research where necessary to support the development of
effective Federal policy.
(4) Raise awareness of the nonprofit sector and the vital
civic, social, and economic contributions nonprofit
organizations make to the United States.
SEC. 4. WHITE HOUSE OFFICE ON NONPROFIT SECTOR PARTNERSHIP.
(a) Establishment.--There is established in the Executive Office of
the President an Office on Nonprofit Sector Partnership (in this
section referred to as the ``Office''). The Office will be led by a
Nonprofit Advisor.
(b) Functions.--The Office shall--
(1) strengthen and develop policies and actions which
enhance the sector's ability to address national and community
priorities;
(2) identify and promote policies that increase and sustain
charitable giving, volunteerism, and national service to
support the capacity of the nonprofit sector;
(3) publish, based upon regular consultation with the
nonprofit sector, policy options and recommendations for
leveraging the unique partnership between the Federal
Government and the nonprofit sector to accelerate repair and
rebuilding across America, particularly with respect to
underserved and marginalized communities;
(4) identify barriers and policies that hinder, increase,
or sustain opportunities for nonprofits to operate
internationally both on their own or in partnership with the
Federal Government;
(5) coordinate, across relevant Federal agencies, the task
of compiling, producing and making publicly available key
existing Federal data sources of relevance to the nonprofit
sector. This will include data on the economic health and
impact of the nonprofit sector (including employment and wage
data), data on Federal funding of the nonprofit sector
(including grants and contracts), Census data, and data on
aggregated types of revenue, volunteering and civic engagement
and be published publicly annually;
(6) direct a Federal agency, to be determined by the
Nonprofit Advisor within 180 days, to initiate, in consultation
with States, a competitive grant process to build a single
online portal, such that charities can fulfill State
registration and reporting requirements for States that choose
to participate through a single filing. An eligible grant
recipient must be a nonprofit organization with governing board
members possessing experience working to align charitable
registration requirements across States. In evaluating
applications for this portal, the Federal agency shall consider
whether the application will--
(A) enable smaller charities to respond to
disasters in their communities by raising funds from
multiple States;
(B) empower the public to make responsible
donations, especially to help those in need during
natural disasters or other crises of national
significance;
(C) eliminate costly inefficiencies for charities
operating or fundraising in multiple States;
(D) help nonprofits meet existing registration and
filing requirements;
(E) ensure appropriate cybersecurity standards are
being met or exceeded;
(F) preserve the public's trust in nonprofits; and
(G) establish a sustainable funding mechanism that
is not reliant on Federal funding for ongoing costs;
and
(7) convene a commission on Federal grant reform composed
of individuals representing Federal grantmaking agencies, pass-
through entities, and nonprofit grantees and subgrantees to
offer recommendations to streamline and improve the operational
relationship between all levels of government and the nonprofit
sector. In addition, the sector's access to, participation in
and performance in Federal, State, and local government
contracting and funding shall be assessed--
(A) the commission members shall be appointed by
the President and be drawn from the nonprofit sector to
include designees with substantial and diverse
experience in Federal, State, and local governmental
grantmaking processes, and shall include proportional
representation from small, medium, and large nonprofit
organizations as determined by annual expenses, and
include meaningful racial, gender, ethnic and
geographic diversity;
(B) the report of the commission shall include
recommendations on--
(i) improving provisions of the Uniform
Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards (OMB
Uniform Guidance), (2 C.F.R. 200), related to
racial, gender, ethnic inclusion in grantmaking
processes, and to negotiation of indirect
costs, including a de minimis indirect cost
rate;
(ii) promoting Federal agency compliance
with the OMB Uniform Guidance to preserve the
integrity of Federal programs while allowing
nonprofit organizations streamlined access to
Federal funding opportunities, expressly in the
areas of payment by pass-through entities and
others of indirect cost rates and establishment
of a clearinghouse of agency decisions or other
means for maintaining consistent interpretation
of the OMB Uniform Guidance;
(iii) reviewing Federal statutes and
regulations to identify inconsistent
requirements and restrictions on payment of
``administrative costs'' and other terms and
definitions, and consider the impact of
inconsistent or conflicting rules on
organizations seeking Federal and State pass-
through grants on their operations and
sustainability;
(iv) assessing how grant agreements and
reimbursements can be modified to enable and
incentivize nonprofits to utilize government
grant funds to provide relevant professional
development to employees working on those
grants, and to ensure that interns and those in
apprenticeships working on government grants or
contracts are paid rather than unpaid; and
(v) reporting its recommendations on the
foregoing to the President and Congress, no
later than 18 months after enactment, and
addressing how grant and contract agreements
and reimbursements should be modified to enable
nonprofit grant recipients to respond to issues
of national significance; and
(C) at the direction of the President, but no later
than 5 years after the release of the report described
in subparagraph (B) of this paragraph, the commission
shall reconvene to further review the operational
relationship between all levels of government and the
nonprofit sector and evaluate it for improvement.
(c) Administration.--The President shall appoint a Nonprofit
Advisor within 90 days of enactment of this legislation. The Nonprofit
Advisor shall, in addition to being Director of the Office, serve as
the head of the Interagency Council, co-chair of the Advisory Council,
and responsible to carry out the provisions of this section and
coordinate with executive departments as appropriate with respect to
the mission of the Office and related governmental entities.
SEC. 5. INTERAGENCY COUNCIL ON NONPROFIT SECTOR PARTNERSHIP.
(a) Establishment.--There is established in the executive branch an
independent entity to be known as the Interagency Council on Nonprofit
Sector Partnership.
(b) Membership.--The Council shall be composed of the head of each
cabinet agency, or their designee in addition to the--
(1) Corporation for National and Community Service;
(2) National Endowment for the Humanities;
(3) National Endowment for the Arts;
(4) National Science Foundation;
(5) Institute of Museum and Library Services; and
(6) other agencies as determined by the President.
(c) Responsibilities.--The Interagency Council, shall issue
biennial reports providing specific recommendations on how the
nonprofit sector can best leverage and accelerate Federal investments
to rebuild American communities and to offer specific recommendations
for strengthening, promoting, and improving the overall ability of the
nonprofit sector to address issues of national significance. These
recommendations shall include consideration of--
(1) improving Federal research and data access and
transparency, including by collecting and disseminating
disaggregated data and research relevant to the ability of the
nonprofit sector to respond to societal need;
(2) consulting and partnering with nonprofits as an engine
of employment, preparing Americans for their first jobs or new
jobs, deploying national service members to rebuild communities
while acquiring valuable professional and civic skills and
career guidance;
(3) legislation, regulation, and other action toward these
goals, including changes to the structure of the Interagency
Council;
(4) Federal efforts that could have an impact on charitable
giving, volunteerism, and national service;
(5) Federal investments that could bolster the civic
infrastructure of the United States, which in includes its
workforce, volunteer force, capacity of nonprofit institutions,
and the norms and practices that help communities solve
problems; and
(6) how Federal technology policies and funding might be
more effectively aligned with the nonprofit sector and the
communities it serves.
(d) Administration.--The Interagency Council shall be chaired by
the Nonprofit Advisor and may accept staff detailed from Federal
agencies to support coordination and implementation efforts. The
Interagency Council shall meet no fewer than four times per year.
SEC. 6. ADVISORY BOARD ON THE NONPROFIT SECTOR.
(a) Establishment.--There is hereby established under the Federal
Advisory Committee Act, (Public Law 92-463), an Advisory Board on the
Nonprofit Sector, co-chaired by the Nonprofit Advisor and a designee
from the nonprofit sector, as appointed by the President and Congress
as described below, except for subsection (b)(2)(B) of this section.
(b) Membership.--
(1) Number and appointment.--The Advisory Board shall be
composed of 16 members as follows:
(A) The Nonprofit Advisor and seven additional
members shall be appointed by the President.
(B) Two members shall be appointed by the Speaker
of the House of Representatives.
(C) Two members shall be appointed by the minority
leader of the House of Representatives.
(D) Two members shall be appointed by the majority
leader of the Senate.
(E) Two members shall be appointed by the minority
leader of the Senate.
(2) With the exception of the Nonprofit Advisor, membership
of the Advisory Board shall be drawn from the nonprofit sector
to include designees with substantial and diverse experience
and points of view in the issues facing the nonprofit sector.
This shall include leading national organizations that
represent the interests of the broad sector, as well as
proportional representation to the extent possible from
representatives of large, medium and small nonprofit and
philanthropic organizations as determined by annual expenses
and include meaningful racial, gender, ethnic and geographic
diversity. The terms of members to the Advisory Board shall be
staggered between three and four years and renewable for one
term.
(A) Vacancies.--A vacancy on the Board shall be
filled in the manner in which the original appointment
was made.
(B) Basic pay and travel expenses.--With the
exception of the Nonprofit Advisor, all Voting Board
members shall, and nonvoting members may, be appointed
as special Government employees and receive a
consultant fee and be reimbursed for travel expenses,
including per diem in lieu of subsistence, in the same
manner as provided under the Federal Advisory Committee
Act, unless such compensation and reimbursement are
waived.
(C) Co-chairs.--The President shall designate the
Nonprofit Advisor as a co-chair of the Advisory Board
and select and additional Co-chair from among the
members of the Board, who may not be members of the
same political party.
(c) Functions.--The Advisory Board shall issue biennial reports to
Congress, as well as advise the President and the Interagency Council
on matters involving policy affecting nonprofit sector, volunteerism,
service, and other related topics. The Advisory Board shall meet
regularly, upon the call of the co-chairs, and shall--
(1) respond to requests from the President or the
President's designee for information, analysis, evaluation, or
advice;
(2) solicit information and ideas from a broad range of
stakeholders;
(3) in its biennial report, provide information on the
state of the nonprofit sector, volunteerism, charitable giving
and national service, as well as feedback on the effect of
Federal policies on each;
(4) in its biennial report, provide recommendations on
legislative, regulatory, and executive actions to improve and
support the nonprofit sector and its partnerships with the
Federal Government;
(5) in its biennial report, provide recommendations on
long-term opportunities to strengthen the nonprofit sector,
volunteerism, and national service through Federal actions and
policy; and
(6) in its biennial report, include a statement analyzing
how any recommendations would impact the disparities between
members of different racial and ethnic groups.
(d) Administration.--The heads of executive departments and
agencies shall provide the Advisory Board with information concerning
appropriate matters when requested by the Advisory Board Co-Chairs and
as required for the purpose of carrying out the Advisory Board's
functions, unless otherwise prohibited by law.
SEC. 7. VOLUNTEERISM AND CHARITABLE GIVING.
(a) Treasury Department.--The Secretary of the Department of the
Treasury shall--
(1) analyze and publicly release the impact of relevant
statutes, regulations, and other actions on charitable giving
specifically and the nonprofit sector generally, including
analysis disaggregated by demographic factors whenever
possible; and
(2) examine the reconstitution of the Advisory Committee on
Tax Exempt and Government Entities.
(b) Department of Labor, Bureau of Labor Statistics.--The Bureau of
Labor Statistics shall within two years of enactment, issue a biennial
report on trends in the non-stipended volunteer force.
(c) Corporation for National and Community Service.--The
Corporation for National and Community Service shall--
(1) issue a comprehensive report assessing how CNCS can
best be structured and resourced to support the unique needs
and potential of both the non-stipended volunteer force and the
national service community. This assessment shall also consider
how underserved and marginalized communities can access service
programs. CNCS shall share that report with Congress within six
months of enactment and issue updates every two years,
thereafter;
(2) review existing programs such as the Volunteer
Generation Fund and the Nonprofit Capacity Building Program to
determine how these programs might be strengthened and/or
expanded to ensure, among other critical functions, they will
support a wide diversity of nonprofits to build capacity to
engage, sustain, and support the volunteer force, and to share
such recommendations with Congress within six months of
enactment;
(3) within 90 days of enactment, solicit input from the
nonprofit sector and the public about enhancing and revising
the Current Population Survey with supplements on--
(A) volunteerism;
(B) charitable giving; and
(C) civic engagement; and
(4) within six months of enactment, present the findings of
the input described in paragraph (3) to Congress and the Office
on the Nonprofit Sector.
SEC. 8. NATIONAL SERVICE.
The Corporation for National and Community Service shall--
(1) by no later than one year from the date of enactment,
make recommendations to Congress on updating Service Year
Fellowships to broaden access to national service to
underserved and marginalized communities and provide increased
capacity for all section 501(c)(3) nonprofits in moments of
increased need; and
(2) by no later than two years from the date of enactment,
redesign and relaunch the eGrants system, including user
testing that engages organizations who are not current grantees
and that represent or reach underserved and marginalized
communities to test barriers to submitting for a grant.
SEC. 9. GOVERNMENT RESEARCH AND DATA.
(a) Treasury Department.--The Secretary of the Department of the
Treasury shall--
(1) in consultation with the Advisory Committee, make
recommendations to Congress on how to formulate the way data is
recorded concerning government grants, contracts, and
reimbursements to nonprofit organizations on Form 990, Return
of Organization Exempt from Income Tax, to increase the utility
and clarity of Form 990 information. The IRS will also take
steps to improve public access to 990 e-filed data, providing
the schema and metadata necessary to facilitate public use;
(2) revoke the use of form 1023-EZ for nonprofit filing
status and initiate a process to replace it, based upon
recommendations from the Advisory Board, the nonprofit sector,
representatives of the National Association of State Charities
Officials and government examinations; and
(3) in consultation with stakeholders in the nonprofit
sector, including the Advisory Board, consider and publicly
release recommendations, funding needs, and activities to
improve the nonprofit sector and to preserve integrity within
the sector and on behalf of the general public.
(b) Department of Labor, Bureau of Labor Statistics.--The Bureau of
Labor Statistics shall include nonprofit organizations as a distinct
category of employer in quarterly reports from its Quarterly Census of
Employment and Wages. Within 90 days of enactment, the Bureau of Labor
Statistics shall transmit a plan to Congress that will accomplish this
goal.
(c) Department of Commerce, Bureau of Economic Analysis.--The
Bureau of Economic Analysis shall in consultation with the Advisory
Committee, create a Satellite Account on Nonprofit and Related
Institutions and Volunteer Work within its national accounts program.
This account shall be published no less frequently than on a biennial
basis.
(d) White House, Office of Management and Budget.--The Office of
Management and Budget shall--
(1) solicit information from all relevant Federal agencies
that collect existing data on the nonprofit sector in all
published reports and publicly available tables and datasets
and direct these agencies to include existing data
disaggregated by the following factors--
(A) the number of clients served by nonprofit
organizations, including existing data on the race,
gender, age, income level, languages spoken and
geographic location of such clients;
(B) existing data on types of revenues, expenses,
and operating reserves by nonprofit organizations of
various sizes and missions;
(C) the volunteer hours contributed to nonprofit
organizations by individuals in the United States; and
(D) other factors in existing data as determined in
consultation with the Advisory Board; and
(2) conduct an impact assessment of how government data
collection, algorithm use and accuracy may have a
discriminatory or disparate impact on nonprofit issues or
communities they serve, particularly underserved and
marginalized communities.
SEC. 10. NONPARTISAN CIVIC ENGAGEMENT AND ADVOCACY.
The Government Accountability Office shall, within 1 year of
enactment and after gathering input from the Advisory Board and the
broader nonprofit sector, issue a report to Congress on--
(1) opportunities to clarify the difference between
nonpartisan civic engagement and the current prohibition on
political campaign intervention for organizations organized
under section 501(c)(3) of title 26, United States Code; and
(2) the role of the current ``facts and circumstances''
standard for tax-exempt entities organized under provisions of
the Internal Revenue Code other than section 501(c)(3) of title
26, United States Code.
SEC. 11. DEFINITIONS.
In this Act:
(1) Nonprofit.--The term ``nonprofit'' or ``nonprofit
organization'' shall include the definition included in section
501(c)(3) of title 26, United States Code, and in addition
shall mean a group organized for purposes other than generating
profit and in which no part of the organization's income is
distributed to its members, directors, or officers.
(2) Pass-through entity.--The term ``pass-through entity''
shall include the definition included in section 200.1 of title
2, Code of Federal Regulations, a non-Federal entity that
provides a subaward to a subrecipient to carry out part of a
Federal program.
(3) Nonprofit advisor.--The term ``Nonprofit Advisor''
means an individual who is--
(A) designated as an Assistant to the President;
(B) has experience working in the nonprofit sector
and government; and
(C) has demonstrated a commitment to strengthening
the partnership between the Federal Government and the
nonprofit sector.
(4) Current population survey.--The term ``Current
Population Survey'' means the jointly sponsored survey
administered by the Census Bureau and the Bureau of Labor
Statistics and approved by the Office of Management and Budget
(OMB Number 0607-0049).
(5) Underserved and marginalized communities.--The term
``underserved and marginalized communities'' means individuals
who are--
(A) American Indian or Alaska Native, Asian, Black
or African American, Hispanic or Latino, or Native
Hawaiian or Other Pacific Islander, according to Office
of Management and Budget Statistical Policy Directive
No. 15, Race and Ethnic Standards for Federal
Statistics and Administrative Reporting;
(B) rural populations;
(C) individuals with disabilities;
(D) low-income or homeless individuals;
(E) individuals with mental health or substance
related disorders;
(F) victims of abuse or trauma;
(G) lesbian, gay, bisexual, and transgender
individuals; or
(H) refugees or migrants.
SEC. 12. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out the provisions
of this Act $50,000,000 for fiscal year 2023 and such sums as necessary
for each of fiscal years 2024 through 2027.
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