An SBA for
Nonprofits?
By Stanley Carlson-Thies
Provided by the
Institutional Religious Freedom Alliance
Congresswoman Betty McCollum has proposed the "Nonprofit
Sector and Community Solutions Act,” HR 5533, to boost the federal government’s
understanding of and support for nonprofit organizations. Some have likened her
plan to a "Small Business Administration for Nonprofits” and laud an enlarged
federal role. However, others are
worried about additional burdens on nonprofits and about the bill’s apparent
lack of interest in the special characteristics and needs of faith-based
nonprofits.
The proposed bill would create a new advisory council mainly
of experts and a new interagency working group of federal officials. These new groups would consider how the
federal government can better work with nonprofits, such as ideas for
streamlining the federal grants process, expanding federal initiatives to build
the capacity of nonprofit organizations, improving the government’s
relationships with organizations it partners with to provide services, and
expanding funding for those partners.
The federal government would fund more research on the sector.
Is the bill a good idea? Diana Aviv, head of the Independent
Sector, the lobby for large, mainly secular, nonprofits, says, "To be even more
effective, nonprofits need to be able to utilize government resources much in
the way business does.” Given how
vital nonprofit organizations are in so many sectors of our nation’s life, and
how extensive a role they play in delivering government-funded services,
knowing more about what they do and how they do it, and devising better ways
for the government to interact with them and support them, seems all to the
good.
Yet the government’s helping hand can be less than
helpful. While the bill is
well-intentioned, it has also drawn criticism. Several commentators have noted that it contemplates a big
increase in the data gathered from nonprofits—as if the IRS had not already
recently began gathering much new data and as if much of the data already
flowing into government apparently is simply ignored. The Evangelical Council for Financial Accountability points
out that, as it stands, the bill does not include an exemption for churches and
church-related entities, although many of these currently are exempt from
filing the 990 form with the IRS.
And, except for one brief mention, the bill ignores the
federal government’s existing mechanism to improve its support for the
nonprofit sector: the White House
Office of Faith-Based and Neighborhood Partnerships and its counterpart Centers
in a dozen federal departments and agencies. (Ironically, some of the ideas in this bill were recommended
by the Advisory Council on Faith-Based and Neighborhood Partnerships—but there
the stress was on including faith-based and grassroots organizations.)
While the bill rightly notes that nonprofits benefit our
society by their work in "religion, faith, and spirituality” as well as in
providing health, educational, cultural, and other services, it is strikingly
silent on the reality that many of the nonprofits in every area of service are
themselves faith-based with an identity and practices that differ from their
secular counterparts and that require special protection by government. Sarah Seitz of the Congressional Prayer
Caucus notes that the original "Community Solutions Act,” HR 7, introduced in
2001, was specifically designed to protect the ability of faith-based
organizations to participate in federally funded programs without suppressing
their religious identity, by extending Charitable Choice rules to a wide range
of federal programs. But
Congresswoman McCollum, author of the current bill with a similar name, was
against that measure because of Charitable Choice.
One blogger said this about Congresswoman McCollum’s
bill: "The nonprofit sector is
enormously diverse. It is
difficult to see how this proposal will lead to a more vibrant nonprofit
community as a whole. Rather, it
seems directed primarily at entrenching the relationship between the federal
government and large nonprofit organizations.” Make that: "large secular
nonprofit organizations.”
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Stanley Carlson-Thies, founder and president of the
Institutional Religious Freedom Alliance, has worked since the early 1990s on
public policy affecting faith-based organizations. He was a founding member of
the White House Office of Faith-Based and Community Initiatives in
2001.To learn more visit www.irfalliance.org
