Nonprofit Experts Forecast What Election Day Results Will Mean for Charities

What should the nonprofit world expect from the Congress that will be elected on Tuesday? Several nonprofit experts share their prognostications.

Diana Aviv, president, Independent Sector

Ms. Aviv says she’s watching to see how members who were supported by the small-government Tea Party will affect more-mainstream Republicans when it comes to reining in the budget deficit. Some of the Tea Party candidates have expressed a desire to cut “entitlement” programs like Social Security and Medicare, she notes, although they are unlikely to get anywhere on that while President Obama is in office. A Republican-led House is likely to see social programs as candidates for budget cuts, although House members will still face a Democratic White House and, if opinion polls are correct, a Democratic Senate, she notes. That could lead to different scenarios, she says. If Republicans are unable to get the cuts they want, she says, they could blame Democrats, and “they will have made their point without paying the price.” Conversely, Democrats could accept the cuts and say, “You forced that down our throats.”

Gary Bass, executive director, OMB Watch

If Republicans win the House as expected, Mr. Bass says, the impact on nonprofits will be “bad, bad, bad.” In its recent legislative blueprint, “A Pledge to America,” House Republicans vowed to cancel any unspent economic-stimulus money; cut the federal budget to 2008 levels; hold weekly votes on spending cuts; and require Congress to approve major new federal regulations, which would affect areas like the environment or consumer protection. They could face trouble getting such measures approved in the Senate or with White House vetoes, but the result would be “gridlock,” Mr. Bass says. “It’s going to be very difficult for nonprofits to do any planning.” He says Tea Party activists could pressure Republicans to refuse to raise the government’s debt limit early next year, which would be disastrous for nonprofits that rely on federal money if it ended up in a government shutdown like the one in the mid-1990s.

William Daroff, vice president for public policy, Jewish Federations of North America

The climate for social-services programs in the next Congress will be tough no matter which party is in control, Mr. Daroff says. “There will be a major push to cut spending generally,” he says, “and that would be the case if Republicans have a one-seat majority or one-seat minority.”

He says his group plans to try to “hold on to the government funding that’s out there,” especially given the impact of the recession on vulnerable people, while also emphasizing topics that are “new and innovative and shiny as a way to cut through the clutter of spending priorities.” Those include programs to help older people get care in their homes so they don’t have to go to nursing homes, provide care to aging Holocaust survivors, and help people with autism, he says.

Steve Gunderson, president, Council on Foundations

Mr. Gunderson, a former Republican congressman, says his organization will tweak its strategy to appeal to a body that is expected to gain many new Republicans. The current Democratic Congress and the White House have promoted “philanthropic partnerships,” for example encouraging foundations to give money to help groups that won federal grants for projects to improve public schools and to promote energy-efficient projects in low-income housing.

Republicans, however, are more receptive to arguments about “creating the legal, regulatory, and tax environment for philanthropy.

“It’s sort of a Republican mantra that ‘We’re not against doing things for the common good, we just don’t want big government to do it,’” he says.

The council, for example, will seek “high level” discussions about legislation it supports to simplify the excise tax on foundation investment income, push to remove barriers to global philanthropy by simplifying the way the government determines whether an overseas group is equivalent to a U.S. charity, and highlight problems with overlapping, sometimes-conflicting federal and state regulation of philanthropy.

David L. Thompson, vice president for public policy, National Council of Nonprofits

As Republicans generally want government to do less, a Republican-controlled House might want to contract out more work to charities but would be unsympathetic to proposals to create a federal agency along the lines of the Small Business Administration to help nonprofits, Mr. Thompson says.

Perry Wasserman, a Capitol Hill expert who advises nonprofit groups

Nonprofit groups could be affected in ways they might not expect by Congressional efforts to ensure that any new spending is paid for, Mr. Wasserman says. For example, the health-care-overhaul law adopted last year included a provision that could be quite burdensome for nonprofit employers but caught charity leaders off guard: In an effort to raise money to pay for the new law by stepping up tax collections, it requires employers to file Internal Revenue Service 1099 tax forms to report all purchases from any vendor that sold them at least $600 in goods during the year. While some lawmakers have proposed repealing the provision, “the problem is you have to come up with another $19-billion somewhere,” Mr. Wasserman says.

See also, “Election Will Bring Changes to Congressional Oversight of Nonprofits.”

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We’d like to hear what you think the new Congressional lineup will mean for charities and what the overall results say about how nonprofits will fare in the new political arena. Let us know by adding your comments.