Friday, June 18, 2010

The "Nonprofit Sector and Community Solutions Act of 2010"

Representative Betty McCollum(D-MN) introduced the Nonprofit Sector and Community Solutions Act of 2010 (H.R. 5533) on Wednesday, June 16.  The bill has the support of several nonprofit advocacy groups, including the National Council of Nonprofits, Independent Sector and America Forward. The purpose of the Act is to research, report on and coordinate the federal government's interaction with nonprofit organizations. The Act promises to do so by facilitating better communication of the nonprofit sector with the federal government, better coordination between the government agencies, and enhanced data collection about nonprofit organizations.

The Act authorizes the creation of a bipartisan, 16-member “ U.S. Council on Nonprofit Organizations and Community Solutions” which would be tasked with considering the relationship between the federal government and nonprofits and making recommendations based upon its findings to the President and Congress. The Council would also be mandated to host an annual summit to inform Congress and the public on its solutions and progress.

The Act would also create the “Interagency Working Group on Nonprofit Organizations and the Federal Government,” to be composed of Cabinet Secretaries, White House officials, and the heads of agencies that interact with nonprofits. The Working Group would convene and engage a coordinated process to achieve better outcomes in addressing federal priorities on national and community challenges.

Finally, the Act authorizes the Department of Commerce to coordinate data collection on nonprofits and the National Science Foundation to engage research on nonprofit organizations.

Part of the rationale for the Act to move the federal government towards an agency for nonprofits analogous to the Small Business Administration. The bill's authors lament that "no Federal agency has responsibility for evaluating, building, or maintaining the capacity of the nonprofit sector." Should there be one? Strikingly absent from the discussion is recognition of the substantial oversight and regulation of nonprofits that the IRS already does and which promises to increase under the new Form 990 and the Service's governance initiatives.

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. This is good for two groups: the federal government and large nonprofits. Perhaps it will also create more efficiencies in the delivery of goods and services to those who rely on these entities. Beyond that, I am skeptical that a large political and bureaucratic endeavor on the federal level offers much benefit to the sector as a whole.

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