News and analysis
January 05, 2011

The New Congress Will Bring New Agenda for Nonprofits

Pablo Martinez Monsivais/AP Images

Rep. Dave Camp, chairman of the House Ways and Means committee

As the new Congress starts work today, it includes an influx of new Republican faces brought in by the midterm elections and confronts growing pressure to cut spending to bring down the national debt­. These changes, in turn, could have a big impact on programs that affect charities and the people they serve.

Here is some of what the nonprofit world can expect from the new Congress:

  • Understanding of nonprofits may be low. Voters sent 93 new members to the House of Representatives, the largest freshman class in many years. Some nonprofit advocates are already trying to educate the newcomers about their priorities.
  • Federal aid. Republicans, who will control the House and gain seats in the Senate, will take a hard line on spending, especially given pressure from the small-government Tea Party. That could be bad news for safety-net programs and programs that President Obama hoped to expand, like AmeriCorps; the Social Innovation Fund, which provides grants for promising nonprofit projects; and Promise Neighborhoods, which provides money for antipoverty projects modeled after Harlem Children’s Zone. House Republicans have vowed to cancel any unspent economic-stimulus money, cut the federal budget to 2008 levels, and hold weekly votes on spending cuts. The Senate or White House could block those efforts, but the resulting gridlock would make it hard for nonprofits to plan.
  • Scrutiny of nonprofits. Senator Charles E. Grassley, the Iowa Republican who has led a steady stream of investigations into alleged nonprofit abuses as chairman and then senior Republican on the Senate Finance Committee, is expected to move to the top Republican post on the Senate Judiciary Committee. Sen. Orrin Hatch of Utah is in line to assume Senator Grassley’s role on the Finance Committee. Senator Grassley would presumably pay less attention to nonprofit oversight, since he would lack the budget and the staff that he has now to oversee tax-exempt groups. But he will remain an influential Finance Committee member and could find a way to pursue matters that interest him from his new perch. Some observers expect Senator Hatch to be less interested in nonprofit investigations. He is more sympathetic than many other Republicans to national-service programs, last year co-sponsoring a bill with Sen. Edward Kennedy, the late Massachusetts Democrat, to greatly expand AmeriCorps.
  • Tax incentives. Rep. Dave Camp, Republican of Michigan, has taken over leadership of the House Ways and Means Committee, which oversees nonprofits through its responsibility for tax issues. Mr. Camp has a history of working well with the nonprofit world in his state and was instrumental in getting the Pension Protection Act of 2006 to include a provision to allow older people to donate money from their individual retirement accounts to charity without being taxed.
  • Charity oversight. With control of House oversight committees, Republicans will be able to call hearings over controversies involving nonprofit groups or social programs that draw their suspicion. Darrell Issa, of California, in line to head the House Oversight and Government Reform Committee, and Charles Boustany Jr., of Louisiana, of the Ways and Means oversight subcommittee, were among those who called for a hearing on Acorn­—the community-organizing group that came under fire from Congress after (selectively edited) videos surfaced that appeared to show staff members offering advice on illegal activities­. But Democrats did not agree. Mr. Issa recently told a television interviewer he is still interested in investigating Acorn, which has now declared bankruptcy.