Policy Update: Government Spending, Federal Regulation Proposals, and the Start of State Legislative Sessions

Nonprofit Connect works to keep Members updated on policy changes that affect nonprofits through Policy Updates. These messages provide brief information on what is going on in government and policy that may be of interest to the nonprofit community.



Government Shutdown Averted (Again) Until January 19th, And Other Spending News
Congress avoided the November 17th deadline to fund the government, this time by passing a two-part continuing resolution with bipartisan support. There were no cuts in previous funding levels. The effort will fund about 20% of the federal government until January 19th and the remaining 80% until February 2nd. If the government shuts down, nonprofits operating federal contracts may experience delays in payments, and demands for social services offered by nonprofits may increase without any additional revenue.
Congress also extended the Farm Bill – including SNAP benefits – for one more year. A package that would provide funding for domestic disaster relief, childcare, and broadband is being held up by debates on funding for foreign aid for Ukraine, Israel, and Taiwan.
Continuing resolutions are stop gap solutions while Congress works on spending bills for the fiscal year. So far, the House has passed seven of the 12 necessary funding bills and the Senate has passed three. Congress is projected to break for the holidays on December 15th and will be unlikely to make a lot of progress until it returns in 2024.
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Federal Government Considers Regulations for Donor Advised Funds
The Treasury Department and Internal Revenue Service published the first installment of proposed regulations for donor advised funds (DAFs). A DAF is an account maintained by a charitable organization and funded by contributions from donors who have an ability to advise on the distribution or investment of amounts from the fund. These types of funds have traditionally been able to offer many of the same benefits as private foundations for donors, without being subject to foundation rules such as donating a certain percentage of funds annually. The proposed rule would offer new definitions for what does and does not count as a DAF, and would create an anti-abuse rule with the intent of deterring donors from using DAFs to avoid tax liability. You can read the proposed rule text and submit a public comment until January 16, 2024.
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Federal Government Considers Changes to Federal Grantmaking Rules
The Office of Management and Budget is considering a rewrite of its Uniform Grants Guidance, the guidelines used by federal agencies across all federal grants and other types of federal financial assistance. Some of the many proposed reforms include raising the de minimis indirect cost rate from 10% to 15%, creating an appeals process when agencies are not in alignment with Office of Management and Budget guidance, increasing the single audit threshold to $1,000,000 (from $750,000), simplifying the format of Notices of Funding Opportunities, eliminating reports and metrics that are not necessary for effective monitoring of a grant, and more. While the comment period for interested stakeholders closed on December 4, you can still learn more about the potential ramifications of these proposed changes by reading The National Council of Nonprofit’s template comments.
Simultaneously, Congress has the power to act on federal grants; the Streamlining Federal Grants Act (S. 2286/H.R. 5934) has been introduced but not yet referred to a committee in either Chamber. This legislation, as currently written, would require federal agencies to get feedback from nonprofits on ways to improve services provided by grants, create a grants council with the purpose of simplifying the grant application and reporting process, and more. Learn more from the National Council of Nonprofit’s Analysis. This organization also sent a letter to Congressional leaders on 11/27 showing support for these bills; you can still read and sign onto the letter here.
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Missouri General Assembly
Prefiling for bills to be considered in the 2024 legislative session began on December 1st, and already over 400 potential laws in the House and over 550 in the Senate have been prefiled. Bill filing is available through March 1st; this is the first step in a potential statutory change being considered by the General Assembly. You can review proposed bills here. Prefiled bills provide a glimpse into potential priorities for the next legislative session. For Kansas City area lawmakers, priorities seem to include combating inflation in a variety of ways, legalizing sports betting, and preventing celebratory gunfire, among others. The General Assembly goes into session on January 3rd.
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Kansas Legislature
In Kansas, any bills and concurrent resolutions that were introduced in 2023 (an odd numbered year) may still be considered in 2024 (the next regular session held in an even numbered year). The legislature currently has access to nearly 800 bills from the previous session in addition to newly prefiled bills. You can review the bills here. Kansas is on track to consider tax reforms and make decisions about how to spend its surplus. The Kansas Legislature will go into session on January 8th.
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Kansas City Council (Missouri)
Much conversation on solutions for housing is taking place at the city level. Last week, an ordinance was introduced that would prohibit landlords from refusing a prospective tenant based on how he or she would pay rent. The City Council meets on Thursdays and committees meet throughout the week; and you can review more about what is being discussed and when here.
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This blog is informed by the Nonprofit Champion, government websites, and various news articles. Read more from the National Council of Nonprofits on November 27.
 
Stay tuned for more updates as the new year progresses.

This post was written by Kristen Wood, Nonprofit Connect's Advocacy Contributor.
Kristen is an avid participant in Kansas City’s nonprofit community and a self-proclaimed ‘lifetime learner’. In addition to working for Goodwill of Western Missouri & Eastern Kansas, she enjoys following nonprofit policy issues.

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