Nonprofit Stakeholders Engaging and Advancing Together Act of 2023

I 118TH CONGRESS 1ST SESSION H. R. 3245 To strengthen the partnership between the nonprofit organizations and the Federal Government, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 11, 2023 Ms. MACE (for herself and Ms. MCCOLLUM) introduced the following bill; which was referred to the Committee on Oversight and Accountability, and in addition to the Committees on Education and the Workforce, and Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To strengthen the partnership between the nonprofit organi- zations and the Federal Government, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Nonprofit Stakeholders 4 Engaging and Advancing Together Act of 2023’’. 5 SEC. 2. FINDINGS. 6 The Congress finds that: 7 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 3245 IH (1) The nonprofit sector is a trusted partner in 1 working with American communities, strengthening 2 civil society, and ensuring that all people living in 3 the United States have the opportunity to thrive. 4 (2) The Nation relies on the nonprofit sector 5 for its ability to harness and direct the generosity, 6 service, and volunteerism of the American people. 7 (3) Nonprofit organizations are a significant 8 and highly diverse sector of the United States econ- 9 omy that includes 1,800,000 organizations as of 10 2020, according to the Internal Revenue Service. 11 United States nonprofit organizations contributed 12 $1.5 trillion to the economy in 2022 and accounted 13 for 5.6 percent of the Gross Domestic Product of the 14 United States, according to Bureau of Economic 15 Analysis data interpreted by Independent Sector. 16 (4) Collectively, the nonprofit sector engages 17 through and is supported by more than 12.5 million 18 workers, 20 million board members, 60 million vol- 19 unteers, and millions more donors. In 2017, United 20 States nonprofit organizations paid over $670 billion 21 in wages. 22 (5) 92 percent of the 501(c)(3) public charities 23 in the United States have an annual budget of less 24 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 3245 IH than $1,000,000 according to data provided by the 1 Internal Revenue Service. 2 (6) While no Federal agency regularly collects 3 systematic employment data on the nonprofit sector, 4 at the local level, nonprofits are a time-tested mech- 5 anism for delivering critical community services. 6 (7) In order to maximize the nonprofit sector’s 7 ability to utilize Federal investments to respond to 8 community needs, the Federal Government should 9 take steps to encourage, support, and promote vol- 10 unteerism and charitable giving. 11 (8) National service programs provide an essen- 12 tial vehicle for Americans of all ages eager to serve 13 their communities and transform their own lives in 14 the process. Service programs also provide a critical 15 pipeline of emerging leaders into the workforce, in- 16 cluding the nonprofit workforce. 17 (9) Like for-profit entities, the nonprofit sector 18 is challenged during times of economic downturns. 19 As employers and providers of services to countless 20 people, the sustainability of this sector is of great 21 national importance, yet the Federal Government 22 provides significant support to for-profit businesses 23 through the Small Business Administration and 24 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 3245 IH other agencies and programs that nonprofit organi- 1 zations are not able to access. 2 (10) Despite the importance of the nonprofit 3 sector to the United States economy and to the suc- 4 cess of many Federal, State, and local policy initia- 5 tives, no Federal agency or office has responsibility 6 for evaluating, building, or maintaining the capacity 7 of the nonprofit sector. 8 SEC. 3. PURPOSES. 9 The purposes of this Act are the following: 10 (1) To enhance the ability of the nonprofit sec- 11 tor to address public challenges and maximize oppor- 12 tunities to improve quality of life in the communities 13 where nonprofit organizations work. 14 (2) To strengthen communities across the 15 United States by making the Federal Government a 16 more productive partner with nonprofit organiza- 17 tions through the establishment of better Federal co- 18 ordination with respect to, enhanced transparency 19 with respect to, and greater support for the work of 20 nonprofit organizations. 21 (3) Collect, assemble, and make available Fed- 22 eral data and research on the nonprofit sector and 23 to generate new data and research where necessary 24 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 3245 IH to support the development of effective Federal pol- 1 icy. 2 (4) Raise awareness of the nonprofit sector and 3 the vital civic, social, and economic contributions 4 nonprofit organizations make to the United States. 5 SEC. 4. WHITE HOUSE OFFICE ON NONPROFIT SECTOR 6 PARTNERSHIP. 7 (a) ESTABLISHMENT.—There is established in the 8 Executive Office of the President an Office on Nonprofit 9 Sector Partnership (in this section referred to as the ‘‘Of- 10 fice’’). The Office will be led by a Nonprofit Advisor. 11 (b) FUNCTIONS.—The Office shall— 12 (1) strengthen and develop policies and actions 13 which enhance the sector’s ability to address na- 14 tional and community priorities; 15 (2) identify and promote policies that increase 16 and sustain charitable giving, volunteerism, and na- 17 tional service to support the capacity of the non- 18 profit sector; 19 (3) publish, based upon regular consultation 20 with the nonprofit sector, policy options and rec- 21 ommendations for leveraging the unique partnership 22 between the Federal Government and the nonprofit 23 sector to accelerate repair and rebuilding across 24 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 3245 IH America, particularly with respect to underserved 1 and marginalized communities; 2 (4) identify barriers and policies that hinder, 3 increase, or sustain opportunities for nonprofits to 4 operate internationally both on their own or in part- 5 nership with the Federal Government; 6 (5) coordinate, across relevant Federal agen- 7 cies, the task of compiling, producing and making 8 publicly available key existing Federal data sources 9 of relevance to the nonprofit sector. This will include 10 data on the economic health and impact of the non- 11 profit sector (including employment and wage data), 12 data on Federal funding of the nonprofit sector (in- 13 cluding grants and contracts), Census data, and 14 data on aggregated types of revenue, volunteering 15 and civic engagement and be published publicly an- 16 nually; 17 (6) direct a Federal agency, to be determined 18 by the Nonprofit Advisor within 180 days, to ini- 19 tiate, in consultation with States, a competitive 20 grant process to build a single online portal, such 21 that charities can fulfill State registration and re- 22 porting requirements for States that choose to par- 23 ticipate through a single filing. An eligible grant re- 24 cipient must be a nonprofit organization with gov- 25 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 3245 IH erning board members possessing experience working 1 to align charitable registration requirements across 2 States. In evaluating applications for this portal, the 3 Federal agency shall consider whether the applica- 4 tion will— 5 (A) enable smaller charities to respond to 6 disasters in their communities by raising funds 7 from multiple States; 8 (B) empower the public to make respon- 9 sible donations, especially to help those in need 10 during natural disasters or other crises of na- 11 tional significance; 12 (C) eliminate costly inefficiencies for char- 13 ities operating or fundraising in multiple 14 States; 15 (D) help nonprofits meet existing registra- 16 tion and filing requirements; 17 (E) ensure appropriate cybersecurity 18 standards are being met or exceeded; 19 (F) preserve the public’s trust in non- 20 profits; and 21 (G) establish a sustainable funding mecha- 22 nism that is not reliant on Federal funding for 23 ongoing costs; and 24 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 3245 IH (7) convene a commission on Federal grant re- 1 form composed of individuals representing Federal 2 grantmaking agencies, pass-through entities, and 3 nonprofit grantees and subgrantees to offer rec- 4 ommendations to streamline and improve the oper- 5 ational relationship between all levels of government 6 and the nonprofit sector. In addition, the sector’s ac- 7 cess to, participation in and performance in Federal, 8 State, and local government contracting and funding 9 shall be assessed— 10 (A) the commission members shall be ap- 11 pointed by the President and be drawn from the 12 nonprofit sector to include designees with sub- 13 stantial and diverse experience in Federal, 14 State, and local governmental grantmaking 15 processes, and shall include proportional rep- 16 resentation from small, medium, and large non- 17 profit organizations as determined by annual 18 expenses, and include meaningful racial, gender, 19 ethnic and geographic diversity; 20 (B) the report of the commission shall in- 21 clude recommendations on— 22 (i) improving provisions of the Uni- 23 form Administrative Requirements, Cost 24 Principles, and Audit Requirements for 25 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 3245 IH Federal Awards (OMB Uniform Guid- 1 ance), (2 C.F.R. 200), related to racial, 2 gender, ethnic inclusion in grantmaking 3 processes, and to negotiation of indirect 4 costs, including a de minimis indirect cost 5 rate; 6 (ii) promoting Federal agency compli- 7 ance with the OMB Uniform Guidance to 8 preserve the integrity of Federal programs 9 while allowing nonprofit organizations 10 streamlined access to Federal funding op- 11 portunities, expressly in the areas of pay- 12 ment by pass-through entities and others 13 of indirect cost rates and establishment of 14 a clearinghouse of agency decisions or 15 other means for maintaining consistent in- 16 terpretation of the OMB Uniform Guid- 17 ance; 18 (iii) reviewing Federal statutes and 19 regulations to identify inconsistent require- 20 ments and restrictions on payment of ‘‘ad- 21 ministrative costs’’ and other terms and 22 definitions, and consider the impact of in- 23 consistent or conflicting rules on organiza- 24 tions seeking Federal and State pass- 25 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 3245 IH through grants on their operations and 1 sustainability; 2 (iv) assessing how grant agreements 3 and reimbursements can be modified to en- 4 able and incentivize nonprofits to utilize 5 government grant funds to provide relevant 6 professional development to employees 7 working on those grants, and to ensure 8 that interns and those in apprenticeships 9 working on government grants or contracts 10 are paid rather than unpaid; and 11 (v) reporting its recommendations on 12 the foregoing to the President and Con- 13 gress, no later than 18 months after enact- 14 ment, and addressing how grant and con- 15 tract agreements and reimbursements 16 should be modified to enable nonprofit 17 grant recipients to respond to issues of na- 18 tional significance; and 19 (C) at the direction of the President, but 20 no later than 5 years after the release of the re- 21 port described in subparagraph (B) of this 22 paragraph, the commission shall reconvene to 23 further review the operational relationship be- 24 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 3245 IH tween all levels of government and the nonprofit 1 sector and evaluate it for improvement. 2 (c) ADMINISTRATION.—The President shall appoint 3 a Nonprofit Advisor within 90 days of enactment of this 4 legislation. The Nonprofit Advisor shall, in addition to 5 being Director of the Office, serve as the head of the Inter- 6 agency Council, co-chair of the Advisory Council, and re- 7 sponsible to carry out the provisions of this section and 8 coordinate with executive departments as appropriate with 9 respect to the mission of the Office and related govern- 10 mental entities. 11 SEC. 5. INTERAGENCY COUNCIL ON NONPROFIT SECTOR 12 PARTNERSHIP. 13 (a) ESTABLISHMENT.—There is established in the ex- 14 ecutive branch an independent entity to be known as the 15 Interagency Council on Nonprofit Sector Partnership. 16 (b) MEMBERSHIP.—The Council shall be composed of 17 the head of each cabinet agency, or their designee in addi- 18 tion to the— 19 (1) Corporation for National and Community 20 Service; 21 (2) National Endowment for the Humanities; 22 (3) National Endowment for the Arts; 23 (4) National Science Foundation; 24 VerDate Sep 11 2014 19:02 May 24, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3245.IH H3245 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 3245 IH (5) Institute of Museum and Library Services; 1 and 2 (6) other agencies as determined by the Presi- 3 dent. 4 (c) RESPONSIBILITIES.—The Interagency Council, 5 shall issue biennial reports providing specific recommenda- 6 tions on how the nonprofit sector can best leverage and 7 accelerate Federal investments to repair and rebuild 8 American communities and to offer specific recommenda- 9 tions for strengthening, promoting, and improving the 10 overall ability of the nonprofit sector to address issues of 11 national significance. These recommendations shall in- 12 clude consideration of— 13 (1) improving Federal research and data [Text truncated for display. Full text available on Congress.gov.]