Wednesday, December 17, 2014

Nonprofit Financial Trends for 2014 & 2015

Perhaps against my better judgment, I made several predictions in this blog one year ago for what I thought may transpire in 2014. Here goes an assessment of their accuracy.

1. The Tax Deduction for Charitable Contributions would Remain Unchanged
Ok, this one was pretty easy. Despite several efforts for serious reform, in the end, nothing notable was undertaken. Talk of new tax reform has begun anew, and my best bet is that this prediction will hold once again in 2015.

2. Efforts to Expand Lending by Nonprofits to Americans in Need would Take Hold
This prediction was largely wrong. True, cash transfers and lending have expanded in small bursts in the US, but nothing that would constitute a sweeping change of charities' approaches to poverty. And while I suggested payday and other short-term lending would be an area ripe for nonprofits' help, a push for the US Postal Service to fill this void seems to have gained more traction. This one may take some time.

3. Increased Efforts to Regulate Charity Telemarketing would be Implemented
This was also largely a bust. True, several state attorneys general have sought to expand rules to limit abuses, but nothing sweeping has been undertaken yet. This prediction too may need time, though much uncertainty remains.

4. Donor Advised Funds would Face Added Requirements
No doubt that this one was wrong, at least for 2014. I thought that the notion that private foundations can meet their own distribution requirements by giving to Donor Advised Funds would force a change, but that seems unlikely. However, the massive expansion of money in Donor Advised Funds has brought the issue to the forefront and with recent critiques in The New Yorker and ProPublica, the push for regulation is likely to gain steam.

5. Legal Challenges Will Require Churches to File Form 990s
I suspected one of the two big legal challenges to the policy that churches are exempt from filing their financial statements with the IRS would succeed. One (the American Atheists' suit) has been dismissed; the other (the Freedom from Religion Foundation's suit), has made it further by surviving a motion to dismiss but is still in early stages. This too may take some time to resolve.

In sum, my predictions were mostly off in terms of having notable resolution in 2014. However, several show signs of coming to fruition, so they may hold more promise as predictions for the coming years. Thus, meet my 2015 predictions, same as my 2014 predictions.

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