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2020 Policy Forecast: Increased Regulations, Greater Community Needs, and Ballot Box Politics 

Friday, February 7, 2020

By Seyron Foo

This year, SCG is committed to tracking the policy trends most likely to impact our members' grantmaking strategies and their ability to fulfill their missions. Last year, we celebrated an incredible advocacy victory for private foundations – simplification of the private foundation excise tax! An ongoing effort for a decade and half, the two-tiered private foundation excise tax resulted in tremendous resources directed to accounting and administrative needs to calculate and determine the excise tax rate in a given year. Southern California Grantmakers through our advocacy efforts with a broad coalition of partners from across the country successfully scored a victory in simplifying the tax rate to 1.39 percent. 

As we celebrate this victory, SCG continues to vigilantly identify, monitor, and act on issues that may affect your mission. We have identified three trends likely to impact the philanthropic sector in our region: more proposed state regulations on philanthropy, increasing pressures on vulnerable communities, and a focus on housing policy at the ballot box. Read our full trends analysis below and keep an eye out for our continued coverage of these issues in 2020. 

  • Philanthropy Under Scrutiny: The continued growth of donor-advised funds (DAFs) has drawn and will continue to draw scrutiny, particularly from state legislators. Assembly Bill 1712, authored by Assemblywoman Buffy Wicks and primarily supported by CalNonprofits, will impose significant burdens on community foundations and reveal donor identity of DAF accounts – including the trustees of many SCG members who use DAFs as a form of their philanthropy. AB 1712 (Wicks) is opposed unless amended by Philanthropy California – the alliance of Southern California Grantmakers, San Diego Grantmakers, and Northern California Grantmakers – as well as the League of California Community Foundations. Our advocacy successfully stopped this harmful bill to charitable giving last week. However, Assemblywoman Wicks has promised to bring this back in the next couple weeks in a new bill. SCG will continue to work to bring more voices to the table to share our concerns with public policy that discourages the support of nonprofit partners. While this bill most directly affects DAF sponsors, trustees at private foundations may also have a donor-advised fund. If you or your trustee are concerned about issues related to their privacy or the disclosure of unique assets such as property or stock, this issue will affect you. 
  • Greater Demands as Needs Rise: Federal action on the social safety net will place more pressure on nonprofits that provide direct services to communities. For example, the Federal government took aim at the Supplemental Nutrition Assistant Program (SNAP) three times last year, restricting eligibility requirements and making it more difficult to apply for basic food benefits. According to the California Budget and Policy Center, four million Californians each month receive SNAP — also known as CalFresh. Four out of 5 of CalFresh recipients are children and their parents, seniors, and people with disabilities. Add the layer of “public charge” rules that penalize otherwise eligible immigrant families from receiving basic food needs, funders will likely observe increase pressures on regional food banks. 
  • Housing at the Ballot Box: Expect plenty of statewide ballot measures to come before voters this year in what will likely be high turnout primary and general elections. Unsurprisingly, housing will continue to be a focus for policymakers – both activists and lawmakers alike. Grassroots organizations may return to the ballot box to try to put in place a statewide rent control measure that failed in 2018 (Proposition 10). Meanwhile, a statewide taskforce has recommended that the Legislature place a “right to housing” in the state constitution. Finally, state legislators may also place a constitutional amendment that eliminates Article 34 from the state constitution. Article 34 currently requires local governments to seek voter approval for the construction of public housing. Voters in 1950 adopted Article 34 in a bid to perpetuate segregationist housing policies.
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