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July 2019 Public Policy Roundup

Publication date: 
Monday, July 29, 2019

Executive Summary

This month’s Policy Roundup takes a look into the bustling updates from Sacramento including the newly enacted state budget, a legislative strategy to reduce deep child poverty and what a statewide-run retirement savings option would look like in practice.  We also explore the potential impact of the federal administration’s proposal to shrink the federal poverty threshold and new private university endowments taxes. Other highlights include: 

  • Data from the Annie E. Casey KIDS COUNT Data Book and where California ranks nationally in children well-being
  • Updates on California’s school system performances across counties
  • New IRS mandate for nonprofits e-filing



Natural Disasters: Philanthropy’s Role in Cross-Sector Partnerships

In light of the recent earthquakes affecting our Southern California communities, it is important for philanthropy to establish a pathway for building greater disaster resiliency. Monitor Institute by Deloitte has released a report that outlines six key investment strategies designed to bolster disaster resiliency through public and private collaboration in order to prepare communities during and after disasters. 

With the Governor and State Legislature’s launch of the California for All Emergency Preparedness Campaign, there is a louder than before calling for collaboration between public and private funders to prepare communities during and after disasters. The report identifies key opportunity areas for impact, which include:

  • Building disaster-informed funders;
  • Harnessing and coordinating resources from committed corporates;
  • Resource county-level, local coordination bodies for community mobilization;
  • Strengthening the state’s role for coordinating volunteers and donations
  • Nurturing community resilience networks; and
  • Democratizing disaster learning resilience by boosting transparency and access around available information.


Philanthropy California has stepped up to lead one of the six strategies, fostering community-based disaster preparedness, response, and recovery by developing more coordinated and proactive plans and processes for funding. Stay tuned for a disaster relief summit hosted by Philanthropy California later this year! 

Funders interested in bolstering disaster resiliency can learn more here. Interested in learning more about philanthropy's in disaster relief? Attend, Reimagining Philanthropy’s Role in Building Resilient Communities: Addressing Extreme Natural Events Head On to learn the science behind California disasters and resilience investments and the role of philanthropy now and in the future. 



Spotlight on the Legislature

Dive into the 2019-2020 State Budget

Curious to learn more about the adopted state budget covered in last month’s Public Policy Roundup? The California Budget and Policy Center has published a “First Look analysis of the 2019-2020 state budget.



State Treasury Launches CalSavers: State Retirement Plan for Seniors

Earlier this month, the California State Treasury Office announced the launch of the CalSavers program, a retirement savings program administered by the state government designed to ensure that all Californians can gain financial security throughout retirement. According to the University of California, Berkeley Labor Center, more than half of California’s seniors will face retirement insecurity and live under 200 percent of the federal poverty threshold. CalSavers provides small to mid-sized employers, who often cite financial and administrative burdens as a reason to opt-out of offering their employees a retirement plan, a public alternative to a traditional retirement savings program that significantly lifts the administrative and financial dues off of these businesses. Similar state-run retirement savings programs in Oregon and Illinois have replicated California’s model.



The Trump Administration’s Proposal to Shrink the Federal Poverty Line Would Leave Thousands of Californians without Access to Public Support Programs 

The California Budget and Policy Center published an analysis of the Trump Administration’s proposal to shrink the poverty line by changing the standard inflation measure currently used to define the federal poverty line. Alternative forms of measurement suggested in the proposal would not only make the poverty thresholds increase over time, but would also make the federal poverty line less accurate. The changes would reduce low-income individuals’ access to vital public support programs such as Medi-Cal, CalFresh, basic nutrition, and home energy assistance through the Low Income Home Energy Assistant Program (LIHEAP). The proposal would particularly impact California, where the cost of living for families is much higher than in other states across the country. 




Philanthropy Takes Action: Child Poverty Reduction

This month, Southern California Grantmakers submitted a letter of support for Senate Bill 298: Poverty reduction, introduced by Senator Anna Caballero. This bill would establish the End Child Poverty Act of 2020 and commit California to a goal of ending deep child poverty within four years and reducing child poverty by 50 percent over the next 20 years using research-backed solutions. As the state with the highest rate of child poverty in the nation, this bill would give Californian lawmakers a permanent, long-term focused framework and specific targets to inform and guide budget and legislative decisions to alleviate child poverty.



2019 KIDS COUNT Data Book Ranks California No. 35 in Child Well-Being

In June, the Annie E. Casey Foundation released their 2019 KIDS COUNT Data Book, reporting on the well-being of 74 million children across the nation, ranked by state. Determining child well-being based on four indicators including economic well-being, education, health, and family community, California ranked number 35 overall for children well-being but ranked 46 in economic well-being with nearly 1.6 million children living in poverty.

Some highlights of the report show several areas of significant progress from 2010 including lower rates of teenage pregnancies, fewer children living without health insurance and more children are living in households not burdened with high housing costs. However, when disaggregated by race and ethnicity, the report reveals stark racial disparities in children’s well-being. For example, African American and American Indian children nationwide are three times as likely as their white counterparts to grow up in poverty.



Child Welfare Policy Roundtable: Youth Homelessness

Every month, Children Now and the Assembly Foster Care Select Committee co-host the Child Welfare Policy Roundtable, which highlights the significant welfare and foster care issues facing California. The monthly Roundtable features a panel of policymakers, practitioners, advocates, and former foster youth and provides an opportunity to learn more about California’s child welfare system. This month’s Roundtable provided a budget update on programs impacting child welfare and highlighted the state’s recent investments in youth homelessness. Funders interested in learning more can view this month’s full list of speakers and their resources below. 




California School Dashboard: How Are California Schools Doing?

The California Department of Education developed an interactive dashboard to search and compare the latest data on California school and district performances. The California School Dashboard contains reports that display the performance of local educational agencies (LEAs), schools, and student groups on a set of six state and local measures: Chronic Absenteeism, Career and College Readiness, Suspension Rates, High School Graduation Rate, English Language Arts and Math Performance. Funders can utilize the tool to help them identify strengths, challenges, and areas in need of improvement. A few highlights include: 

  • Orange County demonstrates the highest performance in Mathematics when compared to other Southern California counties.
  • Riverside and San Bernardino are the lowest-performing counties for Career and College Readiness and English Language Arts when compared to neighboring counties.
  • Graduation Rates scored the best in Kern and Orange County.





Tracking California’s Early Education Bills

California’s commitment to improving access to and quality of early education is not only evident through priorities set in the state budget, but also proposed bills in the State Legislature. A legislative tracking list compiled and monitored by EdSource follows 27 Senate and Assembly bills that relate to child care access, paid family leave, access to preschool and kindergarten, and more. Funders interested in following policies impacting early education and child development can find the complete list of proposed bills below. Some notable bills include:

  • Assembly Bill 197 (Assemblymember Weber) which would require all schools with kindergarten programs to offer at least one full-day kindergarten class aimed at giving students more time of learning.
  • Assembly Bill 406 (Assemblymembers Limón and Gonzalez) proposes a requirement that applications for paid family leave benefits be translated into multiple languages to allow Californians who speak a language other than English to apply for paid family leave.





Analysis on Taxpayers First Act: Nonprofits Now Required To File Tax Forms Electronically 

The newly enacted Taxpayers First Act (Public Law 116-25) is the first substantial modification reform to the Internal Revenue Service (IRS) in over two decades, revising its organizational structure, increasing cybersecurity measures and revising requirements for electronic filings. The new law also requires all tax-exempt organizations filing a Form 990 and political organizations that receive or spend funds for tax-exempt functions filing a Form 8872 to file their annual tax returns electronically and made available in a machine-readable format. The Taxpayers First Act was introduced by Representative John Lewis (D-GA-05) and signed into law on July 1st, 2019. This provision is effective for tax years beginning after the law’s enactment, but it allows the IRS discretion to offer a two-year transition relief for smaller organizations. Additional highlights related to this provision include: 

  • Private foundations and charitable trusts, regardless of asset size, that file at least 250 returns during a calendar year are also required to file their Form 990-PF information returns electronically. 
  • Tax-exempt organizations that have assets of $10 million or more and that file at least 250 returns during a calendar year must electronically file their Form 990 information returns. 
  • Organizations with gross receipts less than $200,000 and with total aggregate assets of less than $500,000 at the end of the taxable year can request the two-year transition relief. This transition relief may also extend to organizations filing Form 990-T.  





IRS Issues Guidance on New 1.4 Percent Tax on Net Investment Income for Top Wealthiest Universities 

On Friday, June 28th, 2019, the Internal Revenue Service released the proposed tax guidelines for higher education institutions. These institutions are now required to pay a new tax on their endowments as outlined under the 2017 Tax Cuts and Jobs Act. The 1.4 percent excise tax on net investment income targets universities with at least 500 tuition-paying students and with assets of $500,000 per student. The proposed rules define how colleges and universities calculate the number of full-time students and offer some guidance about what income and assets are subject to the tax. The newly proposed regulations are estimated to impact between 25 to 40 institutions.  

A recent study’s estimates of giving for 2018-2025 indicate that up to 2.6 million fewer households are likely to donate each year and charitable giving could decrease by $19.1 billion each year after the 2017 tax act. While the 1.4 percent excise tax affects a relatively small number of institutions, the tax transfers money from higher education institutions to the federal government and thereby dilutes the ability of the higher education endowment to fulfill its mission. With a large portion of charitable gifts allocated to university endowments, college, and university, leaders are concerned that the new tax could deter essential funds and deter potential donors.




2020 Census

Earlier this month President Trump announced that he would no longer pursue the addition of the citizenship question on the 2020 Census. However, he noted that the government would use existing administrative records to determine citizenship information. SCG will continue to connect with local and national partners to understand how federal departments and agencies intend to provide this data and the implications on our communities.

SCG and Philanthropy CA will continue to work with local, statewide, and national partners to ensure that the census is funded promptly and adequately. We will also work with the state, regional, and statewide funders to ensure that we are aligned and not duplicating efforts. For more information, please contact Karla Mercado at [email protected].



Ensuring a Fair Representation in California

As we continue to work towards a fair and accurate census, it is easy to forget that the work will continue after April 2020. After the census, California will go through the redistricting process, which involves redrawing political districts at the federal, state, and local levels. This process is crucial as it helps California residents have a fair opportunity to representatives who will be responsive to our communities’ needs.

California re-draws federal and state districts though the Citizens Redistricting Commission (CRC). The CRC is an independent commission of 14 Californians who are neither legislators nor public officials. The CRC is currently accepting applications. It is imperative that the Commission members reflect the demographics and geographic diversity of our state. The initial application deadline is August 9, 2019 and only takes only about 10 minutes to complete.



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