The Future of Non-Profits

Posted by Leighton Cooper on June 24, 2010

The non-profit community is nearing the verge of another ground-breaking piece of legislation this summer. Last week on June 16th, Congresswoman Betty McCollum (D-MN) introduced a bill aimed at strengthening the non-profit sector and its relationship with government. In the wake of the Serve America Act and on the heels of sweeping regulatory legislation concerning for-profit business is the movement for more attention to organizations under tax code 501(c) (3).

Our friends at Independent Sector summed up the proposed bill nicely. The four intents highlighted are:

  1. Create a US Council on the Non-profit Sector and Community Solutions that advises the President and Congress on working more effectively to “address challenges” and “maximize opportunities.” This council would present an annual report detailing its studies on the roles and relationships between non-profits and government, and the benefits, barriers and other problems concerning non-profit endeavors.
  2. Create an Interagency Working Group including members of several cabinets coordinating policies concerning relationships with non-profits.
  3. Charge another agency to collect data from other federal agencies concerning several aspects of the financial health of the non-profit sector and its community members. Charge the Bureau of Economic Analysis at the Department of Commerce with determining a system to measure the economic impact of non-profits.
  4. Create a Non-profit Research Fund to further facilitate broad basic and applied research and training concerning the sector.

This past Friday I had the opportunity to listen on a conference policy briefing hosted by Independent Sector concerning this new legislation. Tens of other organizations from across the US joined the informative conversation led by Peter Frosch, McCollum’s Legislative Director.

He began by chronicling the inspirations behind Rep. McCollum’s interest in non-profits. Two years ago, a routine inquiry into the Congressional Research Service’s Report on non-profit businesses yielded exactly zero results. Betty McCollum and her staff thought it strange the reality that the government had fundamentally no organizational bodies concerning non-profits and their work. Not even the CRS had compiled an annual report on non-profits. Determining that this trend was indeed troubling, Betty McCollum and her staff embarked on the process to create this legislation.

For about the past 24 months, McCollum and her colleagues have been pounding the pavement and the parchment. They have gotten in contact with several important leaders and have put those efforts in writing. The text may be complete as soon as this week, and introduced as soon as next week. McCollum will introduce perhaps the most important measure concerning non-profits in our history.

Peter Frosch asserts that, distinct from more contentious political issues, this legislation carries a connotation of being a “smart government initiative” and should receive support from both sides. This whole sector was in the “blind spot” of Congress according to Mr. Frosch. Certainly the non-profit world carries a unique set of challenges compared to other sectors.

The non-profit world lacks the resources of big, for-profit businesses.  However, non-profits are tasked with tackling many of our nation’s most pressing social challenges that large corporations are not setup to address. This societal and economic impact is yet to be measured by our government. It is crucial to establish metrics to determine just what those impacts are.

Essentially this bill will help create the governmental infrastructure to analyze and address the growing importance of the non-profit community. Currently our bureaucracy lacks the capacity to understand the dynamics of this sector.

Mr. Frosch said that this bill will help “government understand what kinds of questions it should be asking” us in the non-profit arena. We keenly await the passing of such monumental legislation. Certainly, ServeNext is eager to volunteer answers to those questions and help however we can to advance this legislation.


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