In Support of the Nonprofit Community
The writers of The Denver Post Feb. 28 story “How the charities on your Colorado tax form used political clout, little state oversight to earn a coveted spot” ultimately cast an unfair, negative light on the entire Colorado charitable community.
Instead of a balanced account of a bipartisan program, The Denver Post presented a one-sided opinion of the state income tax checkoff program that directly benefits local charities and communities.
The article also unfairly referenced a nonprofit’s legitimate role in shaping public policy and engaging with legislators. It is entirely appropriate and ethical for legislators to work with nonprofits to generate more resources to meet the needs of their communities.
For example, like many legislators who work with nonprofits to direct state funding to support specific community needs, Rep. Leslie Herod worked with Urban Peak on a bi-partisan bill that will increase private donations to their cause, and ultimately serve youth experiencing homelessness in several areas of the state.
As a result of Rep. Herod’s past service on the Urban Peak Board of Directors, she understands the urgent issues faced by youth experiencing homelessness. Rather than benefitting personally, it is the people of her district who will benefit from her continued advocacy for homeless youth.
By building relationships with state legislators, with or without professional assistance from lobbyists, nonprofits can advocate for their missions and effectively meet the needs of the people they serve.
The Denver Post article also assumes that nonprofits lack oversight, which devalues current state regulations of the sector and the quality leadership of nonprofits.
Colorado’s nonprofits are trustworthy, ethical and work hard to follow the many laws governing their tax-exempt status and solicitation of donations.
With the exception of churches and nonprofits with fewer than $25,000 in annual revenue, all Colorado nonprofits are required to register with the Secretary of State and provide financial and leadership information, as well as the IRS tax return under Colorado’s charitable solicitations guidelines.
Colorado Nonprofit Association has contacted The Denver Post in the hope to educate their editors and reporters on why delivering coverage with this level of connotation is so harmful to the nonprofit community as a whole – a sector so crucial to maintaining the high quality of life in our state.
We strongly believe the message of “donor be aware” rather than “donor beware” must be defined and at the forefront of media coverage. By visiting the Secretary of State’s website, donors can easily search for charities online and learn about an organization’s main sources of revenue, how donations are used, and whether and how donated funds are spent for lobbying.
The nonprofit sector is consistently held to a high standard in reporting, and many charities go above required standards to provide a greater level of transparency to donors in annual reports and other collateral. Donors should use this information to decide what nonprofits are worthy of their donations.
Tax Checkoff Program
While it is important to first remember all of the information stated above, it is also important to call attention to The Denver Post’s biased account of the Colorado voluntary tax checkoff program by which taxpayers may designate a portion of their income tax refund to specified charities.
This program is not unlike the strategies employed by most nonprofits to raise private donations to support the services they provide.
Where it does differ is in the platform for delivering the opportunity, which has become an efficient method for marketing charitable causes to donors and the community. The program is one way for nonprofits selected by the legislature to reach donors at a time when they may have additional money to give. It is also a convenient way for donors to financially support participating nonprofits and is cost-efficient for the recipient charities.
Although Colorado was the first state to adopt a tax checkoff program in 1977, most states have followed suit and developed their own versions. Despite what The Denver Post article may imply, the approach Colorado takes is very typical among states with a similar program.
Tax checkoff programs are authorized by legislation – Colorado’s included – and legislators are tasked with the difficult determination of which organizations are added or removed every few years.
To clarify the process for how charities are selected to participate – the selected organizations are authorized for a five-year period, and each must work with legislative sponsors to pass a bill to be renewed for an additional five years. Following a two-year grace period, a participating organization must raise $50,000 per year to be on the form for the next year.
Although legislators were able to expand the tax checkoff form for 2017 with little additional expense to the state, Colorado Nonprofit Association believes the program could be improved and expanded further to continue to benefit organizations across the state, thus expanding options for taxpayers.
In 2016, we convened several stakeholder meetings to discuss changes to the tax checkoff program but we did not reach a consensus on how to best move forward. The conversations included considering the approaches of many other states’ tax checkoff programs. Colorado Nonprofit Association has continued in 2017 to remain engaged in discussions to evaluate opportunities for nonprofits to participate in the program in fair and equitable ways without incurring unreasonable state administrative costs.
All of this conversation in the media and the public is important, and must be presented fairly. It is our hope that donors will educate themselves on the charities they choose to support, instead of starting with a skeptical view of an entire sector.
For more information on how Colorado Nonprofit Association supports charities across the state by providing training and resources in all areas of effective governance and operations, including advocacy, explore our website at ColoradoNonprofits.org.