3 Key Aspects of the Nonprofit SEAT Act

Nonprofits are known to fill the gaps in government programs. A lot of organizations are even funded by various levels of government, but their ability to work together doesn't tend to go much further than that.

Last week, U.S. Reps. Betty McCollum and Nancy Mace introduced The Nonprofit Stakeholders Engaging and Advancing Together Act, aka the Nonprofit SEAT Act. The bill aims to strengthen the nonprofit sector’s relationship with the federal government to achieve common goals, raise awareness of the nonprofit sector’s vital contributions to the country, and encourage volunteerism and charitable giving.

The bill’s objectives keep in mind both the differing sizes of nonprofits and the commonly underserved communities they serve. If passed, it would receive $50 million in appropriations for each of the fiscal years from 2024 through 2028. 

Here is how the Nonprofit SEAT Act, if passed, would better the nonprofit sector.

1. Strengthen Partnerships With the Nonprofit Sector

The Small Business Administration (SBA), supports small businesses, but, to date, the nonprofit sector has not had a similar agency to lean on or to ensure its voice is heard at the federal level. 

“The nonprofit sector’s unique ability to harness and direct the generosity, service and volunteerism of the American people benefits all of us, and just as small businesses have the SBA to facilitate access to federal resources, so too should the nonprofit sector enjoy this level of support,” McCollum, a Minnesota Democrat, said in a statement.

If passed, the Nonprofit SEAT Act, would create a federal office, council and advisory board directly focused on the nonprofit sector.

Office on Nonprofit Sector Partnership

Led by a nonprofit adviser, the Office on Nonprofit Sector Partnership would be located in the Executive Office of the President. This office would identify policy improvements to better the sector, including the ability to serve communities, fundraise and recruit volunteers. 

This office would also build an online portal to allow nonprofits to submit single filings for registration and reporting to all states that choose to participate. The goal of this system is to help eliminate inefficiencies, streamline fundraising registration across multiple states, improve operations among all levels of government, and maintain cybersecurity standards, among other aspects.

Interagency Council on Nonprofit Sector Partnership

The Interagency Council on Nonprofit Sector Partnership would be part of the executive branch, and also headed by the nonprofit adviser. Its members would include the head of each cabinet agency, plus the Corporation for National and Community Service (aka AmeriCorps); National Endowment for the Humanities; National Endowment for the Arts; National Science Foundation; Institute of Museum and Library Services; and any other agency the president wishes to add. 

The council will publish biennial reports with recommendations for sector improvements, such as research and data access and transparency; civic infrastructure investments; and legislation; as well as improving nonprofits ability to address national issues.

Advisory Board on the Nonprofit Sector

The Advisory Board on the Nonprofit Sector would advise the president and provide analysis and evaluation on relevant topics, including but not limited to nonprofit sector policy, volunteerism and service. Aside from meetings, it would submit a biennial report to Congress that reflects on the state of the nonprofit sector, federal policy, the nonprofit-government partnership and more.

The nonprofit adviser and a member from a different political party would co-chair an experienced and diverse 16-member board. The board would consist of:

• The nonprofit adviser and seven additional president-appointed members.
• Two members appointed by the speaker of the House of Representatives.
• Two members appointed by the minority leader of the House of Representatives.
• Two members appointed by the Senate majority leader.
• Two members appointed by the Senate minority leader. 

2. Maximize Opportunities to Improve the Communities Nonprofits Serve

Various federal agencies will evaluate current programs to locate ways to better serve nonprofits. Other federal departments will provide analysis on how policy will affect the nonprofit sectors. Many of these efforts will rely on involvement and input from the three nonprofit entities this bill proposes to create.

“Recovery efforts from recent natural disasters are an immediate and painful reminder that better coordination between the federal government and nonprofits can have a critical impact on the lives of real Americans,” Dr. Akilah Watkins, president and CEO of Independent Sector, said in a statement. “The Nonprofit SEAT Act would strengthen the 1.8 million nonprofits that already help virtually all Americans and represent 5.6% of the GDP, and it would improve the way government and charities work on the ground in communities across the country to support people in need.”

“By giving the nonprofit sector a seat at the table, we can ensure their unique perspectives and expertise are considered in federal decision-making, while also ensuring they have access to the resources they need,” Mace, a South Carolina Republican, added in her statement. “There are a number of federal resources available to nonprofits, and it is encouraging to know they will now have help facilitating access so they can continue their great work making a difference in their local communities.”

Here are some of the proposed tasks for federal agencies to better the nonprofit sector if the bill becomes law. 

AmeriCorps

AmeriCorps, the federal agency for national service and volunteerism, would create a biennial Congressional report on how to best support the non-stipended volunteer force and the national service community, as well as make recommendations — with nonprofit input — on how to create volunteerism, charitable giving and civic engagement supplements for Census Bureau and Bureau of Labor Statistics’ Current Population Survey. 

Additionally, the agency would relaunch eGrants to better engage new grantees that represent or reach underserved and marginalized communities by eliminating barriers for submitting grants. It would also ensure its existing programs — Volunteer Generation Fund and the Nonprofit Capacity Building Program — support nonprofits, and improve its service year fellowships to broaden access to national service in underserved and marginalized communities, as well as increase capacity for nonprofits during increased need. 

“National service programs provide an essential vehicle for Americans of all ages eager to serve  their communities and transform their own lives in the process,” according to the bill. “Service programs also provide a critical pipeline of emerging leaders into the workforce, including the nonprofit workforce.”

Government Accountability Office

To create a congressional report, the Government Accountability Office would seek to differentiate nonpartisan civic engagement and the current prohibition on political campaign intervention for 501(c)(3) organizations.

Treasury Department

The Treasury Department will review — and publicly release — the impact government regulations would have on charitable giving and the nonprofit sector, including analysis on whether it would impact specific demographics. It will also consider reconstituting the Advisory Committee on Tax Exempt and Government Entities.

3. Collect and Share Data About the Nonprofit Sector

The nonprofit sector workforce includes more than 12.5 million workers, 20 million board members, 60 million volunteers and millions more donors. U.S. nonprofits paid $670 billion in wages in 2017, according to the bill. However, no federal agency currently collects employment data on the nonprofit sector. 

The nonprofit sector, which is the third largest U.S. workforce, lost approximately 1.6 million jobs during the pandemic, and continues to struggle with workforce shortages and hiring difficulties. Data specifically for the nonprofit sector could help support nonprofit challenges and maximize federal investments aimed toward addressing community needs, which this bill sets out to do. 

Here’s an overview of the types of data that would be created if the Nonprofit SEAT Act is passed.

Department of Commerce. Within its national accounts program, the Bureau of Economic Analysis would create a satellite account on nonprofit and related institutions and volunteer work within its national accounts program at least on a biennial basis. 

Department of Labor. The Bureau of Labor Statistics would publish a biennial report on non-stipend volunteer force trends.To do so, it would also create a new employer category for nonprofit organizations in its Quarter Census of Employment and Wages report. 

Office on Nonprofit Sector Partnership. This proposed office would also coordinate nonprofit data across government agencies and publicly release it annually. This nonprofit sector data would consist of the economic health and impact of the sector, including employment and wage data; federal funding, including grants and contracts; the Census; and more.

Treasury Department. The department would recommend to Congress how to create data from nonprofits’ Form 990 filings and improve public access to the digital forms.

White House. The Office of Management and Budget would collect nonprofit data from all relevant federal agencies. This data may include clients served broken down by various demographics; revenues, expenses and operating reserves broken down by organization size and mission; and volunteer hours.

Approximately 450 organizations currently support the bill. To join them, you can sign the  Independent Sector’s support form on behalf of your nonprofit.