Proposed Tax Bill Will Impact Nonprofits’ Ability to Expand Facilities and Services

Three leading voices in nonprofit finance, education and advocacy have voiced opposition to a portion of the proposed tax bill that would negatively impact health care and humans service ministries.

If the bill passes as presented, nonprofits will lose access to the tax-exempt market at the end of the year. “This will be a significant cost” to CHHSM-member ministries, adding 1-2 percent to the cost of new borrowing, says Malcolm G. Nimick, president of Ascension Capital Enterprises, a firm that provides independent financial and strategic consulting to nonprofit organizations.

The proposed legislation eliminates Private Activity Bonds for 501c3 organizations, as well as Advance Refundings. If the current bill passes, “the mechanism [used by nonprofits] to finance their growth will no longer be an option,” says Lisa McCracken, director of senior living research and development for Ziegler Investment Banking, a privately held investment bank, capital markets, wealth management and proprietary investments firm specializing in healthcare, senior living, education and religion nonprofits.

Both experts point to LeadingAge — the 6,000-member nonprofit organization that advocates for education, advocacy and applied research regarding senior centers — as a source for information and action regarding the proposed bill’s impact on CHHSM-member ministries.

Additionally, Nimick and McCracken recommend these articles for additional reading: Muni market blindsided by bond provisions in House GOP tax plan; Republicans Push to End Muni Sales by Businesses, Stadiums; and Tax Tradeoffs Would Leave Muni Market Unrecognizable.