Top 10 Events in 2012

Here are our top 10 events of 2012 affecting the nonprofit sector (listed in chronological order):

1. Hull House Closure
2. Komen for the Cure-Planned Parenthood Controversy
3. Facebook Goes Public
4. Reinstatement of University of Virginia’s President
5. Affordable Care Act
6. Degrees in Philanthropic Studies
7. Lance Armstrong Stripped of Cycling Medals
8. U.S. Presidential Election
9. Shooting at Sandy Hook Elementary School
10. Fiscal Cliff

1. Hull House Closure - 2012 kicked off with the announcement in January that the iconic Hull House started in 1889 by Jane Addams as a settlement house for Chicago's immigrants would be closing down after filing for bankruptcy. Although the specific reasons leading to the Hull House closure may be varied and speculative, it symbolizes the especially difficult environment that today's nonprofits are facing after the 2008 recession with increased encroaches on exemptions at local and state levels, decreased federal funding, and increased demands for social services with less resources.

Additional resources:

• Death of the Hull House: A Nonprofit Coroner's Inquest - The Nonprofit Quarterly
• Some Fear Hull House Closure Is an Omen for Struggling Charities - The Chronicle of Philanthropy

2. Komen for the Cure-Planned Parenthood Controversy - The start of 2012 also saw a public relations debacle that would be talked about for the rest of the year. The Associated Press broke news that Komen was stopping grants to Planned Parenthood used for breast cancer screenings and education programs. Within hours, Planned Parenthood initiated a public relations campaign that, for many of its supporters, has made Komen as synonymous with pro-life as it is with breast cancer. Komen, on the other hand, was largely criticized for its public relations tactics in remaining silent for over a day after the news broke and providing inconsistent explanations for its defunding decision. Although Komen quickly reversed its decision one month later, the aftermath for Komen included widespread public outcry and concern, resignation by four executives including Komen’s Vice President within a week, and an announcement six months later by the founder of her resignation as CEO.

Additional resources:

• The Accidental Rebranding of Komen for the Cure - Kivi's Nonprofit Communications Blog
• Cancer Group Backs Down on Cutting Off Planned Parenthood - The New York Times

3. Facebook Goes Public - Facebook's initial public offering (IPO) in May was one of the most widely anticipated IPOs in history. The expected windfall for Facebook executives and employees sparked interest in, and questions for, nonprofits hoping to (1) attract some of this newfound wealth through donations of stock or money or (2) build other relationships with these individuals such as partnerships or board service. Although the IPO has failed to meet expectations, it continues to raise broader questions about new generations of wealth and philanthropists, many of which have acquired their wealth from the technology sector, and the role they play in the future of philanthropy. Notably, on December 18, Facebook founder Mark Zuckerberg announced his donation of nearly $500 million worth of Facebook stock to the Silicon Valley Community Foundation.

Additional resources:

• Charities Seek Some of Facebook’s Billions - The Chronicle of Philanthropy
• Young Internet Tycoons Hurry to Embrace Big-Scale Philanthropy - The Chronicle of Philanthropy

4. Resignation and Reinstatement of University of Virginia’s President - In June, The New York Times reported that the Board Chair of the University of Virginia sought and accepted the President’s resignation without full involvement by the Board. The poorly handled decision quickly fueled a fire of backlash including a critical statement published by Virginia Governor Bob McDonnell and 16 days of protest on the University campus by students, faculty, and other members of the community. Although the Board ultimately retracted and unanimously voted to reinstate the President, the stability and ability of the Board leadership continued to be debated and the story continues to serve as a lesson for the nonprofit sector about proper governance.

Additional resources:

• The University of Virginia Debacle - A lesson in being responsible about your responsibilities - The Nonprofit Law Blog
• Ousted Head of University Is Reinstated in Virginia - The New York Times
• U.Va. Board Details Governance Improvements in SACS Response, Releases President’s Extended Contract - The University of Virginia Magazine

5. Affordable Care Act - In June, the United States Supreme Court upheld the constitutionality of most of the Patient Protection and Affordable Care Act (ACA) signed into law in 2010. A provision under the most recent version of the ACA requires most health insurance plans to provide preventative healthcare, including contraceptive coverage, to women free of charge. Religious colleges and hospitals were resistance to the new health care reform law and sought exemption under the Religious Freedom Restoration Act. Before the provision went into effect, a number of federal lawsuits were filed challenging the rule and the Congressional Republicans made an attempt to block the policy. In response, the Obama Administration provided an accommodation whereby church-affiliated organizations would not have to provide or pay for the coverage. Legal debate continues as to whether the ACA infringes on religious liberty under federal law.

Additional resources:

• Contraception and Insurance Coverage (Religious Exemption Debate) - The New York Times
• Health Reform, Preventive Services, and Religious Institutions - The White House

6. Degrees in Philanthropic Studies - Back in 2010, the Indiana University-Purdue University campus in Indianapolis (IUPUI) launched the first known undergraduate degree program in Philanthropic Studies. This May, five students were awarded the first undergraduate degrees in Philanthropic Studies from the Center of Philanthropy at IUPUI. This year, IUPUI also received approval from the Indiana Commission for Higher Education to establish a School of Philanthropy, which is reported to be the world's first school dedicated to studying and teaching philanthropy. Philanthropy degrees are considered one of the fastest growing fields in academia with over 137 American graduate schools offering such advanced degrees as of 2007 according to The NonProfit Times.

Additional resources: 

• 5 Receive Nation’s 1st Undergraduate Degrees in Philanthropic Studies - The Chronicle of Philanthropy
• Nation’s First School of Philanthropy Gets Approval - The NonProfit Times
• Getting Advanced Degrees - The NonProfit Times

7. Lance Armstrong Stripped of Cycling Medals - In October, Lance Armstrong was stripped of his seven Tour de France titles and banned for life from cycling by the International Cycling Union after the U.S. Anti-Doping Agency found Armstrong guilty of doping. Shortly after, Armstrong stepped down from his position as chairman of the Livestrong Foundation, a charity he founded in 1997, amidst the controversy. Some supporters have been vocal about their discontent, asking for a return of their donations in light of these events. While the Foundation has not reported any major fall-outs since the news broke, the full degree of any damage may not been seen until next year.

Additional resources:

• Doping scandal costs Lance Armstrong sponsors, charity role - CNN
• Lance Armstrong doping allegations could leave lasting stain on Livestrong - The Washington Post

8. U.S. Presidential Election - This year saw the first Presidential election since the U.S. Supreme Court’s highly criticized Citizens United decision which opened the door to indirect political spending by corporations.  The New York Times reported that the money raised through September totaled $1072.6 million for Democrats and $992.5 million for Republicans. The Center for Responsible Politics also reported an estimated $6 billion in spending, making the 2012 presidential election the most expensive in history. These astronomical figures were largely credited to an increase of “dark money,” a major theme in this year’s election.

 Additional resources:

• The 2012 Money Race: Compare the Candidates - The New York Times
• Independent Spending Totals - The New York Times

9. Shooting at Sandy Hook Elementary School - On December 14, a national tragedy occurred at Sandy Hook Elementary School in Newton, Connecticut when a shooting rampage resulted in the fatalities of 20 children, 6 adults, and the shooter. Described by President Obama as the "the worst day of my presidency," the Sandy Hook tragedy has highlighted the issues of both gun violence and mental illness for the public and nonprofits. The National Rifle Association, for example, held a press conference the following week on the gun debate, suggesting armed guards at every school. These discussions will undoubtedly carry on into 2013 and many nonprofits will likely step up their issue advocacy and vocalize their policy positions on proposed or current legislation. 

 Additional resources:

• Remarks from the NRA press conference on Sandy Hook school shooting, delivered on Dec. 21, 2012 (Transcript) - The Washington Post
• NAMI on Sandy Hook/Mental Illness Connection—or Lack Thereof - The Nonprofit Quarterly

10. Fiscal Cliff - As late as December 31, the country appeared headed for a fall off the “fiscal cliff” of an estimated $500 billion in tax increases and $200 billion in spending cuts that are set to occur in 2013 due to the expiration of the 2010 Tax Relief Act and planned spending cuts that go into effect under the Budget Control Act of 2011. There had been great concern that without a deal the fiscal cliff would lead to another recession. 2012 closed with a Senate agreeing to a deal that resulted in a bill in the early hours of January 1 that was passed by the House shortly thereafter. As the legislation included provisions that impact charitable deductions by the wealthy, delayed $110 billion in federal spending cuts, and called for significant changes to the tax code, many nonprofits remain deeply concerned about how they will be impacted, particularly with respect to any changes to the deductibility of charitable contributions, federal funding cuts to public programs, and unemployment rates.

 Additional resources:

• The Fiscal Cliff: Absolutely everything you could possibly need to know, in one FAQ - The Washington Post
• The Fiscal Cliff and Nonprofits - The National Council of Nonprofits
• The Fiscal Cliff Legislation: A Primer for Nonprofits on Its Provisions - The Nonprofit Quarterly

 

Honorable Mentions:

• Kony 2012 - A San Diego-based nonprofit, Invisible Children, produced the biggest viral sensation known to date when it released Kony 2012, a 30-minute video on Josephy Kony, a rebel war leader of the Lord’s Resistance Army (LRA), on March 5. It acquired almost 40 million views on YouTube within the first week. Not all reactions were positive however. Invisible Children also quickly came under scrutiny for its governance and management practices and has been criticized for its ability to sustain and capitalize on the widespread support and attention it gained earlier this year.

• Program Related Investments, Proposed Regulations Released - In April, the IRS released long-awaited proposed regulations updating examples of program related investments for private foundations. This was the first update since 1972. Of the proposed regulations, the IRS authorized that taxpayers may rely on nine of these examples now before the regulations are finalized (see proposed Treas. Reg. Section 53.4944-53(b), examples 11 - 19).

• Equivalency Determinations, Proposed Regulations Released - In September, the IRS released proposed regulations for equivalency determinations for private foundations engaged in international grantmaking. Among the proposed changes includes a broader class of practitioners whose written advice may be relied upon by a private foundation in making a good faith determination that a foreign NGO is equivalent to a U.S. public charity. Such proposed regulations are expected to result in increased international grantmaking and support initiatives to create an equivalency determinations repository.

Last year's post on the Top 10 Events of 2011 can be read here.