There are several nonprofit organizations in the United States with missions aimed at assisting refugees. These nonprofits provide direct assistance, such as food and clothing, to individuals who are currently living in a foreign country, or help refugees that have recently arrived in the U.S. find housing and settle in the country.
On February 2, 2017, President Donald Trump issued a revised executive order to protect the nation from foreign terrorist entry into the U.S. This order directly affects refugees and the nonprofits that serve them.
What does this revised executive order mean for those nonprofits that help refugees coming from the countries included in the executive order? Will this result in less government funding? How can those affected nonprofits take action?
The revised order states the following:
- The executive order includes refugees from Syria, Iran, Libya, Somalia, Sudan and Yemen.
- The U.S. is suspending the Refugee Admissions Program for 120 days.
- Upon resumption of the U.S. Refugee Admissions Program, the U.S. will not accept more than 50,000 refugees for fiscal year 2017.
- The Executive Order does not apply to refugees whom the State Department has already formally scheduled for transit.
- During the 120-day suspension of the Refugee Admissions Program, the Secretary of State and Secretary of Homeland Security have the discretion to jointly determine to admit individuals as refugees on a case-by-case basis if they determine that entry of such individuals as refugees is in the national interest and would not pose a threat to U.S. security or welfare.
Charity Navigator uses several requirements to compile a list of U.S. nonprofit organizations that provide assistance to refugees. Nonprofits included on the list:
- Currently have a 3- or 4-star rating
- Have a description of the planned response and type of relief it is, or will provide, on their website
The size of these nonprofits ranges from half a billion dollars to a couple of million dollars. Below is a snapshot of a few examples of such nonprofits included in Charity Navigator’s List:
The International Rescue Committee Inc. -New York
- 4-star rating.
- Annual budget of $688 million for fiscal year ending September 30, 2015.
- The mission is to respond to humanitarian crises, helping people survive, recover and reclaim control of their future.
- Per their audited financial statements, 65% of their revenue comes from Government grants and contracts while 32% of their total income is from private dollars.
- In 2015 the IRC helped resettle 9,961 newly arrived refugees in the U.S. including 320 Syrians.
American Refugee Committee
- 4-star rating.
- Annual budget of $47 million for fiscal year ending March 30, 2015.
- ARC programs serve nearly 2.5 million people each year, providing health care, clean water, sanitation, shelter, gender-based violence prevention services, microenterprise development, disease prevention services, education, legal services, counselling and repatriation assistance.
- Per their audited financial statements, 89% of their revenue comes from Government grants and contracts and only 9% of their total income is from private dollars.
- 4-star rating.
- Annual budget of $4.6 million for fiscal year ending December 31, 2015.
- ActionAid works in more than 40 countries across Africa, Asia and Latin America, with over 25 million poor people. ActionAid seeks to create and sustain better futures by providing relief from disasters and conflicts, empowering women, fighting hunger, holding governments accountable, and making education accessible.
- 100% of their revenue is from private contributions, gifts and grants.
Based on the review of the above and other nonprofits listed on Charity Navigator, the majority show income is from private donors as opposed to government contracts. The executive ban may affect the number of constituents nonprofits are able to serve in the U.S., but in keeping their current fundraising strategies, their revenue may not be impacted.
The ban will reduce the number of refugees coming into the U.S. by half of what was allowed in prior years. Even if nonprofits cannot physically help new refugees entering the U.S., they do have the option to lobby on their behalf.
501(C)(3) organizations are allowed to engage in lobbying activities to influence legislation. Nonprofit organizations can leverage grassroots lobbying or direct lobbying.
Grassroots lobbying is an approach that separates itself from direct lobbying through the act of asking the general public to contact legislators and government officials concerning the issue at hand, as opposed to conveying the message to the legislators directly. However, nonprofits must be cautious in the amount of resources used toward lobbying. A nonprofit risks losing exemption if it engages in too much lobbying. Under the substantial part test, an organization that conducts excessive lobbying in any taxable year may lose its tax-exempt status, resulting in all of its income being subject to tax. With the Expenditure Test, the nonprofit will not jeopardize its tax-exempt status as long as it stays within the stated thresholds. This election is recommended if the organization plans on doing a significant amount of lobbying. The limits are based upon the size of the organization and may not exceed $1 million.
In reviewing the Form 990 for The International Rescue Committee and ActionAid USA, they both have a very insignificant amount of lobbying. Based on the thresholds, they have room to use additional unrestricted dollars to lobby on behalf of the constituents they serve. If a nonprofit does not want to lobby directly, they are able to grant funds to other nonprofit organizations whose mission is to lobby.
While nonprofits may be impacted by the new executive order, there are still ways to help those that they serve. We may soon see a shift to lobbying as an additional way to assist refugees.