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Navigating Tax Reform: Advocacy for Associations and Nonprofits · Associations NOW Presents

0:04
Steven Stout: Welcome everyone to Associations NOW Presents, an
0:06
original podcast produced by the American Society of Association
0:10
Executives. Today, sitting in front of the mic is myself,
0:12
Steven Stout with the Texas Society of Association
0:15
Executives, alongside my colleague and friend Katy
0:18
Markert, who will be serving as your guest co-hosts for today's
0:20
episode.
0:22
Katy Markert: Hi everyone. I'm Katy Markert, also with TSAE,
0:26
and we are so thrilled to be here with you today. Usually,
0:29
Steven and I are on our own podcast, as he mentioned, Better
0:32
by Association, produced by TSAE. And on our podcast, we
0:37
refer to our listeners as "100-Percenters," because, as
0:41
you probably know, association executives give 100% of
0:44
themselves all the time. So you might hear us refer to that
0:47
today. And I want everyone to know.
0:49
Steven Stout: Absolutely. So all those listeners hearing us for
0:52
the first time, welcome to the 100- Percenter family. And for
0:55
those who found us here from our other podcast, welcome back.
0:58
Katy Markert: Welcome back. Normally, I know we're used to
1:01
speaking to what we think is just Texans, but I'm really
1:04
excited that this is a national stage Steven.
1:07
Steven Stout: Agreed. We sometimes have listeners in
1:09
Australia, China and the Netherlands. So being here makes
1:12
total sense. Were you nervous about being here today Katy?
1:16
Katy Markert: What's funny is I wasn't until I heard that we
1:18
were going to be on camera, and then all of a sudden, I got a
1:21
little bit nervous, but usually we don't do that, but I don't
1:24
mind. I'm just pretending that's not happening. And I don't know.
1:27
I think after this, we've completed two seasons of our
1:31
podcast, and I think I started off a little more nervous, but
1:34
the more we've done in it, the more I realized we just have
1:36
really great conversations, and I always learn something. And
1:41
it's really lowered that kind of nervousness level for me. I
1:44
really don't think about it too much, but what about you? I
1:47
don't know. I'm starting. I'm getting the vibe that maybe
1:49
you're you feel opposite.
1:51
Steven Stout: Yeah, I was a little nervous. No, to be honest
1:53
with you, I changed my shirt three times. I did the teenager
1:56
thing in the closet, like I went through things and was like, "I
1:59
have nothing to wear. I hate all my clothes." I was nervous. But
2:02
now we think you said we've done this so much that it it feels
2:05
like home when we get to do stuff like this. But the point
2:07
of all this is that we are happy to be with you today, and thanks
2:10
for having us.
2:11
Katy Markert: Yes, absolutely. Now, Steven, we are recording
2:14
this the second week of December, right before the
2:17
holidays in 2024 and we all just came out of Thanksgiving with
2:20
our families and loved ones. Yes, and typically, at
2:25
Thanksgiving, I just, I love my family. I just want to say that
2:28
about how to say there is that one question that I get a little
2:34
nervous is going to come up. Do you know the question I'm
2:36
talking about?
2:37
Steven Stout: Why can't you be more like your sister, Sharon?
2:41
Is that the one?
2:43
Katy Markert: It probably should be. But no, the question I'm
2:45
thinking of has a lot more to do with politics, as we know should
2:49
never bring that up in the holidays, and in particular this
2:51
year, I was worried about the who did you vote for question?
2:55
Steven Stout: Oh yeah, that is a sticky one at family gatherings.
2:58
Katy Markert: It can be now, perhaps we can sidestep that
3:01
question here, but there are some more important issues tied
3:04
to politics that we should all be keeping a close eye on in the
3:07
association space, no matter who you voted for.
3:10
Steven Stout: That's right. And today we are diving into one of
3:12
those topics, and that is tax reform.
3:15
Katy Markert: That's right. And luckily, we get to ask the
3:17
questions and not answer them, because this is actually going
3:20
to be complex in 2025 today, we are speaking with Mary Kate
3:24
Cunningham, CAE, Chief Public and Governance Officer with
3:28
ASAE.
3:29
Steven Stout: Alongside my colleague and bestie from Ohio,
3:31
Jared Clabaugh, CAE, president and CEO with the Ohio Society of
3:36
Association Professionals. Welcome guys.
3:40
Mary Kate Cunningham: Thanks for having us.
3:41
Steven Stout: Yeah, thanks for joining us today as we guest co
3:43
host this podcast. Now, on our podcast, we always ask the same
3:47
question to our guests, and we're taking the opportunity the
3:49
same here. So our first question, it's an easy one, I
3:52
promise. What is your fall-in story? How did you fall into the
3:55
industry? As we all know, a lot of us did not go to school for
3:59
this. We found this industry and fell in love with it and stayed
4:02
so we'd love to hear your fallen stories and how you came across
4:06
our space.
4:07
Mary Kate Cunningham: I can share that I worked on the Hill,
4:09
and then I was at a think tank and struggling with kind of the
4:11
lack of action sometimes that you have at think tanks. And my
4:15
roommate from college, Beth Palmisano, worked in marketing
4:17
at ASAE, and that is how I found ASAE, 12 and a half years ago.
4:22
Steven Stout: Oh my gosh, wow. So you have your college
4:25
roommate to thank for all this.
4:26
Mary Kate Cunningham: Absolutely, yes.
4:27
Steven Stout: I'm not sure I've ever thanked my college roommate
4:29
for anything. So that's nice that your college roommate did
4:31
something nice for you. And Jared, what about you?
4:34
Jarrod Clabaugh: A buddy of mine actually worked for a newspaper
4:36
here in Columbus, and he heard about a job offering with the
4:39
Ohio Restaurant Association. They were looking for a
4:42
communications director. In my life, I've only eaten in
4:45
restaurants, never worked in one. So I thought, "What could I
4:49
bring to that role? "And another college friend said to me, it's
4:52
basically a PR job for an association, and that was almost
4:56
15 years ago, and that led to service on the Ohio Society of
5:01
Association Professionals board, which led to me running the show
5:05
here nine years later.
5:07
Steven Stout: So you both have your college roommates to thank
5:09
for your introduction to the space.
5:11
Jarrod Clabaugh: Mine is a fellow RA and I'm not sure if he
5:14
made the offer to help me out or to just give me a different
5:17
perspective on going from real estate to something as sexy and
5:20
as exciting as association management.
5:24
Katy Markert: That's wonderful. We love that you guys made it
5:26
into this industry, and we get to talk to you today. Now that
5:29
we've got the softball question out of the way, it's time to get
5:32
into what we're here to talk about. I just want to dive right
5:34
in. So how will the expiration of the 2017 Jobs Act provision
5:40
impact associations, particularly concerning UBIT
5:44
compliance and potential new tax liabilities.
5:48
Steven Stout: A real soft want to get us started.
5:50
Jarrod Clabaugh: Yeah, speaking of those sexy questions, yeah.
5:55
Katy Markert: Mary Kate, can you kick us off?
5:57
Mary Kate Cunningham: Sure, yeah. So I'm happy to talk about
5:59
how much is at stake next year and why associations need to be
6:03
at the table. There are a few bills that have major provisions
6:07
that are expiring and well, the tax cuts and Jobs Act is one of
6:11
them. There is, let's see, almost 10 trillion in proposed
6:15
policies on the table, but there are a huge number of tax
6:19
exemptions that are expiring at the end of next year. So that's
6:22
why Congress has to act. We say Congress only acts when there's
6:25
a deadline, and sometimes not even when there's a deadline,
6:28
and this is going to be next year, the Super Bowl of tax
6:31
there is the individual rates and the corporate rates that may
6:35
change. And Congress is looking for a lot of revenue, and
6:38
they're looking in every sector and profession, and that's why
6:41
we're really concerned about the assistance community and not
6:45
being a pay for this type of legislation.
6:47
Steven Stout: And then why did they suddenly start focusing on
6:51
associations, or the 501, C community? I should say
6:54
Mary Kate Cunningham: So, there was two tax policy reports that
6:57
came out in the summer, one from the Tax Foundation and one from
7:01
Cato, and they are listing out all the different ways that
7:05
associations are exempt, and they're advocating for taxing
7:08
the entire 501, C community at the corporate rate. So it is
7:14
really concerning. One is Tax Foundation, and one is from
7:16
Cato, and we knew we were going to be prepared for a tax site
7:20
next year, along with everyone else, but we didn't know that we
7:24
were going to be specifically targeted to really have all non
7:28
donation revenue be taxed at the corporate rate, which is right
7:31
now, 21% that could change. So it's probably the biggest threat
7:35
to associations in 30 years.
7:37
Jarrod Clabaugh: There's also a threat, possibly, to what it
7:40
could look like in regard to endowments, some of the
7:43
lawmakers have mentioned that endowment should be taxed at the
7:46
35% rate as well, and that would obviously impact a lot of
7:49
nonprofit organizations.
7:51
Mary Kate Cunningham: Absolutely
7:53
Steven Stout: Jared you as a state group, you see this as a
7:56
concern for you as well, obviously.
7:58
Jarrod Clabaugh: We do, and we're trying to educate members
8:01
about the fact that, as of right now, everyone is on the table.
8:04
So a lot of associations have heard about this, but they've
8:07
heard specifically that right now, it looks like Cato and the
8:11
Tax Foundation are interested most at looking at 501 C threes.
8:15
And from what Mary Kate and our colleagues on the Hill have been
8:19
able to gather and share with us, if you have a 501, C
8:22
designation of any type, there definitely needs to be some
8:25
concern, and the fact that everything but donations are
8:29
being looked at for taxation is a real threat.
8:33
Steven Stout: Yeah, that could change the life of a lot of
8:35
groups, not or even maybe make groups some stop existing.
8:40
Jarrod Clabaugh: I agree with you, and I also think we're
8:41
gonna see a lot more mergers and acquisitions. We saw a lot of
8:44
that during the days after COVID and during the first couple
8:48
years of the pandemic, but I think that something like this
8:51
will pose a significant threat to a lot of our a lot of our
8:54
entities.
8:55
Steven Stout: Mary Kate, you mentioned think tanks, and I
8:57
know think tanks like the Tax Foundation have proposed
9:00
significant changes to ubit, including eliminating nonprofit
9:03
exemptions for some activities, including new revenue sources
9:06
subject to taxation, such as royalties and credentialing. How
9:09
should associations prepare to counter these types of
9:12
narratives?
9:13
Mary Kate Cunningham: Great question, and yeah, it's really
9:15
wild. We were preparing just to stop the expansion of ubit
9:19
unrelated income tax. In the past, in tax reform, we've had
9:23
to defeat provisions to tax, royalties, sponsorships, things
9:26
like that. But this is really much bigger and across the
9:29
board, taxing associations. So the question how can we go about
9:34
defending against it? ASAE is launching a coalition of all 501
9:38
C organizations to speak for one song she and advocate to
9:43
Congress why associations and nonprofits are exempt. Congress
9:47
seems to understand they're expected to know every policy
9:50
issue under the sun, and so they seem to understand for profit
9:53
versus charity, but they don't really understand the
9:56
associations, the other 501, C organizations. Why we're tax
10:00
exempt, that we don't enrich our shareholders. We put that money
10:04
back into the community, and we train the workforce, drive the
10:07
economy, things like that. So we really have to be at the table
10:11
to tell our story. There's going to be a ton of new faces next
10:14
year, and there's a lot of work to do, as they say in
10:18
Washington, if you're not at the table, you're on the menu, and
10:20
that's why it's really important for associations to be part of
10:24
the conversation.
10:25
Jarrod Clabaugh: Just to piggyback off what Mary Kate
10:27
said, it's also important to remember that nonprofits provide
10:30
the most education of any group in the post secondary sector.
10:34
We're providing services to the industry, to the world, the
10:37
communities in which we operate that are often services that the
10:41
government would have to subsidize if they're going to go
10:43
away from allowing us to have access to the minimal tax exempt
10:47
dollars we do have to enrich our communities. It's likely that
10:51
government is going to have to get more involved and spend more
10:53
money, which they claim is never what they want to do.
10:57
Steven Stout: Jared, how do you combat folks who aren't in the
10:59
DC area that are like "This is a DC issue. It doesn't matter.
11:03
We're in the state and we're fine. They'll sort it out up
11:06
there, and we'll just keep our heads down here and just keep
11:08
moving forward."What would you say to someone who said
11:09
something like that to you?.
11:11
Jarrod Clabaugh: I think I just tell them to look back at the
11:12
last 10 years. If they look at how legislation in DC has
11:15
impacted state organizations, regional and national
11:18
organizations, it's very rare that something can happen
11:21
anywhere in our 50 states that doesn't end up impacting us. And
11:25
I also remind people about the old adage of as Ohio goes, so
11:29
goes the rest of the country. I think many Ohioans we're lucky
11:33
that we're headquartered here in the capital of Ohio, but you're
11:36
right, Steven, there are organizations that are outliers,
11:39
or that maybe have been their own islands for many years, and
11:42
think it's not going to impact them. I just remind them of
11:45
different changes in legislation that have impacted them, and the
11:49
fact that they're the boots on the ground while DC is off
11:52
making decisions that many of us don't agree with. If we put our
11:55
hands in our pockets and don't say anything, we're allowing
11:58
that change to happen. Yeah, we're trying to work with ASAE
12:02
to make sure we can develop messages that allow our members
12:05
to have a true grassroots focus, that they can elevate their
12:09
message and get it in front of their lawmakers. The reality is,
12:12
a lot of them know their lawmakers better than any of our
12:15
state organizations or even the federal because they're right
12:18
down the street because their constituents, which is a word I
12:21
always want to remind our lawmakers of their constituents
12:25
are involved with associations. One in five Americans is either
12:28
employed by or part of an association during the span of
12:32
their career. And if we remind people of that, I think it's a
12:36
very strong message that we have a lot of force behind us. And as
12:40
Mary Kate said, the economic drivers are essential to many
12:43
communities. What might be a huge windfall for the federal
12:47
government might shut down an organization that feeds the
12:50
homeless, that that helps children have access to clothing
12:54
that educates veterans. So that's a key aspect. I also
12:59
think it's important to remember that most associations are two
13:02
to five employees. They have smaller budgets than most for
13:05
profit companies, and that makes them small businesses. And one
13:10
thing that so many lawmakers campaign on is the idea that
13:14
small business is the heart of America. So if they want to
13:17
change the way that nonprofits operate, they're going to
13:20
directly impact the success of small business.
13:23
Steven Stout: Yeah, I love that analogy. "Save the heart of
13:25
America!" That's your campaign slogan, Mary Kate. you're
13:28
welcome.
13:29
Mary Kate Cunningham: We'll get the buttons for our flying I do
13:32
want to, since we mentioned the fly in, talk about ASAE's fly in
13:36
is open for registration. Our dates are March 25 and 26th and
13:41
you come to DC, we teach you about policy and asaes advocacy
13:45
issues, including tax reform. And then you go to the Hill the
13:48
next day in small groups with your states. Jared has been a
13:51
state leader for many years, and it's really important, because
13:55
every year there are new congressional staff and members
13:57
of Congress, and when they meet someone face to face and learn
14:00
about what associations do in their community, then it really
14:03
changes hearts and minds. So that's what we're looking to do,
14:06
and it's going to be really perfect timing for this fly in.
14:09
It's going to be a period of tense legislation next March, so
14:12
we're really excited to bring people to DC for that
14:15
conference.
14:17
Steven Stout: So thoughts some support, Mary Kate say the dates
14:19
one more time.
14:20
Mary Kate Cunningham: March 25 and 26th ASAE fly in, we're
14:24
going to be in DC, and we're really excited about it, and we
14:26
will certainly have buttons to wear to go to the Hill and make
14:29
our message known.
14:30
Steven Stout: Love it.
14:31
Katy Markert: No that's really great, and that's that kind of
14:33
leads me to my next question. As we're talking about this 10
14:36
trillion in tax policies, my question is, how can
14:40
associations advocate for the value that they provide that
14:43
you've been talking about so they're not disproportionately
14:46
Mary Kate Cunningham: I think there's many different ways
14:46
taxed?
14:48
joining our coalition, the Community Impact Coalition,
14:52
where also we have a tax reform action list that you can join
14:55
for ASAE, so you can get the latest on our issues. If you're
14:58
not able to join the coalition. We will have ways to be involved
15:02
the good and the bad part of the this tax threat is coming from
15:07
think tanks. It's not currently bill text. We never want it to
15:10
be bill text. We're trying to stop it in its tracks. Make this
15:13
radioactive, but it means there's a lack of specifics
15:16
about what it would actually cover, and we've just got to
15:19
defend against everything, as Jared said, especially trade
15:23
show income, investment income, things like that, are really
15:25
concerning for associations. There are different ways to be
15:28
involved that will share, join the coalition, joining ASAE's
15:32
grassroots network, are two big ones,
15:35
Katy Markert: And how do they do that? How can they join the
15:37
Coalition? And how can they join the grassroot network?
15:40
Mary Kate Cunningham: We will share the links to join that
15:42
will be in this podcast description. How does that
15:44
sound?
15:45
Steven Stout: So convenient? We'll put it right in front of
15:46
you.
15:47
Jarrod Clabaugh: I would say one thing that Mary Kate and I have
15:49
been messaging this a lot, but the stories on the ground are
15:52
going to be what matters. What does the 21% tax look like on an
15:57
organization that, again, feeds those in need. They're saying
16:01
that there's 3.6 trillion I believe that they can get from
16:04
our sector in the first year, what's that going to look like
16:08
the second year, when half of our sector is gone? Yeah, and
16:12
the people who know me on this podcast know I like to develop a
16:14
one liner or two, but I can passionately say that I'm tired
16:18
of nonprofits continuing to fix for profit problems, and we're
16:25
really relied upon in our communities to ensure that those
16:29
in need get help. And we're being asked again to not only
16:32
continue to finance maybe some wasteful spending, but we're
16:37
also being told that the work we're doing isn't enough, and so
16:42
I think that it's getting that message out from those
16:44
communities that are local. I'm a part of my local Kiwanis, this
16:48
would vastly impact the work we do to feed our community's
16:51
children and to offer scholarships that are truly the
16:54
definitive difference between someone going to be college or
16:57
university or not. So I think Katie to expound about what Mary
17:02
Kate said. It's just merely reminding people that this isn't
17:06
a segment, or that they're just looking at the quote, unquote
17:09
wealthy associations. This will impact all of us, and that will
17:13
ultimately impact every community in our country.
17:16
Mary Kate Cunningham: Jared, you're so right.
17:17
Jarrod Clabaugh: Can you repeat that? Yeah, exactly. That on
17:20
recording one more time. I never hear that enough.
17:23
Mary Kate Cunningham: How can we get our bullet points ready for
17:25
here's the one top line message to the hill. And what would your
17:28
association have to stop doing if you're paying a 21% tax on
17:31
your net so we had a dental association say, here are the
17:35
Mission of Mercy clinics we would not be able to put on for
17:37
veterans, things like that. If you can get that ready so that
17:41
when we call upon you to tell your story, you have it that is
17:44
going to be the most impactful for sharing the real world
17:47
impact with Congress.
17:49
Steven Stout: Yeah.
17:50
Unknown: A lot of this is just education. Yeah, I've spoken to
17:52
a lot of groups now that don't even know about this, or they
17:55
say it's somebody else's problem. They'll fix that for
17:58
me. And we've all seen where not taking action has ended up
18:02
hurting our communities in the long run.
18:05
Katy Markert: I love both of y'all talking about just like
18:07
the stories that each association has, because
18:10
truthfully, I wholeheartedly believe in storytelling, and
18:13
that's how people remember us and how we can really impact
18:15
people and connect through their emotions and the stories that we
18:19
tell. So just hearing you talk about those specifics and how it
18:23
will impact the communities, I think, is such a huge impact.
18:27
Jarrod Clabaugh: Yeah, now is not a time to be humble.
18:30
Mary Kate Cunningham: Yeah, absolutely. And I think
18:33
ASAE--the AC board--sees what a big threat this is, and they've
18:37
invested up to a million dollars in from our reserves in this
18:40
effort, and now we've raised over $300,000 for the coalition
18:44
itself. So there's a lot of energy and enthusiasm, and we
18:47
know there are smaller organizations that will be able
18:50
to find it in their budget, but there's other ways they can
18:52
definitely help. So definitely be thinking about what's your
18:56
one liner? What would happen in your community if your
18:59
associations didn't exist.
19:01
Jarrod Clabaugh: Mary Kate, how many organizations are involved
19:03
with the tax coalition reform group right now?
19:06
Mary Kate Cunningham: We are at over 40 now.
19:08
Steven Stout: That's great.
19:09
Mary Kate Cunningham: Yeah, we're in our soft launch phase,
19:11
but it's just really growing quickly, and we are excited to
19:15
tell the story. There's going to be such a competitive
19:18
environment, and because of all the legislation that'll happen
19:20
next year. That's why we really need the support to be able to
19:24
break through the noise
19:26
Jarrod Clabaugh: And correct me if I'm wrong, but hasn't the new
19:29
administration said they want to put together some type of tax
19:32
plan within the first 100 days?
19:34
Mary Kate Cunningham: Yes, there's so much pressure to move
19:36
quickly on this, both from the administration, the kind of
19:40
pressure to continue their the legacy of the tax cuts and Jobs
19:44
Act, and then in Congress, they know there's the first 100 days
19:48
are where the most action happens. They have the most
19:50
momentum. There's some debate about, if they're between the
19:53
House and Senate, of course, on what the actual strategy will
19:56
be. The House wants to go first with tax reform. I think the
19:59
Senate's more interested in some other policy first, but it will
20:02
be regardless, intense policy making period, and we really
20:06
need to be at the table there.
20:08
Jarrod Clabaugh: That times the fly in at a great point in this
20:10
discussion.
20:11
Steven Stout: I was going to say that sounds like the first part
20:13
of the year is going to be very important for this fight that we
20:15
ahead of us.
20:16
Jarrod Clabaugh: And as all things political, there's a good
20:19
chance that this will not have a stamp on it by the end of 2025
20:23
that does not reduce the concern, but we have those
20:26
wonderful midterm elections that will start, I think, on day 101
20:30
of the next administration. So I think it's important that we
20:33
realize that this may be a battle that no from both the
20:37
federal level and state and regional that we have to keep
20:40
our eye on in the long term? Yeah, I've also been trying to
20:43
remind groups that are mainly state based that whenever the
20:46
federal government finds money somewhere, it isn't long before
20:49
state and local start looking at that as well. If this doesn't
20:52
get defeated at the federal level, we need to realize that
20:55
the states will likely start coming for revenue as well.
20:58
Steven Stout: Yeah, that's a great point. Jared, I think
21:00
people forget about that piece of it. And I like that you
21:02
pointed out that this fight may not have an expiration date. It
21:05
might be a while, a long fight, which makes sense. Mary Kate,
21:09
why the ASAE executive board put so much faith in you and
21:12
money behind the fight.
21:14
Mary Kate Cunningham: Yes, having something like a laundry
21:16
list in the Tax Foundation report of all the different ways
21:19
to tax organizations is really concerning because it just
21:23
exists for tax policy staffers to go back and look at so it's
21:27
very concerning.
21:28
Steven Stout: Yeah, many new members of Congress, we talked a
21:30
little bit about that. There's a lot of those now lack historical
21:33
context on the tax cuts and Jobs Act. You talked a little about
21:36
the fly-in Mary Kate, but how can associations educate policy
21:39
makers to protect the sector's interests?
21:43
Mary Kate Cunningham: Absolutely, yes, there are going to be a lot
21:46
of new faces, and we're going to have sign on letters where we'll
21:49
ask your association to join. And the way we divide the sign
21:52
on letter when it goes to the hill is by state elected
21:55
official can pull it open and see, I'm from Arkansas. Here are
21:58
all the Arkansas associations. So really, every voice counts
22:01
there. I think that will be really important, and it will be
22:06
certainly a tough road for because the margin is so thin in
22:11
the house, and some of those elected officials are going to
22:13
join the administration. They're going to have elections to
22:15
replace them. It's going to be, I think, a really interesting
22:19
but tough path ahead to get this legislation through the house,
22:22
in a situation where almost every member of Congress has a
22:24
veto, in a sense, in the house, because there's such a just a
22:28
few vote majority, then I think it's really means that every
22:33
voice is important to be educated on this issue. Yes,
22:36
it'll definitely be an interesting time the new
22:40
Congress, yeah.
22:41
Jarrod Clabaugh: And I know one thing Mary Kate and I have
22:43
talked about is, you know, maybe there's a lawmaker or a
22:46
legislator that's within our own organizations, or maybe we have
22:50
a connection to those folks. Let's find those voices. Let's
22:53
elevate those voices in a way that helps others realize that
22:57
the impact of our industries and the work that we do, because
23:00
let's face it, it comes down to friendship, no matter where you
23:03
are in your career and in your role. Yeah. So if you fellow
23:06
lawmakers in DC who maybe are in your caucus that can share the
23:11
value of association management and the great work that
23:14
nonprofits do, they're automatically going to trust
23:17
their voices more. So that's something that I've been trying
23:20
to work with my membership to do is finding those wonderful
23:23
voices and finding those strong advocates, because we need as
23:27
many people to talk about the great work that we're doing as
23:29
possible.
23:30
Mary Kate Cunningham: That's so true. And if you have a
23:32
connection to a member of Congress, we are mapping that.
23:35
So if you can email publicpolicy@ASAEcenter.org and
23:39
we're working on the map of all the members of Congress who's
23:43
received awards from associations, who's a member of
23:45
an association, exactly what Jarrod said there. If you have a
23:48
connection like that, you're a trusted voice within them, and
23:51
that's super helpful. And we have one member of Congress who
23:55
is on the Ways and Means Committee, who is an ASAE member
23:58
might carry, and it's just so great to have someone who
24:01
understands association management. He said association
24:03
management is similar to being in Congress. It's like juggling
24:06
jello or we can have those connections. I think the better.
24:10
So it's public policy at ASAE center.org and send us who
24:14
you're connected to. We just had a member over the weekend tell
24:18
us that they're connected with Billy long who's going to be
24:21
nominated to run the IRS. So things like that can always be
24:24
super helpful to us.
24:25
Steven Stout: Yeah. So you pointed out you get your talking
24:27
point ready of what your priority is, and then if you
24:30
have a connection, make sure you inform you guys you have that as
24:34
in your arsenal as you take on this fight.
24:36
Mary Kate Cunningham: Absolutely. And we're looking for also,
24:39
we're looking at charities to join the coalition, and we're
24:41
looking at the charities that are both connected to members of
24:44
Congress and to the incoming administration. All the
24:47
different ways to be connected are great.
24:49
Jarrod Clabaugh: Yeah, and I would just indicate that the
24:51
leadership at ASAE has been very engaged with the state leaders.
24:55
They are working very closely to support the work that the SAEs
24:59
do. And they want to make sure that we have a place at the
25:02
table. And ultimately, I think that's something we need to
25:05
remember, that we can't let this be a deep sea issue. This has to
25:08
be something states are delivering. I've had some
25:11
members tell me that we're not worried about this, and what I
25:13
tell them is, I'd rather blow out a candle than try to put
25:16
down a forest fire. So at this point, we know it's out there.
25:20
We don't know what's going to be in a bill, or if there will even
25:22
be a bill, but it's better to be educated about it than to be
25:26
surprised.
25:27
Mary Kate Cunningham: Absolutely, it's so much harder to defeat
25:29
something when there's already bill text so absolutely Jarrod.
25:32
Jarrod Clabaugh: And Mary, Kate and I were both saying many
25:34
prayers that it would not be a trifecta. We knew that if one
25:38
party won a segment of the government we had a better
25:42
chance at this, but the way things came out up until just
25:45
last week, they were still calling races. But the way this
25:48
came out is Congress is controlled in both houses by the
25:51
Republicans, and obviously the administration is Republican, so
25:54
we need to be on top of this.
25:56
Mary Kate Cunningham: Yeah, it just adds to the sense of
25:57
urgency when one party is able to move forward because they can
26:01
use reconciliation, which is the process to get something through
26:04
the Senate, without having to get the 60-vote majority. So
26:08
they'll be able to use that. There are some quirks within it,
26:11
but they'll be able to use that to pass tax before Democrats use
26:14
it to pass the Affordable Care Act. Republicans use it to pass
26:17
the tax cuts and Jobs Act in 2017 so it reduces the hurdles
26:21
that they have to get to. It's still immensely complicated to
26:23
find that many votes. And if you might remember, the Republicans
26:27
lost 22 votes on the budget resolution to start
26:30
reconciliation for tax reform last time, and they lost 12
26:34
votes on the actual tax reform. So it'll be a tough road to make
26:37
everyone happy in order, they don't have 12 votes to lose this
26:40
time, unless they find enough Democrats. So it will be really
26:43
interesting to see how that all unfolds.
26:46
Jarrod Clabaugh: And just as a reminder, this would have been a
26:48
threat no matter which party won, I've been encouraging all
26:53
of my members to dust off their copies of the West Wing and
26:57
remind themselves how we can all be a voice and all be a part of
26:59
this fight
27:00
Steven Stout: Practice, walking and talking and like the doing
27:03
the West Wing.
27:04
Jarrod Clabaugh: Correct, Aaron Sorkin is yet to financially
27:07
support any of my commitment to the West Wing, but I would say
27:11
that it's a good reminder that we have a voice and we can get
27:14
involved. And Mary Kate and her team are doing so many positive
27:19
things for the industry in DC, but this is just a reminder of
27:22
how we can all come together. One message I've been really
27:25
thankful that I can deliver to my members is, no matter what
27:29
your role in the association spectrum is, if you're a CVB, if
27:34
you're a hotelier, if you're a financial services firm, this
27:37
will impact the work associations and nonprofits are
27:41
doing in your communities, and it will impact what you're
27:43
doing. And as a has been phenomenal at bringing together
27:47
the many various stakeholders in this to make sure we're all a
27:51
part of the conversation and to make sure that the messaging
27:54
that's being delivered to our lawmakers and to our members is
27:58
not beltway heavy. It's how people talk where they are, it's
28:02
understandable, it's applicable. And that's, I think, why these
28:06
grassroots messages are going to be so important to winning this
28:08
fight.
28:09
Katy Markert: Yeah, I love hearing the breakdown the house
28:12
and how close it's going to be. And you mentioned that there's
28:15
not bills written, there's not current language yet, but are
28:19
there some specific legislative items that associations should
28:23
be keeping an eye on.
28:24
Mary Kate Cunningham: Outside of tax reform, I have to take the
28:27
time to talk about our we've got really exciting legislation that
28:31
is positive, that might pass a tax reform next year. So the
28:34
freedom to invest in tomorrow's workforce Act is the
28:36
legislation, and it would open up 529 savings accounts that
28:41
are tax favored to be able to be used for certification and
28:45
licensure. So we have 149 co-sponsors in the house and 25
28:49
in the Senate. It's one of the most bipartisan bills in
28:51
Congress, and it was actually passed through the Ways and
28:54
Means Committee in July. So our plan is to reintroduce in
28:58
January and do our best to make sure this legislation is
29:01
included in tax reform, it has a really low score, about 85
29:05
million over 10 years from the joint tax that means it's more
29:09
of a possibility to be included, and it's really an offensive
29:12
measure as well, because every office that we meet with, we
29:15
explain all the certifications that associations provide, how
29:19
we train the workforce. We frankly, lean on a lot of the
29:21
blue collar certifications, because every legislator wants a
29:24
stronger workforce, and the people that can transition to a
29:27
great career really thrilled about the work. We have a
29:30
coalition, the tomorrow's workforce coalition, to try to
29:32
help get this passed, with over 900 organizations that have
29:36
joined on that is a free coalition next year, because
29:39
it's a Super Bowl of tax we're doing everything possible to try
29:42
to get that included in the tax bill. That's one positive. And
29:46
then
29:46
Jarrod Clabaugh: I just want to interrupt here real quick and
29:48
say that part of that 529, the success forward, has been ASAE
29:53
working with lawmakers and their members to get that message
29:56
across. I think we've at least two years, maybe three. We've
30:00
been in DC during the fly-in talking about the importance of
30:03
this piece of legislation and how it would expand
30:06
accreditations to various parts of our communities. As Mary Kate
30:10
said, this helps every level of your society. So it's not geared
30:15
at just as of right now, 529s can only be used for colleges
30:19
and universities, and there are a lot of younger people in
30:22
today's workforce that they don't want to go that route. So
30:25
what better way than expanding those offerings without a huge
30:28
hit to their investment? And the success of this is related to as
30:33
a ease work through the fly in and obviously their ongoing
30:36
campaign.
30:37
Katy Markert: Yeah ,that's great.
30:39
Mary Kate Cunningham: Oh yes. And obviously, Ohio, your
30:41
society, has been really helpful as well. Jared and yeah, the fly
30:45
in every year that helps us get co-sponsors. It's just that type
30:48
of shoe leather lobbying is really useful for sharing the
30:52
message on the hill.
30:54
Jarrod Clabaugh: It's easy to ask a lawmaker, do you not want
30:56
to help more of your constituents work and make
30:59
better careers and spend more money and stay in your
31:01
communities.
31:02
Mary Kate Cunningham: Absolutely, it's such a bipartisan piece of
31:04
legislation, it's really exciting to work on.
31:07
Steven Stout: Yeah, so that's a win. Mary Kate, any other wins
31:10
we should know about?
31:11
Mary Kate Cunningham: I think that something to put on the
31:13
radar that I've had a lot of members ask me about is there is
31:17
more, I think, of a concern about telling our story,
31:21
especially in the house, Ways and Means Committee, I think
31:25
there's a little more skepticism about associations and a need to
31:31
do that education. And I just want to highlight a bill that
31:34
passed the stop terror financing and tax penalties on American
31:38
hostages act that sounds like something we can all be in favor
31:41
of stopping to American hostages paying taxes. But within that
31:45
legislation, it's HR, 9495 a lot of members have asked about it,
31:49
because it would allow the Treasury Department to revoke
31:53
the tax exempt status of a nonprofit deems to be supporting
31:56
terrorism. Our concern is that any kind of unilateral power
32:01
that it's giving to remove tax exempt status. So it's something
32:04
just to be aware of, and it's a reminder of how we need to show
32:09
Congress how associations are the incredibly strong governance
32:13
that we have. I think we are not the target of this legislation,
32:16
but just something to consider as Congress looks to provide
32:19
more oversight on tax exempt organizations. There's really a
32:23
strong need to explain who associations are, how we benefit
32:27
the society. And I'm really thrilled we have new economic
32:30
impact research that Oxford Economics did for ASAE, and we
32:35
have a map on our power of associations website that we'll
32:37
share the link to, where you can look at every state and see the
32:40
number of associations, the number of employees employed by
32:43
associations, the taxes that we pay for State and Local and
32:48
that's really helpful for quantifying the power of
32:50
associations to Congress, and something that we'll continue to
32:53
do next year.
32:54
Steven Stout: Yeah, that's so powerful, too here in Texas,
32:57
that helps those types of data points really help us here to
33:00
make the case here in Texas for our existence. So thank you for
33:04
all the work you do with that piece. It's very important to
33:06
us. I will tell you guys, you got me a little fired up. I'm
33:10
ready to, like, I need, like, a boxing montage with Eye of the
33:13
Tiger, like, I'm ready to knock some stuff out. But before Katy
33:16
gets to her last question, I wanted to ask Mary Kate, if
33:19
people are listening, and they've never been to the fly-in
33:21
before, and they want to get involved. They hear your
33:23
passion. They hear Jarrod's passion. Can you give people a
33:26
sort of little snippet of what a fly ins like if they've never
33:28
done one before? Because I think it sounds like we need everybody
33:31
that can come this year, whether you've been coming for years, or
33:34
this will be your very first time. We need everybody, as you
33:37
said, to help us with that shoe leather, lobbying, lawmaking,
33:40
explain the fly in a few one more time for those folks who
33:42
have never, ever been.
33:43
Mary Kate Cunningham: Absolutely. So it's March 25 and 26th we
33:47
have every type of folks attend, from association lobbyists to
33:50
CEOs to people who are in association management but have
33:54
never gone to the hill before. So we will teach you everything
33:56
you need to know. It comes with a lot of CAE credit hours. We're
34:00
finding out the exact amount now, but we will do a 90 minute
34:04
prep webinar in February to teach you the basics of a hill
34:08
meeting, how to request them, how to join your state groups,
34:11
and the top level on our policy issues, which are going to be
34:14
taxed in our five to nine bill. And then when you come to the
34:18
fly in on the first day, we will have a special first timer
34:21
session that kicks off at 11, and we'll do more practicing
34:24
Hill meetings in small groups. And then we will have speakers
34:28
from the hill and then teach you the policy issues. And then we
34:32
also provide some general government relations kind of
34:35
education, because we know people need to help justify
34:38
their attendance and registration. Sure, this year
34:41
we're gonna have an ethics credit, which is very exciting.
34:44
We get help people with doing CAE renewal, and then we'll do a
34:48
short session on political communications. We're gonna have
34:51
some great experts join us. It's more important than ever to try
34:54
to break through the noise. So excited about that session. So
34:57
we'll give you all the education, and we'll put you.
35:00
Into state groups, and then you will go to the Hill the next
35:02
day, and we will have a lunch on the hill, and then you'll do
35:06
your meetings in individual groups, and we'll give you the
35:09
packets that you bring to the Hill show you how to do it. And
35:13
it's a really great way to learn about advocacy from if you're
35:16
new. And then we have seasoned professionals go and help share
35:19
the message with Congress, and I would say, if you haven't done
35:22
Hill meetings before, don't be intimidated. You're often
35:24
meeting with someone who's 25 they want to hear about your
35:27
industry. So just explaining what your association is and the
35:30
benefit you provide to the society is super helpful. And
35:34
then ASA, staff can always follow up that there are
35:36
specific policy questions in our lobbying team.
35:38
Jarrod Clabaugh: They also provide digital copies of
35:41
everything that you'll share. Last year, I went on one of the
35:43
meetings I was in. I handed them the paper copy, and they looked
35:46
at it paper. So it's nice, because you literally can sit
35:50
right there and say the PDF is in your inbox. So they've got
35:53
that information. It's easily shareable. It's easily
35:56
understood. It is written in layman's terms. They do a great
36:00
job of making, you know, the fly in simple and understandable.
36:04
And like Mary Kate said, there's no reason to be intimidated at
36:07
the end of the day, these people, they want the same
36:09
things we do. So sitting down with them and trying to better
36:13
our society is what all of us are doing. It's just trying to
36:16
bring everyone to that same point. Great, all great stuff.
36:19
Yeah,
36:19
Katy Markert: Thank you all for breaking that down. I really
36:21
it's really helpful to know that you prepare and it's not as
36:25
intimidating as one might be with that. You guys, thank you
36:29
all so much for chatting with us today and sharing this hugely
36:31
important information. We do have one last question. We asked
36:34
the same question as we mentioned at the beginning of
36:36
the podcast to all of the people we interview, and we just want
36:40
to know, why do you think being engaged with organizations like
36:45
ASAE, TSAE, OSAP, why is that so important?
36:52
Mary Kate Cunningham: I would say it's just the sense of
36:53
community and the continual learning that it provides. I
36:56
think that's what makes life worth living. I think that joy
37:00
that it brings you is super important.
37:03
Jarrod Clabaugh: And I would reiterate that. I would also say
37:05
our unofficial tagline here at OSAP is we build relationships,
37:09
and ultimately, that's what this is all about, relationships that
37:13
benefit our communities, no matter what that community might
37:16
be, no matter what role the nonprofit or the association is
37:19
playing. I think that when you don't have that type of
37:22
connection, it leaves you out in the cold and having these types
37:26
of relationships and being able to pick up the phone and say,
37:29
Hey, Steve, and I have a question about it means funny.
37:31
You mentioned that we just dealt with that. We're picking up the
37:34
phone and saying, Mary Kate, what do you think about x? And
37:37
it helps keep those issues on one another's radar, but it also
37:41
allows us to discuss them with people that understand what it
37:43
is we do. Yeah, and everybody on this call works for an
37:48
association. And how many times in your life have you had
37:50
someone say to you, is that really a thing? So it's nice to
37:54
know and to network with people who understand what the thing
37:56
is. So that's what I think the benefit of involvement with
38:00
national and regional associations is
38:03
Katy Markert: thank you guys so much for everything that you do
38:05
and for being with us today.
38:07
Steven Stout: For fighting the good fight, man. I wish the
38:09
flying was like today. Mary Kate, I am ready. Let's go.
38:12
Let's go.
38:13
Mary Kate Cunningham: Absolutely, we appreciate it. Yeah, you in
38:15
the fight and
38:16
Steven Stout: We'll be there. Thanks again to Jarrod and Mary
38:18
Kate for joining us today, and thank you for listening to the
38:20
Associations NOW podcast. We really appreciate everyone
38:22
listening. And again, thank you guys for all that you do for all
38:25
of us across the country, not just in our states, but
38:27
nationally as well. We are all deeply in debt to you. Thank you
38:31
both.
38:32
Jarrod Clabaugh: Thank you.
38:33
Steven Stout: I find it's always best when you have a complex
38:35
problem like tax reform, it's best to just throw a bunch of
38:37
smart people at it to help solve it.
38:39
Katy Markert: Exactly, No kidding. So many of the issues
38:42
with tax reform could really hurt associations, but with
38:45
people like Mary Kate and Jarrod fighting alongside us, I really
38:49
feel like we have a chance to affect a positive turnout.
38:52
Steven Stout: Here, in my head, I have this image of Mary Kate
38:55
on a black horse with half her face painted blue, Braveheart
38:59
style. Yeah, totally Braveheart. And she rides up and down,
39:02
yelling at the association community that we need everyone
39:04
to join to fight to protect association on tax reform. We
39:07
don't get hyped. And he face is blue. We follow her into battle.
39:10
Katy Markert: I love it. So Mary Kate is William Wallace in this
39:12
scenario I see, okay.
39:14
Steven Stout: But yeah, just go with me here. And she ends with
39:17
a rallying cry. Instead of to fight English, it's to protect
39:19
our 501. C status and UBIT.
39:23
Katy Markert: I love it. I'm with you.
39:25
Steven Stout: Thanks 100-Presenters for joining us
39:26
today on the Associations NOW Presents podcast. Be sure to
39:29
listen to this and other episodes of the podcast wherever
39:32
you find your favorite podcast.
39:35
Katy Markert: And we want to thank our guests, both Mary Kate
39:37
Cunningham and Jarrod Clabaugh. Also, thanks to ASAE for letting
39:41
us co-host today's show.
39:42
Steven Stout: Very exciting. And if you want to continue hanging
39:45
out with me and Katy, check out Better by Association, an
39:48
original podcast produced by the Texas Society of Association
39:51
Executives. You can also find us anywhere you listen to your
39:54
favorite podcasts. Thanks for listening, everybody. Bye.