Philanthropic Achievement of the Week

1933- Bringing the Science Museum to America

Chicago Science

One of the favorite places that Chicago philanthropist Julius Rosenwald ever visited with his family was the Deutsches Museum in Munich—which (then as now) was the world’s foremost exhibit of technology and science. The inspired Rosenwald resolved to bring America its first great science museum, replete with a full-size re-created mine, huge machines, and clever interactive exhibits. To bring the project to fruition during the 1920s and ‘30s, he pledged $3 million of his own money (ultimately increased to $5 million).

Even more crucial than Rosenwald’s inspiration and funding was his steely determination and executive resolve—every ounce of which was required to translate his dream into reality in the face of municipal incompetence, cost overruns, staff disputes, neighborhood resistance, engineering disasters, and myriad other roadblocks. Yet Rosenwald fiercely rebuffed every effort to place his name on the museum, reasoning that the people of Chicago would be more likely to feel they “owned” the institution—and thus be willing to expend effort to keep it healthy and fresh over the decades ahead—if the institution was simply identified with the city, not its main patron.

Rosenwald seems to have calculated right, as the Museum of Science and Industry in Chicago has continued to be updated and improved in dramatic ways. Today it remains the largest science museum in the Western Hemisphere, and the second most popular cultural attraction in its home city.
Peter Ascoli, Julius Rosenwald: The Man Who Built Sears, Roebuck and Advanced the Cause of Black Education in the American South (Indiana University Press, 2006)
Museum of Science and Industry, History, msichicago.org/about-the-museum/museum-history

Tax Policy and Private Charitable Giving

Eugene Steuerle Discusses a New Study on How Tax Proposals Could Affect Giving

Eugene Steuerle, who serves as the Richard B. Fisher Chair at the Urban Institute, discusses the most recent study from the Urban Institute and Brookings Institution entitled: Description and Analysis of the Camp Tax Reform Plan. Steuerle explains how the tax policy included in the draft affects the charitable sector and offers his thoughts on provisions that would help strengthen it.

ACR News 07.28.14: House Passes Legislation, Expert Analysis of Camp Draft, Looking Ahead

>> Federal: Washington Roundup
>> Federal: Chairman Ryan Pens Op-Ed
>> Federal: Senate Continues Hearings
>> Federal: Interview with Eugene Steuerle
>> Federal: Outlook Through the End of the Year
>> Consider This: Connecting with Lawmakers in August
>> Top Reads: House strengthens tax breaks for charitable giving


Washington Roundup

The House of Representatives passed H.R. 4719 – the America Gives More Act – on July 17 by a bipartisan vote of 277 -130. The bill makes permanent three charitable tax extenders (the IRA charitable rollover, the enhanced deduction for conservation easements, and the enhanced deduction for food donations). Additionally, H.R. 4719 includes two other provisions that are not tax extenders but have been ACR priorities for several years. First, the bill permanently streamlines the private foundation (PF) excise tax to a flat one percent rate; and second, it gives donors until April 15 to make charitable donations for the previous calendar year. ACR and several of our members were invited to brief the Ways and Means Nonprofit Tax Reform Working Group on the PF excise tax last year. We were told by staff for House Ways and Means Chairman Dave Camp (R-MI) that this briefing was instrumental in including the PF excise tax provision in H.R. 4719. 

Just two weeks ago, ACR’s leadership team of donors and foundation leaders met with 16 House lawmakers and senior staff to encourage them to vote for H.R. 4719. We are pleased so many members voted for the bill and, when the time comes, we look forward to working with our champions in the Senate to pass the bill. 


Chairman Ryan Pens Op-Ed

Prior to a speech at the American Enterprise Institute (AEI) on July 24, House Budget Committee Chairman Paul Ryan (R-WI) wrote an op-ed in USA Today touting a new anti-poverty campaign. During that speech, Ryan called for an expanded earned income tax credit as part of that plan. His credit would provide more benefits for childless workers and could be transformed into a monthly payment. We also note that Chairman Ryan was asked about private charitable giving at this AEI event by Joanne Florino, senior vice president for public policy at The Philanthropy Roundtable.

As you likely know, Chairman Ryan is expected to be the next Chairman of the House Ways and Means Committee after Chairman Camp retires at the end of this year. He was one of the House lawmakers that several members of ACR’s leadership team met in DC earlier this month.

Ryan_ACR Group 2


Senate Continues Hearings

The Senate Finance Committee held the second of its summer hearings on comprehensive tax reform on July 22, focusing on the international section of the tax code and corporate inversions (the practice of US corporations shifting headquarters to low-tax jurisdictions). Senate Finance Committee Chairman Ron Wyden (D-OR) said he plans to work on a short-term solution to help stem the growing frequency of inversions and use the space created by these immediate steps to pursue comprehensive tax reform.

The Finance Committee held a third hearing on July 24 focused on Social Security. During his opening statement, Chairman Wyden said “On a bipartisan basis, Congress must ensure this safety net is not shredded. Let’s all focus on the vital goal, which is updating and protecting this essential program for generations to come.” While the hearing examined several potential long-term solutions to keep the program solvent, Congress is not scheduled to consider any of these in the near future.


Interview with Eugene Steuerle

ACR continues to be the organization providing firsthand access to the most influential policy experts for the nonprofit sector in our nation’s capital. The latest example is our discussion with Eugene Steuerle, who serves as the Richard B. Fisher Chair at the Urban Institute. Steuerle discusses the most recent study from the Urban Institute and Brookings Institution entitled: Description and Analysis of the Camp Tax Reform Plan. Steuerle explains how the tax policy included in the draft affects the charitable sector and offers his thoughts on provisions that would help strengthen it.


Outlook Through the End of the Year

Both the House and the Senate are set to go on a month-long summer recess this Thursday, July 31.  Both chambers will return the week of September 1, but only for a few weeks before adjourning again to campaign before the mid-term elections on November 4.  We expect the Senate Finance Committee to continue hearings on tax reform options but we don’t expect one of those hearings to be directly related to charitable issues. On the House side, the Ways and Means Committee continues to meet with groups about Chairman Camp’s tax reform draft.

Lawmakers will then return to Washington for the lame duck session – the time period remaining on the legislative calendar after an election but before new Members are sworn in as part of a new session. The lame duck is expected to be very busy as Congress will likely punt big-ticket items into the lame duck and avoid risky votes before the election. Such items include a final resolution on tax extenders; legislation to fund the government into next year to avert a shutdown; and a reauthorization of the Export-Import Bank, which provides a variety of loan, guarantee, and insurance products intended to aid the export of American goods and services. 


Consider This—Connecting with Lawmakers in August

Since lawmakers will be back in their home states and districts during the entire month of August, this is a great time to connect with them and discuss the importance of the nonprofit sector! We recommend you take a few minutes to watch the video below of former congressional staffers explaining why it is so important to engage with your elected officials.

To help you prepare for your outreach, our friends at The Philanthropic Collaborative and the Foundation for the Carolinas hosted a webinar on July 15 to review a toolkit for connecting with lawmakers: Tools for Outreach to Policymakers.


Top Reads



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Events

Event - 2014 Rocky Mountain Tax Seminar

RMTS

The 2014 Rocky Mountain Tax Seminar for Private Foundations is scheduled for September 17, 18, and 19, 2014 in Colorado Springs, Colorado at the Penrose House Conference Center. The seminar is designed to update and inform managers, trustees, and founders of private foundations about the ever-changing tax laws that affect private foundations.

The seminar encourages dialogue about practical problems that foundation management face in day-to-day operations. Hotel accommodations will be at the Broadmoor Hotel.

Speakers include Jim Hasson, Bruce Hopkins, Celia Roady, Virginia Gross, and Kyle Hybl.  This year’s special guest speaker will be Steven Miller, former acting IRS Commissioner and current National Director of Tax for alliantgroup, a tax consulting firm, specializing in providing tax services to United States businesses.

For additional details and registration visit
www.rmtaxseminar.org
or contact Nicole Magic at (719) 577-7062

Philanthropic Achievement of the Week

1954 - Kidney Transplants and Dialysis

Kidney Transplants and Dialysis

In 1940, an estimated $45 million was spent on biomedical research in the U.S., only $3 million of it from the Federal government. World War II accelerated government health research, but as late at 1947 the entire budget for the National Institutes of Health was still only $8 million. Thus, the major force in funding biomedical research in the U.S., especially on the cutting edge, was private philanthropy. The most active foundation in this area was the John A. Hartford Foundation.

Brothers John and George Hartford created the behemoth A&P grocery chain, which became the largest retailer in the world. A&P was the first merchant to reach $1 billion in annual sales, which it hit in 1929. That very same year, John established the foundation that bears his name. After the brothers died in the 1950s, their combined contributions of A&P stock made the Hartford Foundation the fourth largest philanthropy in the country. Its trustees met and decided to focus their giving tightly on biomedical research, making the organization the largest supporter of clinical science in the U.S.

Between 1954 and 1979, the Hartford Foundation provided hospitals and medical centers with $175 million of research grants, equipment, and fellowships for scientists, catalyzing many of the era’s important advances in medicine. During its peak spending years of 1962 to 1972, the foundation funded more biomedical research than all other major foundations combined. The products of this investment included kidney dialysis, successful kidney transplantation (and then leaps in other types of organ transplants), major improvements in understanding of immunology, development of the artificial heart, cryogenic surgery, many advances in cancer research, the groundwork for microneurosurgery, and more.
In 1954, Hartford gave Boston’s Brigham Hospital a $300,000 grant which directly supported some of the world’s first successful kidney transplants. These operations created worldwide attention and led to another $200,000 of Hartford support over the next few years. The foundation simultaneously underwrote pioneering work on organ transplantation by other researchers. Crucial investigations in immunology, aiming to avoid rejection of transplanted tissues, were also funded. In addition, the Hartford Foundation underwrote creation of professional organizations like the International Congress of Nephrology, the American Society of Nephrology, and the Transplantation Society.
Making the kidney dialysis machine practical and affordable was another product of concentrated Hartford Foundation funding. The “artificial kidney” that existed in the beginning of the 1950s was huge, expensive, and destructive of patient blood vessels. In 1961, Hartford provided $250,000 to develop more efficient dialysis machines for use in the first outpatient clinic, in Seattle. A second center was subsequently created in Spokane. On January 8, 1962, the world’s first out-of-hospital dialysis center treated its inaugural patient.
Other renal experts in Cleveland and Boston were simultaneously supported with six- and seven-figure grants from Hartford. The result? For the first time, the one-out-of-every-100,000 Americans whose kidneys had failed gained the prospect of escaping their death sentence.

• History of Hartford Foundation biomedical research by Judith Jacobson, The Greatest Good (Chester Jones Foundation, 1984), jhartfound.org/learning-center/wp-content/uploads/2013/04/GG_Intro.pdf

• Philanthropy magazine, May/June 2004 issue, philanthropyroundtable.org/topic/excellence_in_philanthropy/frontiers_of_science

House Passes Legislation Championed by ACR

ACR Priorities Among Five Charity-Related Bills Passed by the House of Representatives

WASHINGTON, D.C.— Two legislative priorities of the Alliance for Charitable Reform (ACR) were included in a package of five charity-related bills—HR 4719, the America Gives More Act—passed today by the House of Representatives. The ACR priorities included in the package will streamline the private foundation (PF) excise tax to a flat one percent rate and give people until April 15 to make charitable contributions applicable to the previous year.

“This legislation is a big win for those who are served by the nonprofit community, which in one form or another, is much of the country,” Joanne Florino, senior vice president for public policy at The Philanthropy Roundtable, said. “In particular, the two provisions championed by ACR will help grow charitable giving and foundation grantmaking.”

The package passed by the House today included HR 4691, a bill co-sponsored by Rep. Erik Paulsen (R-MN) and Rep. Danny Davis (D-IL) that would streamline the PF excise tax to a flat rate of one percent. The current excise tax is a two-rate structure which has the practical effect of penalizing foundations if they increase their grants during times of great need.

“Streamlining the PF excise tax has been a top priority for ACR for several years. Our members were invited to brief the Ways and Means Committee’s Nonprofit Tax Reform Working Group on the PF excise tax issue last year and we are proud to see that our suggested change was passed by the House today,” Sandra Swirski, executive director of ACR, said.

Today’s package also included HR 3134, co-sponsored by Rep. Mike Kelly (R-PA) and Rep. Bill Enyart (D-IL), which would give people until April 15 to make charitable contributions eligible for the charitable deduction, instead of requiring those gifts to be made by the end of the calendar year.

“This bill would also spur charitable giving by allowing the donors to have a complete knowledge of their financial standing for the tax year, specifically for small business owners and entrepreneurs” Swirski said. 

ACR just recently championed these bills during a full day of meetings with members and staff of the House Ways and Means Committee and the Senate Finance Committee on July 8. In addition to the legislation passed today, the group of foundation leaders discussed other charity-related proposals being considered in tax reform legislation and additional issues affecting the nonprofit sector.

The final three measures included in today’s package would make permanent the IRA charitable rollover, enhanced deductions for conservation easements, and enhanced deductions for food inventory. While not specific priorities for the organization, ACR endorses their passage due to the critical support they will provide to the charitable sector. All five bills included in today’s package were passed by the House Ways and Means Committee on May 29.

Philanthropic Achievement of the Week

1876 Appalachian Mountain Club

Charlies Bunion

In 1876, Edward Pickering, Thayer professor of physics at the Massachusetts Institute of Technology, convened a gathering of 34 men with a shared interest in mountain exploration and the outdoors on MIT’s Boston campus. Some of the attendees wanted to form a “New England Geographical Society,” but rather than create “one more learned society,” the attendees decided to create “a vigorous, full-blooded, ardent club” that would support actual outdoor adventuring by building paths and huts available for general use. By 1906 the Appalachian Mountain Club had more than a thousand members and managed more than 100 miles of trails and many cabins. Its success inspired John Muir and some professors from the University of California at Berkeley and Stanford University to found the Sierra Club in 1892, though that organization soon veered in a different direction as a mass-membership political group, rather than an operating entity.

Today the Appalachian Mountain Club is still focused on enabling the active enjoyment of the outdoors. Its 100,000 members, 16,000 volunteers, and many loyal donors maintain over 1,800 miles of forest trails plus hundreds of shelters, working through 12 local chapters stretching from Maine to Washington, D.C. In 2003 the club took another bold step into direct conservation by raising money to buy and permanently protect a 37,000-acre tract bordering the Appalachian Trail in Maine. Six years later the organization bought an adjacent 29,500-acre block, thus creating a large continuous corridor of conservation lands stretching north to Baxter State Park and Mt. Katahdin (described in a 1930 entry). These major purchases were inspired by concern over the decline of the timber industry in Maine, which had traditionally allowed generous public use of its lands while keeping them in a wild state.

The AMC launched its “Maine Woods Initiative” to demonstrate creative ways to combine four productive uses of wild lands: recreation, conservation, sustainable forestry, and community partnerships. On their purchased lands, ecological and local economic needs are pursued simultaneously by mixing various forms of outdoor recreation, timber harvesting, and new nature-based tourism that aims to create jobs and provide the club with revenues. On this land the club currently maintains an 80-mile network of trails, three full-service lodges with private cabins in the traditional Maine sporting-camp tradition, and access for hunting and fishing, paddling, skiing, snowmobiling, and other uses.

Club history, outdoors.org/lodging/huts/125thanniversary/amc-huts-history.cfm
Fact sheet, including details on the Maine Woods Initiative, outdoors.org/pdf/upload/2013_AMC_Fact_Sheet.pdf

ACR News 07.11.14—ACR Hits the Hill

>> Federal: Washington Roundup
>> Federal: ACR Hits the Hill
>> Federal: Ryan Pens Op-Ed
>> Consider This: Connecting with Lawmakers
>> Top Reads: Charitable Giving Chugs Along, Up 0.9%


Washington Roundup

Lawmakers returned to Washington this week after the Fourth of July recess and immediately turned to determining how to fund the Highway Trust Fund. As you may recall, current estimates show that the Fund (which is used to build roads, bridges and the like) could run out of money as early as August. Historically a bipartisan issue, recent efforts to find new funding have stalled over how to pay for it: spending cuts or tax increases. On Thursday, the House Ways and Means Committee debated and passed a bill that would replenish the Fund through May 31, 2015. The bill changes pension requirements and increases customs fees to offset the $10 billion price tag. It now heads to the House floor for a vote, though no schedule has been set.

Meanwhile, after Senate Democrats previously suggested a Highway Trust Fund extension just through the end of this year, Senate Finance Chairman Ron Wyden (D-OR) released a plan on Thursday that would replenish the fund through next summer. While this new timeline is parallel to the House’s plan, there are still small differences on offsets. The Finance Committee debated and passed its plan on Thursday afternoon, and it will now head to the floor for debate, potential amendments, and a vote.  As of this writing, a timeframe for floor debate has not been announced.


ACR Hits the Hill

Members of the ACR leadership team traveled to Washington on Tuesday for a full day of meetings with Members and staff of the House Ways and Means Committee and the Senate Finance Committee. The group discussed our priority issues within House Ways and Means Chairman Dave Camp’s (R-MI) tax reform discussion draft. We also thanked Chairman Camp and others for passing a bill in June that would permanently streamline the excise tax on a private foundation’s investment income to a flat 1 percent instead of the current two-tier structure. The bill was sponsored by Rep. Erik Paulsen (R-MN) and Rep. Danny Davis (D-IL).  This PF excise tax bill has been a top priority for ACR for the last several years. Our efforts got a big boost last year when several of our members were invited to brief Chairman Camp’s Nonprofit Tax Reform Working Group on the PF excise tax. We’re very excited about the Committee’s recent progress and very proud of our ACR members who helped make this happen.

You can read more about the day by going here. We will also have a video summary of the day available on our YouTube channel next week.


Ryan Pens Op-Ed

Also on Tuesday, House Budget Chairman Paul Ryan (R-WI) wrote an op-ed calling for comprehensive tax reform, saying, “If I could make just one change in Washington, it would be to fix the tax code.” Ryan, who is widely expected to be the next Chairman of the Ways and Means Committee after Chairman Camp retires at the end of this year, went on to say that “true tax reform would both broaden the base and lower the rates.” This reaffirms his commitment both to comprehensive tax reform and to finding the lowest possible rate – only possible by limiting or eliminating many popular tax incentives like the charitable deduction. 

The ACR group met with Chairman Ryan on Tuesday as part of our meetings, and he noted his strong belief in charitable services and the importance of private giving. The group did not discuss any specifics in terms of how he would treat the charitable deduction, or any other tax incentives, in any future tax reform plan.

Ryan_ACR Group 2
(From left to right) Jan Preble, John Tyler, Robert Sharpe, Joanne Florino, Rep. Paul Ryan, Gineen Bresso, Adam Meyerson, David Wills, Brent Christopher, Linda Childears, Sandra Swirski, Rhett Butler.


Consider This—Connecting with Lawmakers

As you know, lawmakers will be back in their home states and districts during the entire month of August – and this is a great time to connect with them and discuss the importance of the nonprofit sector! To help you prepare your outreach, our friends at The Philanthropic Collaborative and the Foundation for the Carolinas are hosting a webinar next Tuesday at noon eastern to review “Tools for Outreach to Policymakers.” This webinar builds on the successful June seminar hosted by FFTC in Charlotte, and you will hear from a panel of experts on how to use TPC impact reports to promote your organization’s work. Please click here to learn more, and RSVP here.

We also recommend you take a few minutes to watch this video we put together of former congressional staffers explaining why it is so important to engage with your elected officials.


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ACR Leaders From Across the Country Converge on Capitol Hill

Conduct Meetings with Tax Writing Committee Members

Ryan_ACR Group 2

(From left to right) Jan Preble, John Tyler, Robert Sharpe, Joanne Florino, Rep. Paul Ryan, Gineen Bresso, Adam Meyerson, David Wills, Brent Christopher, Linda Childears, Sandra Swirski, Rhett Butler.

The Alliance for Charitable Reform (ACR) completed a full day of meetings Tuesday, July 8 with members and staff of the House Ways and Means Committee and the Senate Finance Committee. The group of foundation leaders discussed some of the charity-related proposals being considered in tax reform legislation and other issues affecting the nonprofit sector.

“We want to work collaboratively with members of Congress and staff to promote policies and changes to the law that will be effective in growing charitable giving in this country,” Brent Christopher, president and chief executive officer of Communities Foundation of Texas, said.

Even though ACR met with both House and Senate offices, the tax reform discussion draft released earlier this year by House Ways and Means Chairman Dave Camp (R-MI) aided in identifying the issues the group would discuss in each respective meeting. The group outlined four specific proposals in the Camp draft that raise concern, and two proposals in the draft that it applauds.

“We definitely wanted to talk about the importance of charitable giving in our society as well as the Camp draft—both the parts that we are concerned about and the parts that we support as a community,” said Gineen Bresso, vice president of special projects and general counsel at the Wasie Foundation.

The proposals in the Camp draft that are lauded by ACR include:

The PF excise tax provision has been a top priority for ACR for the last several years because the current two-rate structure has the practical effect of deterring foundations from increasing their grants during times of great need. ACR’s representatives thanked lawmakers for the proposals in the draft that the organization supports.

While the Camp draft ultimately preserves the charitable deduction— a decision that ACR wholeheartedly applauds—three of the proposals included alter the deduction in ways which would ultimately cause a significant reduction in charitable giving. The proposed changes are:

“Whenever you combine the AGI limitation with a two percent AGI floor and a larger standard deduction, it has an enormous squeezing effect on private giving,” said Rhett Butler, government liaison for the Association of Gospel Rescue Missions and founder of the Faith and Giving Coalition.

David Wills, president of the National Christian Foundation, expressed his concern over limiting the charitable deduction for particular assets to basis.

“If that limitation were to pass, it would essentially dry up the contribution of real estate and closely held business interest,” Wills said.

The fourth troubling proposal from the Camp draft was the requirement that all contributions to a donor advised fund (DAF) be distributed within five years of receipt or risk being subject to an excise tax.

“That five year grant requirement would actually be a significant disincentive to charitable giving,” Christopher said. “So we wanted to discuss with members and staff today why that proposal as it is written would not be effective in promoting and growing charitable giving in this country.”

Philanthropic Achievement of the Week

1990- Carnegie Hall is Rescued

Carnegie
Carnegie Hall is an architectural masterpiece from a musical standpoint, its history and magnificent acoustics making it the historic gold standard for American music halls. It is a classic treasure of philanthropy, having been opened for the enjoyment of the American public in 1891, a gift from Andrew Carnegie, who paid the entire bill for its creation, and whose family owned the hall until 1925. Over the decades, the world’s greatest performers delivered thousands of concerts in the facility, and the New York Philharmonic was in residence from 1892 to 1962.

By the early 1980s, though, the hall was in serious disrepair. Having rarely turned a profit in 90 years of existence, the facility required an estimated $30 million in fixes, and was in danger of being demolished. Then James Wolfensohn, an investment banker with a passion for music, led an ambitious effort to not only raise the money for restoration but also revamp the hall’s business practices to ensure a long life.

Wolfensohn overhauled the concert schedule and modernized the hall’s marketing. He donated $1 million of his own money as a challenge grant, and ended up roping some of New York’s most prominent financial and artistic names into joining the effort. They raised $80 million, increased the number of annual contributors from under 800 to over 9,000, and set the hall on a secure financial footing for the first time ever. By the time Wolfensohn ended his term as board chairman for Carnegie Hall in 1990, the project was finished, the hall renovated, and the musical capital of the nation was enjoying a bright future.

Waldemar Nielsen, Inside American Philanthropy( University of Oklahoma Press, 1996), p. 2