Friday, October 7, 2011
The latest edition of the ACR newsletter is available below.
ACR Fly In/Speak Out: Preserving Charitable Giving
ACR gathered over 30 philanthropic and nonprofit organizations from across the country in Washington, D.C. on October 6, 2011. We met with nearly three dozen Congressional offices to educate them about the importance of protecting the current charitable deduction from the 28% cap proposed by the Administration.
- Participants included 6 grantmakers, 5 museums, 4 human services organizations, 9 performing arts organizations,1 zoo, and a half dozen other nonprofit supporters.
- Participants hailed from states including Washington, New York, Texas, Virginia, Maryland, South Carolina, Montana, West Virginia, Nebraska, and Ohio.
- There were 35 meetings with Congressional offices of both Democrats and Republicans from the Senate Finance Committee, House Ways and Means Committee, and the Joint Selection Committee on Deficit Reduction (aka Super Committee).
A working dinner on Wednesday evening kicked-off the event. At the dinner were leaders from several national grantmaking associations demonstrating their support for the effort. Evan Liddiard, former long-time tax advisor to Senator Orrin Hatch (R-UT), provided a timely update on the legislative agenda and tips for messages that would resonate with policymakers.
On Thursday, the teams then visited the Hill for meetings with Members and key staff. We are working on follow-up from the meetings and look forward to continued discussions. For additional information or media inquiries, please contact Alison Hawkins at 202-822-8333 or firstname.lastname@example.org.
Here is an update from Capitol Hill:
- Lobby Day – ACR hosted Fly In/Speak Out: Preserve Charitable Giving yesterday (October 6th), where we conducted 35 meetings with Senate Finance, House Ways and Means, and Super Committee Members and staff. In addition to discussing the negative effects capping the charitable deduction would have on charitable services across the country(see Consider This), we confirmed that there will be a Senate Finance Committee hearing on charitable giving incentives the week of October 18th. Some Congressional offices, especially those with Members on the Super Committee, were clear that everything is on the table for deficit reduction, including the charitable deduction. On the bright side, our meetings allowed us to expand our list of Congressional champions for maintaining the charitable deduction in its current state, and we will work closely with these new allies in the future.
- Jobs Bill and the Millionaire Tax
The President’s American Jobs Act proposes to place a 28% cap on itemized deductions, which includes the charitable deduction, as a means of paying for the bill. However, in its version of the bill, the Senate Democratic leadership stripped this pay-for (along with others) from the President’s proposal and substituted a 5.6 percent surtax on individuals making more than $1 million a year. The surtax, which has been endorsed by the White House, is expected to raise $445 billion over 10 years, which is about the same amount as the 28% cap on itemized deductions. The Senate is expected to debate and vote on his bill in the near future.
Republicans have made it clear they will oppose the Senate bill, and moderate Democrats, especially those facing tough reelection campaigns, have been lukewarm at best. Regardless of the inclusion of the “millionaire surtax” in the final bill, House leadership has repeatedly stated that the President’s bill does not have a future in that chamber. On Thursday, Majority Leader Eric Cantor (R-VA) said “we’re not going to bring up the president’s bill in whole, because we don’t believe in raising taxes and in more stimulus spending.”
Taking the charitable deduction cap off the table, at least for the time being, is a good sign as we approach the Senate Finance Committee’s hearing on charitable giving incentives. The surtax on millionaires is a much easier sell, politically, for Democrats than the pay-fors in the President’s original proposal. Webelieve that the efforts of the sector, including ACR’s work, to highlight the growing opposition to the charitable deduction cap contributed to that cap not being part of the Senate Jobs package.
- Urban Institute
The Tax Policy Center (a joint venture between The Brookings Institution and the Urban Institute) hosted a series of panel discussions as part of their “Budget Pressure and Changing the Charitable Deduction: For Better or Worse?” event on October 7th. Three panel discussions explored the impact of the income tax deduction on charitable giving, presented new estimates of the effects of specific tax reform proposals on the charitable sector, examined how various principles and rationales affect the government’s decision to offer a charitable deduction, and examined how the sector remains vulnerable to changes in the tax code, such as state initiatives like payments in lieu of taxes (PILOTS).
Most importantly, the event included the unveiling of the Indiana University Center on Philanthropy’s analysis of the President’s proposal to cap the charitable deduction at 28%. This morning, the Chronicle of Philanthropy reported that the University study estimated that the cost to charities could be between $2.9 and $5.6 billion in one year. The wide range reflects the difficulty in capturing the exact behavior of taxpayers, but still depicts a scenario that would force many charitable programs into deeper financial issues. The Center’s event is scheduled to conclude later this afternoon, and we expect more details to be available over the weekend.
Nonprofits Fly In and Speak Out to Preserve Charitable Giving
15 members of the Senate Finance Committee.
19 members of the House Ways and Means Committee.
6 members of the Super Committee.
This week, ACR and our allies in the charitable community took to Capitol Hill to talk about the need to maintain a robust charitable deduction and resist any efforts to reduce or eliminate it. Seven teams from around the country participated in our “Fly In/Speak Out” event. Those teams fanned out over the Hill and participated in 35 meetings with House and Senate members and staff. We were a diverse bunch including representatives from the YMCA, the Detroit Zoo, the Boston Youth Symphony and the Evangelical Council for Financial Accountability. Click here to continue reading.
Here are recent headlines you may find interesting:
Jobs Bill: Following are reports on the President’s proposal to limit the charitable deduction and efforts to protect the value of the charitable deduction: Wall Street Journal, Denver Post, and The NonProfit Times.
Voices from across the country are speaking out against the president’s proposal: Council on Foundations, Charleston Daily Mail, and the Journal Record. there is some support. Related: The Charitable Deduction Chronicle of Philanthropy
FY 2012 Budget: Government-funded nonprofit programs are at risk in the current deficit reduction negotiations, but as Rick Cohen finds, some nonprofits groups such as the Arts community have been adept at making a strong case for the positive economic impacts of their programs.
Massachusetts: The Joint Committee on the Judiciary held a hearing on legislation (HB 3516) that would ban nonprofit board and executive compensation without the attorney general’s (AG) approval. The state’s AG Martha Coakley testified at the hearing on why she is pushing this legislation. Visit our website for more on Massachusetts.
In related news: A new report profiles salaries of top executives at the 20 wealthiest universities in Massachusetts. It finds that those schools, which include Harvard, Boston University, MIT, Boston College, Tufts University, and Northeastern University, paid hundreds of millions to top officers in 2009. Also read: Huffington Post.
Illinois: The governor of Illinois halted the state’s Department of Revenue from evaluating the tax exemptions of over a dozen nonprofit hospitals, pending an effort to craft legislation by March 1 that would set more definitive guidelines on the institutions’ charity obligations. As we reported, three hospitals had their property tax exemptions revoked recently and 15 hospitals were under review.
Comings & Goings (Nonprofit Leadership)
Council on Foundations: The Chronicle of Philanthropy provides a profile and interview with Jeff Clarke, the interim president of the Council on Foundations, on his plans for the organization over the next six months.
Atlantic Philanthropies: The California-based foundation announced the selection of Christopher Oechsli as the foundation’s new president. Oechsli has been serving as interim leader since June and served recently as counsel to Russ Feingold, the former Democratic senator from Wisconsin.
This Caught Our Eye…
Economic Bright Spot: The Silicon Valley Community Foundation, headed by Emmett Carson, is experiencing a boom in giving to its donor advised funds. Gifts and contributions have more than doubled -reaching $324 million in the first six months of this year compared with the $156 million the group received in all of 2010.
Charity Ratings: Charity Navigator launched a recently overhauled rating system as part of their plan to move beyond evaluating charities based solely on financial performance. Governance and processes now share equal weight to financials.
Nonprofit Employers: Robert Egger, head of the organization DC Central Kitchen (DCCK), argues that policymakers must shift their mindsets to see nonprofits as job creators as demonstrated by one of DCCK’s work programs which provides a public benefit to local schools and jobs for former felons.
Metrics: Recanting the ambiguous results of welfare reform programs, William Schambra, director of the Bradley Center for Philanthropy & Civic Renewal at the Hudson Institute, opines on the failure of metrics to demonstrate if and when a program really works.
Profit-Sharing: Starbucks Corp will share profits from two of its U.S. coffee shops with nonprofit groups in New York City and Los Angeles to help offset expected government funding cuts to programs for children and education.
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2011 Philanthropy Roundtable Annual Meeting
Is America in decline? Not if creative philanthropists have anything to say about it. The 20th Annual Meeting of The Philanthropy Roundtable will bring together some of our nation’s brightest minds and most inspiring leaders. Together we will explore how your private independent giving can–and does–solve America’s greatest challenges.
Can-Do Philanthropy: Solving America’s Greatest Challenges
October 27-29, 2011 at the Phoenician in Scottsdale, Arizona
Paul Brest, president, William and Flora Hewlett Foundation
Arthur Brooks, president, American Enterprise Institute
Michael M. Crow, president, Arizona State University
Robert L. Gallucci, president, John D. and Catherine T. MacArthur Foundation
Vartan Gregorian, president, Carnegie Corporation of New York
Charles G. Koch, chairman and CEO, Koch Industries
Peter and Carolyn Lynch, trustees, Lynch Foundation
Marcus Owens, partner, Caplan and Drysdale
Jeff Raikes, chief executive officer, Bill & Melinda Gates Foundation
Carl Schramm, president and CEO, Ewing Marion Kauffman Foundation
Charles R. Schwab, chairman of the board, The Charles Schwab Corporation
Thomas J. Tierney, chairman and co-founder, Bridgespan Group
Dynamic ACR sessions will cover topics including transparency, federal budget/deficit reduction, and more. Join us in Scottsdale!
To learn more or register visit: www.philanthropyroundtable.org