The latest edition of the ACR newsletter is available below.
Congress is in session through next Thursday before a week-long break for President’s Day.
Here is an update from Capitol Hill:
- Tax Proposals –
Last week, Senator Sheldon Whitehouse (D-RI), along with a number of his colleagues, introduced the “Paying a Fair Share Act,” that would impose a minimum tax of 30% on individuals and couples with adjusted gross incomes over $1 million. The legislation allows for only one deduction — the charitable deduction. The legislation tracks with what the President called for in his State of the Union Address – the “Buffett Rule” – as well as in his Blueprint for an America Built to Last document. We do not expect the “Fair Share Act” to advance in either chamber, but the carve-out for the charitable deduction is certainly a sign that members recognize the value of private giving incentives.
We are hopeful this message on the importance of charitable giving incentives will also carry over into the President’s budget, which is set to be released on Monday, February 13th. Behind –the-scenes conversations and media reports have indicated that the budget could either pattern the Buffett Rule proposal or be built upon the “American Jobs Act” released in September of 2011 and could call for relatively small tax reforms to reduce the deficit. You may recall that the “Jobs Act” also included a 28% cap on all itemized deductions, which includes the charitable deduction, for those with incomes over $250,000
- Payroll Tax Cut Extension –
After four open Conference Committee meetings, the payroll tax negotiations are no closer to a deal than when the Committee was named in December. As you may recall, to garner Republican support for the short-term extension, Democrats agreed to a House–Senate Conference Committee to produce a follow-on deal that would extend the payroll tax cut through the end of 2012. While there is broad agreement that the payroll tax cut of 2 percentage points should be extended among the conferees, there is little consensus on how to pay for that extension. A three-hour meeting on Tuesday yielded no results, prompting party leadership in both Chambers to point fingers at the other side for unwillingness to compromise. This only agitated Conference Committee Chairman Dave Camp (R-MI) who told reporters after the meeting that he wished they would “Let the conferees work…I don’t think the comments from either side of leadership from either body are particularly helpful.” As a result, the Committee has now begun meeting behind closed doors in an effort to finally bridge the gaps before the current extension expires on February 29th.
- Senator Grassley’s Commission –
As you may recall, in January of 2011, Senator Grassley (R-IA) released a report detailing the findings of his two-year probe into financial practices of six prominent media-based ministries. Based on the report, Sen. Grassley then asked the Evangelical Council for Financial Accountability (ECFA) for input and help facilitating “a discussion on whether these issues can be addressed without legislation.” Responding to the Senator’s request, ECFA established the Commission on Accountability and Policy for Religious Organizations, of which ACR’s Executive Director Sandra Swirski is a member. Since then, the Commission has conducted several roundtable discussions and closed-door meetings to respond to the Senator, and will also host a virtual “town hall” meeting online on February 17th. During this meeting, the Commission hopes to receive input on issues being reviewed by the group, but also on issues that are broader than the issues raised by the Senator’s probe, i.e. the Buffett Rule (see below). The public and media nationwide are invited to participate in the 90-minute event, which will begin at 1 p.m. EST and be broadcast from The National Press Club studios in Washington, D.C. To learn more, please click here.
Buffett or Buffets – Our take on the new tax restrictions
So we wonder, what do people think when they hear the President talking about the Buffett Rule?
Well of course all of you astute readers know that the Buffett Rule is all about billionaire Warren Buffett’s tax rate and not about a salad bar that goes on for miles. President Obama’s basic premise behind the Buffett Rule is this: millionaires and billionaires should not have a lower tax rate than their secretaries, the police officer that protects them or the teacher that educates their children.
Some wonder how that that scenario could be possible. It’s possible because …(keep reading)
IS YOUR CALENDAR MARKED?
Summit for Leaders
March 21, 2012
8:00 a.m. – 12:00 p.m.
Mayflower Renaissance Hotel
1127 Connecticut Avenue NW
Washington, D.C. 20036
Register Now: summitforleaders.eventbrite.com
The ACR Summit for Leaders offers a half-day of programming to provide a snapshot of the current political issues impacting philanthropy and nonprofits, and guidance on how to effectively advance your cause amid competing priorities and constant commotion. Panels including Senior Congressional Staff, policy experts and seasoned practitioners offer an insider’s look at the landscape of Capitol Hill, and how the agendas of Congress, the Administration and the states might impact the philanthropic sector. The Summit is an excellent opportunity for foundation executives, nonprofit leaders, and others interested in the intersection of public policy and philanthropy. A complete list of session and speakers will be announced soon. Click here to learn more about the ACR Summit.
Other Events on March 21:
12:00 – 1:15 p.m.
Luncheon co-hosted by Alliance for Charitable Reform, Council on Foundations and the Forum of Regional Associations of Grantmakers with commentary and analysis on the Republican Primary and the General Election.
- ACR Fly In/Speak Out (Lobby Day)
Meetings with senior Congressional staff to discuss the importance of maintaining incentives for charitable giving such as the charitable deduction. Location: Capitol Hill. (See below for more information)
5:00 – 6:00 p.m.
Reception to acknowledge the work of a key Member of Congress who is championing issues important to private philanthropy. Location: The Monocle Restaurant,
Register: http://summitforleaders.eventbrite.com/ or call 202-822-8333.
Foundations on the Hill
The ACR Summit for Leaders is held in conjunction with Foundations on the Hill (FOTH), hosted by the Council on Foundations and the Forum of Regional Associations of Grantmakers. We encourage Summit attendees who are eligible to participate in FOTH to visit www.foundationsonthehill.org for more information. Attendees must register separately for Foundations on the Hill here.
For more information contact Patrice Lee at The Philanthropy Roundtable (firstname.lastname@example.org or 202.822.8333).
ACR Fly In/Speak Out (Lobby Day) in Washington, D.C
Mark your calendars for the ACR Fly In/Speak Out (Lobby Day) with the Alliance for Charitable Reform the afternoon of Wednesday, March 21, 2012.
Why should you attend?
With President Obama once again expected to call for limiting the charitable deduction, and some Members of Congress continuing the hunt for revenue to help pay for other priorities, 2012 is shaping up to be another challenging year for the sector. Therefore, it is important that nonprofit leaders remind policymakers about what is at stake should policy changes drive less private giving.
What is Lobby Day?
In short, it’s a chance to meet with policymakers and their staff. Similar to our October event, this will provide an opportunity for you to connect with policymakers and explain the impact that a decline in private giving would have on your programs and the people you serve.
RSVP to Patrice Lee (email@example.com or call 202-822-8333).
Here are recent headlines you may find interesting:
Charitable Deduction/Tax Policy
BNA reports Senator Sheldon Whitehouse (D-RI) introduced legislation to institute a so-called “Buffett Rule” tax requiring millionaires to pay a minimum 30 percent tax rate and lose all deductions, except the charitable contribution deduction. As cited above, this builds on the President’s State of the Union address and Blueprint. Also see: Sen. Sheldon Whitehouse Explains How the Buffett Rule Will Work, Washington Post, and ‘Buffett Rule’ Tax Bill Would Preserve Charitable Deduction, Chronicle of Philanthropy.
Former Congressman Robin Hayes (R-NC) opines in The Hill on the President’s past proposals on the charitable deduction and his comments from the State of the Union that leave unclear what he plans to do incentives that encourage charitable giving. Hayes comments that reducing incentives to give will hurt nonprofits already strained by greater needs, and he reminds us of the unique nature of the charitable deduction compared with other incentives..
In an op-ed, Paul Daugherty, president and CEO of the West Virginia Grantmakers, writes about the value of the charitable deduction in encouraging charitable giving to support the work of nonprofits in West Virginia and takes aim at recent criticism of the charitable deduction.
Research: More than three-quarters of Americans believe that the charitable deduction should not be cut, capped or limited because it incentivizes people to give, according to a recent Dunham+Company study. The survey included questions about the attitudes on private giving and incentives for giving through the tax code.
Tax Reform: An Associated Press article assesses the likelihood of tax reform this year given the complexity of the issues and suggests it will be a difficult and long process.
Independent Sector has adopted a set of principles that it will use to guide the organization’s analysis and commentary on budget, deficit reduction and tax proposals. Of particular note, the principles state: Tax policy should advance America’s strong tradition of giving and volunteering. . . . the current tax deduction for charitable giving should either be preserved or modified only in ways that will: strengthen incentives to give; respect the freedom of individuals to determine the causes and organizations they participate in and support, and treat those choices equitably; and encourage all individuals to give more to communities and causes through charitable organizations. See: IS Principles for Deficit Reduction and Tax Reform.
Florida: A Florida Senate committee passed a measure (SB 596) that places limited limitations on the compensation of executives of nonprofit organizations that receive funding (comprising more than 2/3 of their funding) from the state. This was prompted by reports that executives at some community-based care organizations performing state functions were receiving large salaries and bonuses despite mixed performances. See also: Florida May Cap Salaries at State Funded Nonprofits, Nonprofit Quarterly
New York: Governor Andrew Cuomo signed an executive order placing a limit on spending for administrative costs and executive pay at state-funded service providers. The order states that an executive’s pay or other benefits can draw no more than $199,000 annually from public funds. The move comes amid heightened scrutiny of compensation at organizations that provide Medicaid-financed services to the developmentally disabled. Executive Order: Governor Cuomo Signs Executive Order to Reform Excessive Compensation at State-Funded Service Providers.
This Caught Our Eye…
Philanthropy 50: The Chronicle of Philanthropy released its annual survey of the top 50 philanthropists which finds that giving has increased to $10.4-billion last year, up from $3.3-billion in 2010. Other articles:
- Most-Generous Donors Gave More in 2011 but Still Lag Their Pre-Recession Pace
- The Philanthropy 50: Who They Are and How They Give
- A Look at the 50 Most Generous
- How The Chronicle’s Philanthropy 50 was Compiled
Philanthropic Freedom: America’s Charities, a federation of national and local charities, defends David Rubenstein’s gifts to restore and preserve historic or national sites including the National Monument and the panda exhibit at the National Zoo against recent criticism, arguing that choice in giving is a pillar of philanthropy. Also see: Billionaire philanthropist Rubenstein to give millions to help fix Washington Monument, Washington Post
Philanthropic Journey: A profile of Jennifer Buffett, daughter-in-law of Warren Buffett, examines her foray into philanthropy and the challenges philanthropists face of identifying causes where they can make the most significant and unique impact. Also see: The Billion Dollar Woman, Marie Claire.
Conservative Philanthropy: Hudson Institute scholar William Schambra discusses the aims of conservative donors and the small actions funded over decades that have served to achieve those goals.
Trends in Philanthropy: (Video) Philanthropic advisor Eric Kessler from Arabella Advisors considers the top five trends and issues that will guide the philanthropy of big donors in 2012.
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