ACR NEWSLETTER

ACR Newsletter 4.5.12

We’re delivering the ACR newsletter one day early before the holiday weekend.

New Feature - ACR Blog Roundup

ACR has launched a blog (http://www.acreform.com/blog) to highlight some of the interesting news and developments that come to our attention. Please visit the blog regularly for our thoughts on news of the day.

Here is a roundup of the ACR blog since the last newsletter edition:

• Protecting Donor Intent—An Exchange with the Ford Foundation - The Philanthropy Roundtable’s president, Adam Meyerson, continues his discussion of the importance of donor intent, including s an exchange via the Wall Street Journal with Marta Tellado of the Ford Foundation.
• Tax Reform Is Really Hard - In Slate Matthew Yglesias discusses the difficulty of tax reform in the current political climate. He highlights the charitable deduction as a perfect example. Our take on his article is here.
• Celebrity Philanthropy Not as Easy These Days - Naomi Schaefer Riley writes in Philanthropy Daily about the issues involved with celebrities and the super wealthy in philanthropy. She highlights and we comment on some interesting points about major philanthropists being aggressive about results.
• 2012 ACR Summit for Leaders Photos are In - If you haven’t already seen them, check out photos from the 2012 ACR Summit for Leaders here.

Washington Roundup

Congress is on a two-week recess for Easter and will not return until April 16th. Here is an update from Capitol Hill:

• Before Leaving for Recess - Before leaving for the Easter recess last week, the House of Representatives passed a 90-day transportation funding extension, after failing to find consensus on a longer-term bill.  The Senate, which passed a two-year transportation bill on March 14th by a vote of 74-22, passed the 90-day stopgap measure after Senators from both sides of the aisle chastised the House for not adopting their bill.  Congress has 90 days to adopt a long term deal or agree to another stopgap, the latter of which seems more likely to many observers.  In addition to heightened partisan differences, the House is in session for only 31 legislative days over the next 3 months; the Senate is in for 45.

  Also before leaving town, the House held votes on six different budget proposals, ranging from those sponsored by the more liberal Congressional Black Caucus to the conservative Republican Study Committee.  Of note was that the House passed the budget proposal spearheaded by Budget Committee Chairman Paul Ryan (R-WI) on party line, 228-191.  The chamber also voted on a plan modeled on the Simpson-Bowles Commission, which failed 38-382, and Obama’s budget, which failed 0-414.  The Senate is not expected to take up a budget this year, and Congress will likely continue to pass short-term continuing resolutions to keep the government up and running through the end of the year.

 

• Tax Work - On Thursday, March 29th, Senate Majority Leader Harry Reid filed a motion to vote on opening debate for the Paying a Fair Share Act (S. 2230) for April 16th.  This is essentially a vote on the so-called “Buffett Rule,” as contained in the bill sponsored by Sen. Sheldon Whitehouse (D-RI).  As you may know, S. 2230 includes a modified charitable giving incentive, that is, it maintains some of the current deduction for charitable gifts.  There is still a gray-area for how this “carve-out” would work with respect to the Pease limitations set to kick in at the end of this year.  PEP, or the personal exemption phase-out, rescinds the benefit of the standard personal exemption from taxpayers who earn over a certain amount. Pease is a similar phase-out, but is instead for those who itemize their taxes and earn over a certain amount, and it applies to most of the deductions a taxpayer claims.  We are continuing to get clarity around this specific issue.  For this bill to move forward, sixty votes are required to start floor debate, and we do not expect the Senate to reach that threshold.  However, this marks the first of what we anticipate will be many votes on the “Buffett Rule.”

  The House Ways and Means Subcommittee on Select Revenue Measures, chaired by Rep. Patrick Tiberi (R-OH), will hold a hearing in late April to examine the litany of annually expiring tax extenders, including the IRA Charitable Rollover.  This hearing continues the series on tax reform topics that have been discussed over the past year.  Both Rep. Tiberi and Ways and Means Committee Chairman Dave Camp (R-MI) said in a joint-statement, “Far too many provisions in the tax code are temporary, making it hard for employers to plan, invest and create new jobs for American families.  That is one reason why we are committed to comprehensive tax reform.”  This hearing will focus on expiring provisions for individuals, and therefore we view this as an opportunity to remind lawmakers about the important role of private giving.  We will keep you updated on the progress of this hearing as it takes shape.

Consider This…

Congressional Outlook Post Easter Recess
Mercifully for those of us who live and work in Washington, D.C., both the House and Senate have decamped for a two-week break back in their home states. 

So what do we expect when they return?  Something on the order of “let the political games begin!” Absent a major ‘kumbaya’ moment –which gets further out of reach as each day passes and we get closer to election day on November 6th– Washington is going to resemble the “Hunger Games” without the bows and arrows....(keep reading)

Making Headlines

Here are recent headlines you may find interesting:

News:
Slate’s Moneybox blog provides an overview of the top ten tax expenditures in the federal tax code including the charitable deduction.

Opinion:

Joanne Florino, executive director of Triad Foundation, Inc., opines in the Ithaca Journal about the importance of preserving the charitable deduction at its current level in response to the President’s proposal.

The Senior Vice President of the AARP Foundation defends the charitable deduction arguing that there will be an impact on giving if the charitable deduction is capped or eliminated and notes the deduction rewards people for doing a good thing.

For full digest of articles and opinion on this incentive for giving visit Charitable Deduction Central on ACR website.

Federal

Tax Extenders: Diana Aviv, president of Independent Sector, discusses important charitable giving incentives included in the tax extenders debate and describes the challenges for passing these line-items in the near future.

Nonprofit Tax Exemptions: In the Des Moines Register the Editorial Board criticizes the nonprofit sector and argues that Congress should set clear community benefit standards for nonprofits as well as adequately fund and authorize the IRS to monitor the sector.

State/Local

Philadelphia: A Philadelphia Enquirer op-ed criticizes area nonprofits for consuming municipal services while paying little or nothing to the city in PILOTs.

Providence: In a follow-up to previous reporting on legislative efforts to impose fees on tax-exempt institutions, Providence Mayor Angel Taveras recently indicated that tax-exempt hospitals may avoid paying such fees if they step in to provide some services to residents that the city currently offers. 

Comings and Goings (Nonprofit Leadership)

Council on Foundations: Vikki Spruill has been named the new president and CEO of the Council on Foundations. Spruill, who is currently the president and CEO of Ocean Conservancy, will start July 1, 2012. Also See: Council on Foundations Names Ocean-Conservancy Head as New Leader, Chronicle of Philanthropy

William and Flora Hewlett Foundation: The Hewlett Foundation announced that Larry Kramer, dean of Stanford Law School, will succeed Paul Brest as president beginning in September.  Also see: Hewlett Picks Another Stanford Law Dean as New President, Chronicle of Philanthropy

Corporation for National Service: Wendy Spencer, the President’s nominee to head the national service agency, was approved by the Senate. Spencer, a longtime advocate of volunteerism, replaces Patrick Corvington who stepped down from the post nearly one year ago.

This Caught Our Eye…

Philanthropic Approaches: Rebecca Rimel, President of the Pew Charitable Trusts, discusses that “philanthropy is not an either or proposition;” it can both address the root causes of societal problems while at the same time address the symptoms. She posits that both approaches “have merit and more often than not reflect donor intent.”

Celebrity & Strategic Philanthropy: Naomi Schaeffer Riley opines on two recent articles targeting the philanthropic efforts of donors who have public prominence.

Nonprofit Organizations: The Internal Revenue Service reports the continuation of a small but steady decline in the number of new applications for 501(c)(3) classification. 

UK Charitable Giving Incentives: Although tax law in the United Kingdom is not the same as tax law in the United States, there is an interesting debate occurring in the UK about charitable giving incentives. Read the latest and our thoughts on this issue here.

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