Sep 23, 2011
ACR newsletter (9.23.11)
Friday, September 23, 2011
The latest edition of the ACR newsletter is available below.
EVENT ALERT
ACR Charitable Deduction Lobby Day
October 6, 2011
Washington, D.C.
RSVP to .(JavaScript must be enabled to view this email address)ACR is hosting a Charitable Deduction Lobby Day on Thursday, October 6th in Washington, D.C., to educate key Members of Congress on our position to preserve charitable giving incentives. There will be a working dinner on the evening of October 5th.
Last week, the Administration proposed a new jobs bill which is to be, in part, paid for with a substantial cut to the value of the charitable deduction. He has also asked the “Super Committee” to consider his Jobs bill as part of their work. In addition, we expect the Senate Finance Committee to hold a hearing on charitable giving incentives in mid-October. ACR is hosting this Lobby Day to provide Senate Finance Committee members, and others key Members of Congress the benefit of ACR’s resources and position on charitable giving incentives.
RSVP to .(JavaScript must be enabled to view this email address)
For more details visit: http://acreform.com/article/acr_lobby_day/We welcome participation by grant making and grant receiving organizations.
Washington Roundup
Both Houses of Congress are back in session after August recess for a three-week work period. Here is an update from Capitol Hill:
- Deficit Reduction - Earlier this week, The White House released details on ways to pay for the President’s jobs bill as well as revenue raisers to reduce the deficit. As expected, the President again calls for a cap on all itemized deductions, including the charitable deduction, for individuals earning more than $200,000 and couples earning more than $250,000. ACR and our other colleagues in the Nonprofit Coalition signed a letter to members of the Super Committee urging him to protect the value of the charitable deduction by opposing efforts to reduce or cap the value of itemized deductions for charitable contributions as part of the President’s American Jobs Act.
In addition, the President calls for closing loopholes and ending tax expenditures for corporations, while also ending the Bush tax cuts for individuals earning more than $200,000. Most of the proposals are “retreads,” as we say in Washington, or repeats. One new provision that is getting much attention in the media is the President’s call for Congress to ensure that individuals earning more than $1 million per year pay at least as high an overall tax rate as middle class taxpayers – known as the “Warren Buffett Rule.” It recognizes Buffett’s now-famous complaint that his secretary had a higher tax rate than his.
All told, the President’s proposals would trim the deficit by $3.6 trillion over 10 years.
While bits and pieces of the President’s proposals may make their way into Super Committee discussions, wholesale adoption is highly unlikely.
Meanwhile, the Super Committee held a hearing on Thursday morning entitled “Revenue Options and Reforming the Tax Code.” Tom Barthold, Chief of Staff of the powerful Joint Committee on Taxation (JCT) was the only witness. He fielded questions about both corporate and individual revenue options. While tax reform was certainly on most Senators’ minds, the Committee did not give a clear indication whether they intend to include tax reform provisions in their recommendations due out before Thanksgiving. Senator Rob Portman (R-OH) summed up the conundrum on tax reform facing Super Committee members saying “the sweet spot for this committee is figuring out how do we do smart tax reform that does not provide additional burdens on the economy [but] does generate more economic activity.” That certainly appears impossible in the next 8 weeks. In addition, anticipate a Senate Finance Committee hearing on charitable giving incentives that is currently scheduled for the week of October 10th.
Funding the Government - In addition to the ongoing negotiations over deficit reduction, Congress must also pass a bill to fund the government through the end of the fiscal year on September 30th. Last night the House of Representatives passed a stopgap measure to fund the government through November 18th by a vote of 219-203. But, earlier today, the Senate blocked the House-passed bill by a vote of 59-36, due to conflict over emergency disaster aid and proposed cuts from alternative energy programs. Majority Leader Harry Reid (D-NV) has scheduled a vote for Monday evening on a Democratic alternative, and the parties are set to continue negotiations throughout the weekend.
We do not expect the government to shutdown on the 30th, as a top Republican Senate staffer predicted both chambers would work out a deal before the September 30th deadline.
In the States
Massachusetts: Board & Executive Compensation
As part of on-going efforts to increase oversight of nonprofit compensation, the Massachusetts Joint Committee on the Judiciary will hold a hearing on Tuesday, September 27, 2011 on HB 3516, “an Act regulating compensation for board members of public charities.” HB 3516 would prohibit public charity board compensation without express approval of the Commonwealth attorney general.
Earlier this summer, Massachusetts Attorney General Martha Coakley and state Senator Mark Montigny attempted to include similar language in budget legislation; that effort did not succeed. However, HB 3516, a stand-alone bill introduced earlier this year, remains in play.
We will continue to monitor the situation in Massachusetts and keep you posted.
Consider This…
President’s Jobs Bill and Nonprofits
Let’s step away from the Super Committee for a moment and take a look at the President’s jobs bill and how it might affect the tax exempt sector.
We know that one of the ways the bill is paid for is through a permanent 28 percent cap on the deduction for charitable giving. That proposal has been around for a while and we have reported on it previously. We believe it would cast a chill on giving and ultimately shrink the charitable sector, likely reducing the number of jobs in the sector. Click here to continue reading.
Making Headlines
Here are recent headlines you may find interesting:
FederalJobs Bill: President Obama has released a job creation bill that would be paid for in part by limiting the charitable deduction for wealthy taxpayers. The nonprofit community is responding in opposition to these efforts as reported Wall Street Journal, Roll Call, and Washington Post. Even if some question how much giving would decrease, there is consensus that there will be an impact in giving and that the charitable community should speak out.
Many groups including the Jewish Federations of North America are rallying their supporters to Capitol Hill having visited some 40 Congressional offices to speak on the importance of preserving the charitable deduction. ACR will be headed to the Hill on October 6th for a Charitable Deduction Lobby Day. Click here to join us.
The White House attempts to defend the jobs bill from criticism, providing a fact sheet on its benefits to nonprofit sector. After close inspection, nonprofit groups discovered that the bill does not treat nonprofit and for-profit employers equally, providing different values of incentives.
Related reading: High-income earners and the charitable deduction, Philanthropy Daily
Social Innovation Fund: Jonathan Greenblatt has been named the new head of the White House Office of Social Innovation & Civic Participation, replacing former head Sonal Shah who left earlier this year. Greenblatt served as chief executive of the company that oversees Good magazine and helped create All for Good, an online volunteer database.
State/Local
Illinois: The Illinois Department of Revenue has denied property tax exemptions to three hospitals and is reviewing applications from 15 others. It argues that they are not providing enough charity care, although there is no clearly defined state standard of care requirement. One state senator proposes that hospitals devote 3 1/2 percent of their patient load to charity care as a requirement to receive the tax exemption. Read more here.
Rhode Island: Executive compensation packages at a nonprofit health system in Rhode Island have drawn criticism from a union of nurses and hospital professionals. In response Attorney General Peter F. Kilmartin encouraged the General Assembly to pursue legislation. This echoes efforts in Massachusetts and hearkens to a trend we may expect to see more. See “In the States,” above.
Funding Advocacy: Hedge fund manager Jim Steyer has chosen to devote part of his wealth to forming the Center for the Next Generation, a nonpartisan policy nonprofit on children’s issues and the environment in California and the nation.
Next Generation Philanthropist: Howard Buffet (grandson of Warren Buffett) is employing his grandfather’s approach to business to lead his father’s foundation as the new CEO of the Howard G. Buffett Foundation. He is analyzing grants based on the same “value-investing” system his grandfather uses. Among his goals: to establish new legal means for nonprofit mergers and takeovers.
Startup America: The White House’s public-private partnership intended to increase the development, prevalence and success of innovative, high-growth U.S. firms is falling short of expectations. Program operators who were set to participate in the Startup America initiative have yet to receive assistance or see progress from the effort.
Looking for ARCHIVES of this newsletter? Click here.
2011 Philanthropy Roundtable Annual Meeting
October 27-29Is 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, ArizonaSpeakers include:
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 GroupDynamic 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