ACR Blog

Nonprofit Issues

Congress Extends Charitable Deduction Deadline for Cause of Slain New York Police Officers

Congress passed a bill last week that extends the charitable deduction deadline for 2014 returns to April 15, 2015 for those donating to organizations supporting the families of two New York police officers killed in the line of duty in December. The bill, H.R. 1527, the Slain Officer Family Support Act of 2015, is sponsored by Rep. Hakeem Jeffries (D-NY).

Legislation extending the deadline for claiming a charitable deduction for a specific cause has precedent. H.R. 3771, Philippines Charitable Giving Assistance Act, offered the same deadline extension last year for donations to organizations supporting the relief effort in the Philippines following Typhoon Haiyan. Both pieces of legislation illustrate that Congress recognizes that tax policy directly affects charitable giving, particularly when it comes to the timing and size of charitable gifts .

H.R. 1527 now heads to President Obama for signature.

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What’s My Line?

ACR Summit for Leaders 2015

In the opening session of the 2015 ACR Summit for Leaders, we had a bit of fun with messaging around the charitable deduction while conveying the critical importance of communicating to Congress that this part of our tax code must be protected. In this session four speakers delivered four different messages about the charitable deduction and audience members voted for the most persuasive message. The presenters and moderator were all members of the Charitable Giving Coalition, which has provided a unique and unified voice on Capitol Hill on issues affecting the charitable deduction since 2009.

  • Andy Finch, Director of Policy, Association of Art Museum Directors
  • Steven Woolf, Senior Tax Policy Counsel, Jewish Federations of North America
  • Sue Santa, Senior Vice President for Public Policy and Legal Affairs, Council on Foundations
  • Steve Taylor, Senior Vice President and Counsel for Public Policy, United Way Worldwide
  • Tim Delaney, President and CEO, National Council of Nonprofits (moderator)

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Charity Bills Pass House of Representatives, Senate Finance Committee

The House of Representatives passed today a package of four charity-related bills, H.R. 644, that includes legislation sponsored by Representatives Erik Paulsen (R-MN) and Danny Davis (D-IL) to streamline the private foundation excise tax to one percent – a provision the Alliance for Charitable Reform (ACR) has promoted for several years. H.R. 644 also makes permanent the IRA charitable rollover, the deduction for gifts of food inventory, and the deduction for conservation easements.

ACR applauds this bill’s passage due to the critical support it will provide to the charitable sector. All four provisions included in today’s package were passed by the House Ways and Means Committee on February 4. The bill now heads to the Senate where further action is unknown at this time.

In addition to the activity in the House, the Senate Finance Committee marked up and approved several charity-related bills on Wednesday as part of a larger package of 17 bills. Included in the package is legislation that would require the Internal Revenue Service to notify exempt organizations before revoking exempt status for failing to file information returns. Last year, ACR wrote a letter in support of this bill, S. 400, as sponsored by new Finance Committee Member Dan Coats (R-IN). The Finance Committee also approved legislation providing an exception to the private foundation excess business holdings rules for certain philanthropic business holdings, and a bill providing special rules concerning charitable contributions to, and public charity status of, agricultural research organizations.

We expect the full Senate to take up these bills, although not any time soon. We’ll continue to keep you updated as both Chambers consider important charity-related legislation.

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PF Excise Tax Bill Headed to House Floor

On Wednesday, the House Ways and Means Committee marked up and approved a package of bills making permanent several expired tax provisions, including the IRA charitable rollover, the deduction for gifts of food inventory, and the deduction for conservation easements. The committee also approved legislation sponsored by Representatives Erik Paulsen (R-MN) and Danny Davis (D-IL) that would streamline the private foundation excise tax to one percent – a provision ACR has promoted for several years. House Majority Leader Kevin McCarthy (R-CA) indicated last week that the House could vote on all of these bills the week of February 9, but a final decision will not be made until next week. We are very pleased and will update you as the bill moves forward on the House floor.

This development comes just as we are gearing up for our annual ACR Summit for Leaders on March 18. With congressional staffers once again speaking on one of the panels at the Summit, attendees are sure to get the latest news and insights from Capitol Hill. To register for the ACR Summit as well as other events during Philanthropy Week in Washington, click here. Attendance is free.

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Nonprofit Issues

ACR Marks 10 Years

January marks 10 years since the Alliance for Charitable Reform (ACR) was founded as a project of The Philanthropy Roundtable. To acknowledge this occasion, we unveil a special anniversary logo - which you can see above - that we will be using throughout 2015. We are proud of the work we have accomplished over the last decade and encourage you read through our history. Despite our successes, we continue to face threats to philanthropic freedom at both the federal and state levels. We reaffirm our commitment to working with lawmakers, policymakers, and members of the nonprofit sector to preserve private giving and the critical role it plays in our civil society.

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Thousands of volunteers and organizations will participate in the third annual #GivingTuesday today in an effort to further support the nonprofit sector and charitable organizations. According to the organization’s website, #GivingTuesday is a movement to designate a national day of giving on the Tuesday following Thanksgiving, Black Friday and Cyber Monday.

There are several ways that you or your organization can get involved.  Individuals are invited to become a social media ambassador, and registered 501(c)(3) or for-profit organizations with a commitment to benefit at least one charity can become official partners. The organization has also made several tools and resources available.

One of the many great aspects of charitable giving is the fact it can be done anytime and anywhere in this country. Having an organized charitable giving effort, though, certainly can help spur even more people into action.

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Post-Election Analysis

A lot happened as a result of Tuesday’s elections and we are here to help you sort through it all. Below is a brief analysis of the election results and a glimpse at what we can expect in the makeup of congressional leadership as well as the tax writing committees.

The Balance of Congress & Leadership Changes

The headline from Tuesday is that Republicans have taken control of the Senate, picking up at least seven seats (with two more likely), giving them a majority of at least 52-45. Alaska and Virginia are still processing results, and there will be a runoff on December 6 between incumbent Louisiana Senator Mary Landrieu (D-LA) and Representative Bill Cassidy (R-LA). Neither of those candidates earned the required 50 percent plus-1 margin necessary to win the seat outright.

Current Senate Minority Leader Mitch McConnell (R-KY) will likely take over as Majority Leader next year. His deputies are also set to take over leadership positions accordingly. Current Majority Leader Harry Reid (D-NV) has said he will run for Minority Leader with the other top three Democrats in the Senate – Dick Durbin (D-IL.), Chuck Schumer (D-NY) and Patty Murray (D-WA) – having already pledged their support.

In the House, Republicans are projected to increase their margin of control by at least 13 seats, which gives the GOP its largest majority since World War II. Current Speaker John Boehner (R-OH) is expected to remain in charge with few changes, if any, to his leadership deputies. For the Democrats, Nancy Pelosi (D-CA) is expected to remain Minority Leader and her deputies are expected to maintain their posts as well.

It is worth noting the Republican wave also netted four additional governorships.

Senate Finance Committee

Senator Orrin Hatch (R-UT) is expected to become Chairman of the Senate Finance Committee. The makeup of the committee will also change to reflect the new Senate majority. The first task for Republicans will be determining how large each committee should be along with the ratio of Republican to Democrat members. These ratios are negotiated by leaders in both parties and typically reflect the Senate’s overall breakdown. Currently, there are 13 Democrats and 11 Republicans on Finance, which is approximately the same proportion as in the entire Senate.

If the Republicans add another member, names that are circulating to join the committee include Senators Dan Coats (R-IN), Dean Heller (R-NV) and Roy Blunt (R-MO).

Ways and Means Committee

While the House majority will remain Republican, the GOP increased its margin and will get to fill a few more seats on the Ways and Means Committee. 

The members of the House Republican Steering Committee are in charge of choosing new members for open committee seats. The Steering Committee will meet in the next few weeks and consult the Committee’s regional representatives to identify potential candidates for open slots on all House committees.

With Chairman Dave Camp (R-MI) retiring and the election now over, Budget Committee Chairman Paul Ryan (R-WI) has formally announced his intention to seek the Ways and Means gavel. It is still possible he could face a challenge from Rep. Kevin Brady (R-TX), but Ryan is widely considered the favorite. While every other Ways and Means Member won re-election, Representatives Jim Gerlach (R-PA) and Rep. Tim Griffin (R-AR) are retiring at the end of the year. For the Democrats, Representative Allyson Schwartz (D-PA) unsuccessfully ran for governor and had to give up her seat. 

Names that are circulating to join the committee include Reps. Kristi L. Noem (R-SD) and Patrick Meehan (R-PA) as almost shoo-ins, and a third to be selected from Reps. George Holding (R-NC), Bill Huizenga (R-MI), Reid J. Ribble (R-WI), Tom Rice (R-SC), Todd Rokita (R-IN) and Jason T. Smith (R-MO).

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Nonprofit Issues

ACR Expertise Highlighted in Coverage of Elections

A couple of articles published and circulated Wednesday by the Chronicle of Philanthropy featured comments from staff and a member of the Alliance for Charitable Reform regarding the results of Tuesday’s elections. The Chronicle interviewed several nonprofit leaders, including ACR Executive Director Sandra Swirski, for an article analyzing the prospects of tax reform with Republicans taking control of the Senate and expanding its membership in the House of Representatives. Swirski spoke about the April 15 provision in the America Gives More Act, which would give taxpayers until April 15 to make charitable contributions applicable to the previous year. The House includes many previous small business owners who instinctively understand that business owners are in a better position to give to charity after they close their books at year end and are into the first quarter of the following year.

“They know that it’s not until the dust has settled that they really have an idea of their profits,” Swirski said to the Chronicle.

The Chronicle also included in its daily newsletter an opinion piece written by Alicia Philipp and ACR Strategy Committee member John Tyler that was originally published in February but has renewed significance following the elections. The editorial, Lawmakers Must Understand Philanthropy to Make Better Policy Choices, explains how grant makers need to speak directly to policy makers to help them understand the work of foundations as policies that will affect the sector are considered.

The best way for policy makers to learn about philanthropy is for more foundations to communicate directly with them. At a time when government money is tight and lawmakers are looking for more resources, foundations can no longer modestly rely so much on letting our activities speak for themselves or letting our grantees and trade groups do our talking for us.

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Nonprofit Issues

(VIDEO) The Effects of a 100 Percent Charitable Deduction

In the August 22  edition of the ACR newsletter, we shared a story about Puerto Rico adopting a 100 percent charitable deduction in 2011. The deduction led to a 70 percent increase in the number of individuals who made charitable donations in Puerto Rico, according to a report released by the Flamboyan Foundation.

The Flamboyan Foundation is a private, family foundation focused on improving educational outcomes for children in public schools in Washington, D.C. and Puerto Rico, according to its website. The Alliance for Charitable Reform recently interviewed Kristin Ehrgood, president of the Flamboyan Foundation, about the implementation of the tax deduction, the results of the Flamboyan Foundation’s study, and how studying donor behavior could help expand charitable giving in Puerto Rico.





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Nonprofit Issues

Constitution Day

Members of the Constitutional Convention officially adopted the Constitution as our nation’s supreme law on this day in 1787. As such, September 17 has officially been designated as a day of observance to commemorate this pivotal moment in American history.

The Constitution has endured for nearly 230 years and preserves the rights the citizens of our country hold dear. They are the very rights that have helped establish a vibrant and generous tradition of American philanthropy. In the Fall 2013 issue of Philanthropy magazine, Adam Meyerson, president of The Philanthropy Roundtable, wrote about the Constitutionally-guaranteed freedom of association and the critical role of anonymous giving in a thriving civil society. To commemorate Constitution Day, we re-publish Meyerson’s letter as a reminder of the importance of philanthropic freedom.

Misconceptions about “Dark Money”
By Adam Meyerson

A long legal tradition protects the rights of Americans to make charitable contributions without publicly disclosing them. This right to confidentiality in charitable giving is grounded in our constitutional freedom of association, and it is one of the most important elements of philanthropic freedom.

The Supreme Court ruled unanimously in NAACP v. Alabama in 1958 that “freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of the ‘liberty’ assured by the Due Process Clause of the Fourteenth Amendment.” In a landmark judgment written by Justice John Marshall Harlan II, the court held that the state of Alabama could not compel the NAACP to reveal the names and addresses of its members because doing so would expose its supporters “to economic reprisal, loss of employment, threat of physical coercion, and other manifestations of public hostility” and thereby restrain “their right to freedom of association.” This right of confidentiality applies to members of all associations, whether they be religious, educational, cultural, ideological, or devoted to other causes. As professor Anita Allen of the University of Pennsylvania Law School has put it, “Thanks to NAACP v. Alabama, government may not force even a controversial group to identify its members, absent a compelling state interest in disclosure.”

Our tax code similarly protects the confidentiality of individual contributions to public charities. In their 990 tax returns, public charities have to disclose their largest contributors, but this is for purposes of tax administration only. The Internal Revenue Service is strictly forbidden by statute from revealing these names to the public or even, with a very limited number of exceptions, to other government agencies. The same prohibitions apply when individual taxpayers have to provide the IRS with documentation about their charitable contributions. Indeed, one of the most disturbing allegations in the current IRS scandal is the charge that the agency in recent years has violated its rules and long tradition protecting donor privacy.
Donors do have to disclose publicly their contributions to private grant-making foundations, which in turn have to disclose their grants to public charities. These transparency requirements help to protect against self-dealing and to make sure that foundation grants support genuinely charitable organizations.

Donor-advised funds, America’s most rapidly growing charitable vehicle, receive donations from individuals and then make grants to other public charities on the recommendations of the original donors. Like foundations, the sponsors of donor-advised funds (which include regional community foundations; Christian and Jewish funds; and for-profits such as Fidelity and Schwab) are required to disclose the grants they make to other charities; this helps ensure that the grants are going to charities and not to for-profit or partisan political operations. But consistent with America’s historic confidentiality protection for individual donors to public charities, the sponsors can keep private their own donors as well as those donors’ individual grant recommendations.
This protection is sometimes misunderstood. For instance, conservative critics of the Tides Foundation, a liberal-left donor-advised-fund sponsor, have called it a system “to evade transparency.” Liberal critics of DonorsTrust, a donor-advised-fund sponsor for “organizations that promote liberty,” have labeled it as a “secretive funding network” and “dark-money ATM.” But the right to privacy enjoyed by contributors to donor-advised funds is no different than the right to privacy that governs the overwhelming majority of charitable giving.
Most donors of course are happy to see their contributions publicized. But a sizable minority want their philanthropy to be anonymous and will not give unless they can keep their donations confidential.

There are multiple reasons to give privately. The great 12th-century Jewish theologian Maimonides held that the second highest form of giving was “to give to the poor without knowing to whom one gives, and without the recipient knowing from whom he received.” In the Gospel of Matthew, Jesus taught that “when you give to the needy, sound no trumpet before you…do not let your left hand know what your right hand is doing, so that your giving may be in secret.”

Many anonymous donors want to protect themselves from unwanted solicitations, to protect their children from knowledge of their family’s wealth, or to be able to visit prospective grantees and “kick the tires” without anyone knowing they are a funder. Still others, like the 1950s NAACP donors, want the freedom to support controversial organizations without fear of reprisal or ostracism.

So-called “dark money” illuminates our free society.

Adam Meyerson is president of The Philanthropy Roundtable.

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