On April 25 a letter from 229 economists was featured in Politico on the value of the charitable deduction. View the letter and full list of signers below.
NEW BOOK ON TRANSPARENCY IN PHILANTHROPY
The Philanthropy Roundtable has published a new book by noted legal scholar John Tyler of the E. M. Kauffman Foundation, titled Transparency in Philanthropy: An Analysis of Accountability, Fallacy, and Volunteerism addressing recent calls for more transparency in private philanthropy and how philanthropic organizations can respond.
Yesterday, the Charitable Giving Coalition sent a letter to Sen. Patty Murray (D-WA), Chairman of the US Senate Budget Committee, in response to the Senate’s FY 2014 Budget Resolution.
In the letter the Coalition urges Sen. Murray and the Committee to “reconsider implementing the proposals included in the FY 2014 Senate Budget Resolution that would limit the value of itemized deductions for charitable contributions.
The charitable deduction is different than other itemized deductions in that it encourages individuals to give away a portion of their income to those in need. It is not a tax cut for the wealthy.”
Senate Budget Does Not Preserve or Protect the Charitable Deduction
FOR IMMEDIATE RELEASE
March 14, 2013
WASHINGTON, D.C.—The Alliance for Charitable Reform (ACR) released the following statement following the release of the Senate Democrats’ budget today:
“The charitable deduction must be preserved and protected in order to sustain the vital work of charities across the country,” said Sandra Swirski, executive director of ACR. “We had hoped the Senate Budget proposal would reflect most Senators’ overwhelming defense of the charitable deduction that supports meals in food kitchens, breakthrough medical research, arts programs in inner cities and myriad other community services.”
Now available to guide philanthropists on the benefits and considerations of transparency efforts
Washington, D.C.— Recent calls for more transparency in private philanthropy have increased the need for philanthropic organizations to carefully plan and think about what information they will release to the public and how they will do it. To help organizations answer these questions, The Philanthropy Roundtable has published a new book by noted legal scholar John Tyler, general counsel of the Ewing Marion Kauffman Foundation, titled Transparency in Philanthropy: An Analysis of Accountability, Fallacy, and Volunteerism.
Philanthropic organizations are obligated to provide certain types of transparency—the types that are required by the federal tax system and by state laws aimed at maintaining the donor’s intent. But current heightened calls for more transparency are based on other rationales: Transparency is a good unto itself and more should be required of all institutions; more transparency is needed to further ensure that philanthropy serves “public purposes”; more transparency will counteract the “power asymmetry” between foundations and grantees; and more transparency is necessary to evaluate philanthropic effectiveness. In this book Tyler argues that none of these rationales justifies additional legally imposed philanthropic transparency, which is what advocates demand.
Transparency in Philanthropy: An Analysis of Accountability, Fallacy, and Volunteerism and the Companion Guide are available for free download here.
MARCH 8—The whiff of a so-called grand bargain to address the looming combination of long-term federal budget deficits and ever-growing entitlement costs is back in the air, thanks, in part, to what Bloomberg’s Lisa Lerer and Kathleen Hunter have described as President Obama’s “charm offensive”, including dinner with members of the other political party. “With $1.2 trillion in spending cuts mandated over the next nine years and short-term government funding set to expire on March 27,” they write, “lawmakers say the coming weeks could provide the chance for a long-term deficit-reduction bargain that has eluded Congress and Obama.” It’s clear, however—as reported by the Chronicle of Philanthropy–that the White House will continue to push for such a bargain to include new limits on the value of the charitable tax deduction. Indeed, new Treasury Secretary Jack Lew testified, during his Senate confirmation hearings, that capping charitable deductions at 28 percent of their value, even as the top marginal income tax rate rises to 39.6 percent, should be part of “an even-handed approach” to tax reform—which would limit the value of all itemized deductions. (Lew’s testimony was first highlighted in a press release issued by The Philanthropy Roundtable.)
Guest Blog Posting by Joanne Florino, Executive Director of the Triad Foundation
Writing in The Chronicle of Philanthropy, former NPR chief executive Ken Stern worries about the amount of fraud and ineffectiveness in the non-profit sector and proposes a top-down, government-run solution to his perceived problem - the creation of a new charity regulator akin to the British Charity Commission. I visited the BCC’s website and noted that the agency operates on the following premises:
• Charities are publicly accountable for the funds they receive and privileges they enjoy because of their charitable status
• Responsibility for administration and management of charities rests with trustees
• Most trustees are doing a good job in promoting and making effective the work of their charity, and in meeting the needs of their beneficiaries
• Levels of abuse are relatively low
Rep. Van Hollen recently repeated his support for this 28% proposal on CNN’s Out Front with Erin Burnett. He indicated that he expects the President’s proposal to reduced itemized deductions to remain the same as in years past. All these signs indicate that we are looking at this proposal to be back in a few weeks when the budget is released.
Andrew Watt, President and CEO of the Association of Fundraising Professionals, spoke with the Nightly Business Report regarding charitable giving incentives.
FEBRUARY 15 - Witnesses at a February 14 House Ways and Means Committee hearing said they support extending the charitable contribution deduction to non-itemizers, but only for gifts exceeding a threshold amount.
C. Eugene Steuerle of the Urban Institute told the committee that a floor under the charitable deduction could be used to extend the deduction to non-itemizers but would not have much effect on charitable giving incentives.
Roger Colinvaux of the Columbus School of Law at the Catholic University of America agreed. “I think a floor is very important” because it would eliminate the need to verify small donations, he said.
Eugene Tempel, dean of the Indiana University School of Philanthropy, liked the idea of a non-itemizer deduction and said a floor would be better than a cap. Jan Masaoka of the California Association of Nonprofits said a floor is worth considering because it would reduce giving incentives only for taxpayers who make small donations, she added.
Committee member Linda T. Sanchez, D-Calif., said there is a big disparity between the number of taxpayers who give to charity and those who can claim a charitable deduction. “I think it’s time to think about expanding access” to the deduction, she said.
