ACR NEWSLETTER

ACR Newsletter

Welcome to the Alliance for Charitable Reform’s biweekly newsletter. Here we’ll provide you with news and views on issues that impact philanthropy.

Current Issue

Friday, January 27, 2012

Upcoming Event

IS YOUR CALENDAR MARKED?

ACR 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: http://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:

• Luncheon 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) Wednesday Afternoon 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)
• Reception 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.
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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 http://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 (.(JavaScript must be enabled to view this email address) or 202.822.8333).

Washington Roundup

Here is an update from Capitol Hill:

• State of the Union - On Tuesday night (January 24th), President Obama delivered his State of the Union address.  The policy and politics-laden speech lasted just over an hour and focused on economic issues, including a call for a tax code that promotes fairness and responsibility.  Among the tax proposals the President discussed was a minimum tax for households earning $1 million or more per year.  Building on the so-called “Buffett Rule” that was first mentioned last year, Obama said “if you make more than $1 million a year, you should not pay less than 30 percent in taxes… In fact, if you’re earning a million dollars a year, you shouldn’t get special tax subsidies or deductions.  On the other hand, if you make under $250,000 a year, like 98 percent of American families, your taxes shouldn’t go up.”

  At first blush, this sounds like a renewed call for limiting all tax credits and deductions for high income households, including the charitable deduction.  It’s important to note, however, that the White House released an 8-page document entitled Blueprint for an America Built to Last”.  This document provides more detail to the President’s proposals and notes the Administration will “work to ensure that [the Buffett Rule] is implemented in a way that is equitable, including not disadvantaging individuals who make large charitable contributions.”  While this may indicate a retreat from previous policies that sought to limit the charitable deduction and other charitable giving incentives.  We are awaiting the release of the President’s budget on Tuesday, February 13th.  That budget should give us more details on this “Buffett Rule” proposal as well as the other tax proposals the President mentioned in his speech earlier this week.

 

• Legislative Activity -
  As we discussed in our last newsletter, several provisions are due to expire on February 29th, absent Congressional action.  These include the employee payroll tax cut, an extension of unemployment benefits and the so-called “doc fix.”  Earlier this week, the House and Senate conferees met on what – if anything – to do about extending these provisions and the fight over how to pay for any extension continued.  Democrats are calling for a surtax on millionaires, while Republicans are insisting on a deeper and longer wage freeze for employees of the federal government.  Despite this continued wrangling, it is expected that they will ultimately reach a compromise by the deadline.

  The Senate Finance Committee will hold a hearing on January 31st to examine the annual round of expiring tax provisions, including the IRA charitable rollover.  While we do not expect these expiring provisions to get extended until after the election, we will be sure to monitor this hearing and report any relevant news.

  
  Congress also needs to reauthorize funding for the Highway Trust Fund, which is set to run out of money on March 31st.  This will ignite a new round of debate regarding pay-fors. We don’t expect any surprises here.

  In addition, we don’t expect many tax bills to pass this year. However, both the Senate Finance Committee and House Ways and Means Committee will continue to work towards tax reform with hearings and, possibly, legislative drafts for public review.  We anticipate the period after the election, known as the “lame duck session,” to be action-packed.  The end of 2012 will bring not only a new round of expiring tax provisions, but a slew of other major considerations: the expiration of the current income tax rates and preferential rates for capital gains and dividends (otherwise known as the Bush Tax Cuts), attempts to deal with the automatic cuts that are due to go into effect as a result of the Super Committee’s failure last fall (aka sequestration), and another increase in the federal debt ceiling.

Consider This…

Tax Policy Geeks Take Center Stage—Tax Plans and Reform
Ok, we admit it.  We’re geeks.  Policy geeks.  Tax policy geeks if the truth be told.

So imagine our sense of wonder over all of the activity in tax world in the last few months.  First, Herman Cain gave us 9-9-9, next… (keep reading)

Save the Date

ACR Fly In/Speak Out (Lobby Day) in Washington, D.C.

Mark your calendars for a 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 (.(JavaScript must be enabled to view this email address) or call 202-822-8333).

Making Headlines

Here are recent headlines you may find interesting:

State of the Union & Taxes: Bloomberg BNA reports that The Obama Administration may be stepping back from its former proposal to cap charitable deductions at 28 percent despite a proposed increase to their incomes taxes. ACR’s executive director, Sandra Swirski, and Diana Aviv, president of Independent Sector, both expressed optimism with these signals. Also read: Obama Lays Out Policy Proposals, Wall Street Journal, and President Vows Not to Deter Giving, Chronicle of Philanthropy

Kiplinger highlights several popular tax provisions that expired at the start of 2012, including deductions for direct IRA distributions to charity.

Investment News reviews proposed changes in federal tax policy that may affect charitable incentives including the charitable deduction and the expiration of the IRA Charitable Rollover.

Nonprofit Oversight: Rep. Charles Boustany (R-LA), chair of the House Ways and Means Subcommittee on Oversight, outlines his priorities for this year’s legislative session and his plans for more stringent oversight of nonprofit organizations.

Kansas: In response to a recent tax proposal by Governor Sam Brownback to end itemized deductions and exemptions for Kansas taxpayers, including those for charitable contributions, Kansas House Republicans have proposed a plan that reduces personal income taxes without eliminating popular credits and deductions.

Boston: According to the Mayor of Boston, nonprofit organizations have increased their voluntary contributions to the city by 24 percent over the past six months. This represents 88% of the $10.8 million amount requested under new payments in lieu of taxes (PILOT) guidelines adopted by the mayor in 2011 that call for higher voluntary payments based on an institution’s tax-exempt property value. 

Steve Gunderson: Steve Gunderson, the former CEO of the Council on Foundations, has been named the next president of The Association of Private Sector Colleges, a for-profit college trade group. Also read: APSC Press Release and Former GOP congressman to lead higher-ed group, The Hill

Higher Education Philanthropy: Peter Wood, president of the National Association of Scholars, defends donors to colleges and universities against allegations that some are undermining academic freedom and integrity. Also see: Are Donors Dangerous?, Philanthropy Daily

Advocacy in Washington: Jeff Hamond, former senior Congressional staff person, makes the case for why this year presents a big opportunity for foundations to build relationships with key policymakers and their staffs in advance of the many reforms expected to be pursued by the 113th Congress.

Elections: In the Huffington Post, Robert Egger, founder of DC Central Kitchen, urges nonprofits to get involved with CForward, a PAC for nonprofit workers that encourages those running for office to recognize the importance of the nonprofit sector.

Internet Issues: Federal legislation recently introduced to end the practice of selling pirated or counterfeit goods, may have a unique impact on the charitable sector. Nonprofit website servers may be affected making them vulnerable to identity theft and cyber attacks and content on nonprofit websites could end up being blocked and removed from search results leading to a decrease in website traffic. Also see: Wikipedia and Other Web Sites Go Dark to Protest Proposed Law, Chronicle of Philanthropy

Giving Motivations: An article released by The Quarterly Journal of Economics finds that an overwhelming majority of Americans give to charity each year and that they are often motivated by either altruism or social pressure from their solicitor. Article: Testing for Altruism and Social Pressure in Giving.