Alliance for Charitable Reform

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Founded in January of 2005, the Alliance for Charitable Reform is a project of The Philanthropy Roundtable. The Alliance was formed as an emergency self-defense initiative to respond to legislative proposals on Capitol Hill, some of which could adversely affect private foundations and the charities they support.

Members of the Alliance vary in size and mission – including for example small family foundations supporting causes such as underprivileged students, large foundations dedicated to projects like promoting the sciences, and myriad public charities which work hard to improve lives in many ways.

The common bond that these distinct groups of individuals and organizations share is an appreciation for the great good that comes from unleashing and trusting the individual talents of responsible citizens who are dedicating their time and effort, each in their own way, to the breathtaking variety of charitable activity that exists in this country. From that follows an understanding of the necessary prerequisite of philanthropic freedom in America -- whose protection is central to the Alliance.

To date, the Alliance has worked with congressional allies to advocate a thoughtful approach to legislation, one that balances the desire to severely punish and deter wrongdoing with the need to protect philanthropic freedom. As such, the Alliance supports commonsense legislation that would:

Increase funding for enforcement of comprehensive existing laws governing the tax-exempt sector by the Internal Revenue Service (IRS) by rededicating the substantial excise taxes paid by private foundations and fees collected from public charities to exclusively fund IRS enforcement of exempt organizations, as they were originally intended, rather than the less than 10% currently so directed;
Improve valuations of in-kind property contributions;
Increase excise taxes, sanctions and other penalties for wrongdoers;
Modify and simplify the Form 990 series to improve financial reporting; and
Impose penalties on tax-exempt entities and their managers facilitating tax shelter transactions.

Since its founding, the Alliance has successfully staved off the most troubling legislative proposals to private foundations. Such proposals introduced over the last several years include:

Accreditation requirements for foundations;
Mandatory five-year reviews of organizations’ tax-exempt status; and
“One-size-fits-all” governance mandates on boards of private foundations, including mandating outside directors on boards of family foundations and treating family members as suspect 2nd class citizens.

The Alliance has become a valuable resource – not only for our members, but also for Members of Congress and their staff who turn regularly to the Alliance with regard to these important matters.

Despite the recent power shift in Congress, we fully expect 2007 to be fraught with new opportunities and challenges for the charitable community. As such, the Alliance for Charitable Reform will remain actively involved in the legislative process. We remain committed to offering a commonsense approach to charitable legislation – punishing wrongdoers, yet ensuring that any such reforms are measured and balanced, and do not have the unintended consequence of inhibiting philanthropy in America.

© 2007 | The Alliance for Charitable Reform is a project of The Philanthropy Roundtable, a 501(c)(3) tax-exempt organization. The Alliance represents charitable organizations, including private foundations, family foundations, and public charities.