Private Foundation Excise Tax

Washington Snapshot: Tax Bill Awaits Signature by President Trump

DannyTurkel — Thu, 21 Dec 2017 18:30:00 +0000

Washington Snapshot: Tax Bill Awaits Signature by President Trump DannyTurkel Thursday, December 21, 2017 - 1:30 pm

Washington Snapshot

Washington Snapshot: Tax Bill Awaits Signature by President Trump

Thursday, December 21, 2017 - 1:30 pm

We will be taking a break from sending Snapshot through the rest of this year, and will return on Thursday, Jan. 4, 2018. We wish all our readers a safe and happy holiday!

In This Week's Edition of Snapshot

Tax reform goes to President Trump’s desk for signature
Congress is up against a tight deadline on government funding agreement
In the States: Federal tax bill affects state estate taxes

News from the Hill

Tax Reform Bill Goes to President’s Desk for Signature

It has been a whirlwind week for tax reform. Last Friday, Dec. 15, the tax conference committee issued a conference report—which provided a single, negotiated version of the House and Senate bills. Congress moved quickly to take this bill to the floor for a vote. The House initially voted to pass the legislation on Tuesday afternoon and sent it to the Senate for approval. However, upon arrival, the Senate Parliamentarian determined that there were three provisions in the bill that were in violation of the Byrd Rule requirements under the rules of reconciliation:

Expansion of eligible expenses for 529 accounts to include homeschool expenses;
Exclusion of certain small colleges from the excise tax on university endowments; and
The short title: “The Tax Cuts and Jobs Act.”

As a result, the Senate had to make last-minute changes to ensure the bill complies with the rules of reconciliation. Working through the night and into the early hours of this morning, the Senate voted 51-48 along party lines to pass the legislation. Given the last-minute changes that were made, the House was required to vote on the new version of the bill—which it did yesterday, passing the legislation by a vote of 224-201.

With passage by both chambers, the bill now awaits signature into law by President Trump. There is some uncertainty as to when the President will sign the bill. Due to a budget rule known as “PAYGO” (which stands for “pay-as-you-go”), the $1.5 trillion cost of the tax reform bill must be offset immediately by cuts in mandatory spending—in this case, Medicare. According to BGov, the President has said that he will wait until next year to sign the bill if signing it this year would trigger such cuts to Medicare. However, if Congress passes a waiver to the PAYGO rules (presumably as a part of the spending legislation that must be passed before Friday—see more below), the President has indicated that he would sign the bill into law this year. The timing of when exactly this happens will impact a number of items that taxpayers will need to make decisions about in short order.

What does this mean for philanthropy?

The final bill includes a number of provisions that will impact philanthropy, including:

Changes to individual income tax rates;
Near-doubling of the standard deduction and the failure to enact a universal charitable deduction;
Changes to itemized deductions and the Pease Limitation;
Increase of the threshold for the estate tax;
New rules for calculating UBIT;
New excise tax on charity-executive compensation; and
New excise tax on private college and university investment income.

The final bill did not include language on the Johnson Amendment, any changes to the private foundation excise tax, or provisions relating to donor advised funds.

Overall, the impact of this bill will be more detrimental to philanthropy than beneficial. The Council issued a statement yesterday, stating in part:

During a season when families and communities are coming together to find ways to give back and help those most in need, the House and Senate have voted to give Americans tax reform legislation that will increase the need and decrease their ability to help. Today’s passage of the Tax Cuts and Jobs Act will result in a decrease of $16-$24 billion in charitable giving every year, significantly decreasing the philanthropic sector’s ability to provide resources and services to people across the United States and abroad.

However, our fight to enact public policy that strengthens philanthropy does not end with the passage of this tax reform. The Council will continue to fight for a Universal Charitable Deduction, for simplifying the Private Foundation Excise Tax to the desired flat 1% rate, and for allowing IRAs to be rolled over to Donor Advised Funds. We will also remain vigilant against any efforts to weaken or repeal the Johnson Amendment protections that are so crucial to the integrity of our sector.

We will be hosting a webinar for Council members on Thursday, Jan. 4, 2018 to discuss our analysis of the impact of this legislation. See our website for more information and to register.

Congress is Up Against a Tight Deadline on Government Funding Agreement

Tomorrow, Dec. 22, marks the deadline for Congress to pass spending legislation to keep the government open. GOP leaders had planned to push through a bill that would have increased defense spending for a full year and temporarily increased all other spending until Jan. 19, 2018. The agreement also would have funded the Children’s Health Insurance Program (CHIP), as well as an $81 billion disaster aid package. However, during a House Rules Committee meeting on Tuesday evening, it became clear that plan did not have sufficient support to ensure passage.

Discussions for a new plan are currently underway. It seems most likely that the new plan will consist of two separate bills: one CR for all federal spending (including defense) until Jan. 19, and one disaster aid package. The other legislative priorities that some had hoped to tack onto this legislation (i.e. CHIP, deferred action for childhood arrivals (DACA), certain defense programs, Affordable Care Act stabilization measures, etc.) will most likely be punted to early next year in order to avoid a government shutdown.

Republican leaders in the House plan to bring this bill to the floor for a vote today. House Democrats are united in opposition to this plan, so Speaker Paul Ryan (R-WI) will have to pass the bill with only Republican votes. Assuming Speaker Ryan will be able to negotiate support for the bill from some of the most conservative members of his party with an agreement about certain changes in the future, the Senate has pledged to take action on the bill “as quickly as possible.”

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

Federal Tax Bill Affects State Estate Taxes

The federal tax bill has yet to be signed and states already have reason to be concerned about how it will affect state tax law and revenues, whether directly or indirectly. The interaction of the federal and state estate taxes is a case in point. Hawai`i, and Maine follow the threshold set in federal law of about $5.5 million for individual estates. New York raised its exemption threshold to $5.25 this year and is currently scheduled to match the federal exemption level in 2019. The District of Columbia is also scheduled to conform its exemption level to the current federal law in the near future. Where state law automatically follows federal changes, the doubling the estate tax exemption, as is done in the Tax Cuts and Jobs Act, will reduce anticipated revenues for those states and likely trigger spending cuts or other tax hikes to close the unexpected budget gaps.

In total, 17 states and the District of Columbia impose an estate tax and/or an inheritance tax (Maryland has both), with tax rates of up to 20 percent. Several states have repealed their estate or inheritance taxes in recent years, including Tennessee (2016), North Carolina and Indiana (2013), Kansas, Ohio, and Oklahoma (2010). The repeal of the estate taxes in Delaware and New Jersey take effect on January 1, 2018, despite ongoing budget shortfalls, reflecting the political pressure to reduce this government revenue source.

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Washington Snapshot: Senate Advances Tax Bill, Moving Full Speed Toward Passage

DannyTurkel — Thu, 30 Nov 2017 18:50:00 +0000

Washington Snapshot: Senate Advances Tax Bill, Moving Full Speed Toward Passage DannyTurkel Thursday, November 30, 2017 - 1:50 pm

Washington Snapshot

Washington Snapshot: Senate Advances Tax Bill, Moving Full Speed Toward Passage

Thursday, November 30, 2017 - 1:50 pm

In This Week's Edition of Snapshot

Tax reform: The Senate begins debate on tax reform, advancing tax reform ever closer to the President’s desk
In the States: Michigan nonprofits and philanthropic groups promote Census 2020, a year in review of the charitable deduction challenges and expansion, and Kansas state lawmakers honored for their work on tax policy

News from the Hill

Finally, We Know What’s up with Tax Reform

What’s Going on with the Senate Tax Bill?

Yesterday evening, the Senate voted to begin debate on its version of the Tax Cuts and Jobs Act (S. 1)—kicking off 20 hours of debate on the bill, and eventually, a process that is often referred to as “vote-a-rama.” (As a reminder, you can see our analysis of the S. 1 on our website.) During this process, the Senate will vote on amendments offered by fifteen or more members to alter the bill as introduced on the floor. A number of senators filed amendments, and are expected to raise them on the Senate floor for consideration throughout the day until wrapping things up for a final vote later today or tomorrow.

Many of these amendments have served primarily as a strategy for individual members to signal their desired priorities for tax reform rather than a means of actually augmenting the proposed bill (as was the case in the Senate Finance Committee markup). However, it is worth noting that a number of signaling efforts have been made on behalf of preserving charitable giving under this bill. In the Committee markup, Sen. Debbie Stabenow (D-MI) and Committee Ranking Member Ron Wyden (D-OR) offered an amendment that would have created a universal charitable deduction, allowing all taxpayers to claim the charitable deduction, regardless of itemizing status. The amendment failed on a straight party-line vote of 12-14. When the bill came to the Senate floor yesterday, Sen. Wyden again made an attempt to block the bill and argued that it would be detrimental to charities. This effort also included a universal charitable deduction, but again, it failed on a 48-51 party-line vote. Sen. James Lankford (R-OK) also filed an amendment to extend the charitable deduction to all taxpayers, up to one-third of the standard deduction for those who would claim it in addition to the standard deduction. Sen. John Thune (R-SD) also filed an amendment to incorporate the CHARITY Act into S.1—which includes provisions to expand the IRA charitable rollover, simplify the private foundation excise tax, and other provisions in support of charitable giving. It is possible that these amendments could come up for a vote today, but with no offset offered for either, they are not likely to get enough support to be incorporated into the final bill.

Even beyond this amendment process, there are still a number of GOP senators who have yet to confirm themselves as a “YES” vote for the bill—leaving Majority Leader Mitch McConnell (R-KY) with the challenge of converting enough of those individuals with declared concerns to “YES” votes to pass the bill. Under the rules of reconciliation (and assuming that all Democrats vote against the bill, as expected), Republicans can only afford to lose two votes from within their party. Sens. Ron Johnson (R-WI), Bob Corker (R-TN), Susan Collins (R-ME), and Jeff Flake (R-AZ) are considered undecided. (See also the Washington Post’s whip list for the S. 1.) One other key vote that may be back in-play is that of Sen. Lisa Murkowski (R-AK). Yesterday, the Senate parliamentarian informed members and staff that parts of the tax bill that would authorize drilling in the Arctic National Wildlife Refuge—an addition to the bill meant to secure Sen. Murkowski’s “YES” vote on the bill—are not allowed under the rules of reconciliation. Senate Republicans have reworked the language in hopes that the changes will be enough to permit the provision, but it is not yet clear whether the changes will be sufficient. Sen. Murkowksi has not shared whether a bill without this provision would be enough to lose her current support.

If this bill passes, it is expected that there will be a conference to negotiate a single version of the bill that reconciles the differences between the House and Senate versions. At this point, it is unclear whether this would be a formal conference according to legislative procedure, or if it would be an informal conference between Majority Leader McConnell and House Speaker Paul Ryan (R-WI).

What Does the Bill Mean for Philanthropy?

Regardless of which provisions from each bill make it into the final, conferenced version of the legislation, the data shows that it will be harmful to charities. In addition to the existing research on the severely damaging impact the House bill would have on philanthropy, new data continues to come out with findings on how the Senate bill would have consistent negative effects on charitable giving. This Tuesday, two separate entities reported new findings that demonstrate this: one by the Joint Economic Committee, and two more by the Tax Policy Center.

The Council remains committed in our opposition to this bill and will continue our efforts to lobby against the passage of the Senate bill. Yesterday, we sent a joint letter with our colleagues at Independent Sector and the National Council of Nonprofits to every Senate office urging members to vote “NO” on S. 1. The letter states, in part, “The charitable nonprofit and foundation communities stand united in opposition to the Tax Cuts and Jobs Act and, in the strongest possible terms, urge a “NO” vote on the bill. The current legislation damages the civic infrastructure upon which our communities depend, and hurts the people that we serve.”

Others in the sector have also spoken out against the tax bill, including the Minnesota Council on Foundations, the Silicon Valley Community Foundation, National Council of Nonprofits, and many more.

Why the Rush?

If the Senate cannot get a vote out this week, it might push them until next week. However, Congress has five legislative days before funding for the government expires on Dec. 8. Other factors to take into consideration are Deferred Action for Childhood Arrivals (DACA) and the Children’s Health Insurance program (CHIP). As reported by the Wall Street Journal, “Democrats may use their leverage in the spending bill to demand that the protections [for DACA recipients] be included.” CHIP expired back on Sept. 30 and Congress has not come to an agreement to keep funding the program for approximately nine million children.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

Michigan Nonprofits, Philanthropic Groups Promote Census 2020

Michigan nonprofits and foundations are gearing up for a three-year campaign for accurate counting of all Michiganders in the 2020 Census. The campaign will work to support the count through outreach and other guidance with special focus on hard-to-count groups such as immigrants, minorities, children, and low-income populations. The state is second in the nation for reliance on federal funding with forty-three percent of the state budget coming from the federal government. An accurate count under the Census is essential for reallocation of federal funding as well as representation in Congress, another concern being addressed by the campaign. “One thing we’ve learned is that nonprofits are trusted in their communities,” said Joan Bowman, external affairs officer with the Michigan Nonprofit Association. She continued, “They have established relationships and speak the community’s language and because of the role nonprofits play, they’re going to be most successful in counting those hard-to-count populations.” The campaign seeks to raise $4 million, which will be distributed via grants to nonprofits supporting field work of the campaign, and is led by the Michigan Nonprofit Association, the Council of Michigan Foundations, and the W.K. Kellogg Foundation.

Year in Review: Charitable Deduction Challenges and Expansion

Whether states consider the charitable giving tax incentive a lifeline to communities or a costly tax expenditure depends on many factors, including a culture of giving, economic vitality, and looming deficits. Many states steadfastly encourage charitable giving through their tax codes, and several this year acted to reinstate or establish new incentives. Legislators in six states (Connecticut, Illinois, Massachusetts, Michigan, Oregon, and Utah) all introduced bills this year that would have provided some tax relief for charitable donations. Illinois enacted an income tax checkoff for certain youth services while Utah established a non-refundable tax credit for certain projects in an enterprise zone.

Other states continued a troubling trend over the past seven years of taking up proposals to cap or eliminate these giving incentives. Some policymakers in Delaware and Oklahoma this year saw curbing the giving incentive as a means to fill budget deficits, but met strong opposition by champions in the nonprofit sector of both states. The Speaker of the Oklahoma House pulled a bill to impose a $17,000 cap on all itemized deductions, including charitable deductions, in the face of growing opposition of nonprofits. Delaware’s Governor included the repeal of giving incentives as part of broader personal income tax reform, which was defeated by concerted collaboration by nonprofit leaders. Also this year, Arkansas repealed a law that provided sales tax abatements to nonprofits locating or expanding in the state, and New York permanently extended a cap on the deductibility of charitable donations for those with incomes of more than $1 million.

Kansas State Lawmakers Honored for Their Work on Tax Policy

Kansas lawmakers struggled for five years dealing with the consequences of the historic tax cut experiment, but it took a supermajority in each chamber to override the veto by the Republican Governor protecting his policy agenda. The Governor’s plan called for cutting individual income taxes by 25 percent and eliminating the income tax for pass-through businesses, based on a theory that the cuts would jump-start the State’s economy relative to neighboring states. The results, instead, were significant revenue losses and spending cuts. Addressing the economic reality and intransigence of the Governor, various Republican party factions and Democrats worked together to pull the State back from “taking on water,” as one Senator put it. The conservative Senate majority leader, conceding that the tax reform package had gone too far, admitted, “I knew we needed to do something to get Kansas back on sound financial footing.” As a result of their efforts, Kansas Senate Majority Leader Jim Denning and House Minority Leader Jim Ward are 2017 Honorees for the Governing Public Officials of the Year Award.

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Washington Snapshot: Release of Tax Reform Bill Imminent

danny.turkel@cof.org — Thu, 26 Oct 2017 19:45:20 +0000

Washington Snapshot: Release of Tax Reform Bill Imminent danny.turkel@cof.org Thursday, October 26, 2017 - 3:45 pm

Washington Snapshot

Washington Snapshot: Release of Tax Reform Bill Imminent

Thursday, October 26, 2017 - 3:45 pm

In This Week's Edition of Snapshot

Tax Reform Update: House votes on key measure to advance tax reform; tax bill expected next week
IRS releases 2017-2018 Priority Guidance
In the States: Elected official fundraising for nonprofits under review in the states

News from the Hill

So, What's Up with Tax Reform?

Last Thursday, the Senate passed a budget resolution that included reconciliation instructions for tax reform, continuing the tax code overhaul process. According to NPR, “Senate Republicans passed a $4 trillion budget blueprint late Thursday [Oct. 19] by a narrow 51-49 vote, with Kentucky's Sen. Rand Paul joining Democrats in opposing the measure considered a key step in forward on President Trump's promises of a tax overhaul.” In the early hours on Friday (Oct. 20) shortly after the resolution passed, President Donald Trump tweeted, “Great news on the 2018 budget @SenateMajLdr McConnell - first step toward delivering MASSIVE tax cuts for the American people! #TaxReform.” (President Trump also went up to the Hill this past Tuesday to join Senate Republicans for lunch in an effort to unite them behind tax reform).

It was initially thought that the House—which passed their budget on Oct. 5—and the Senate would go to a conference committee (either officially or informally) to work out the differences in the two resolutions; however, the House agreed to take up the Senate-passed language (with some urging from President Trump) and is slated to pass it later today. According to POLITICO, “The House is slated to vote Thursday to formally back the Senate’s budget resolution, fast-tracking the GOP’s effort to advance a tax overhaul with a simple majority in the Senate. … The House GOP conference tentatively agreed Sunday to take up the budget the Senate passed last week—rather than try to reconcile differences through a conference committee—to save several weeks of legislative work.”

However, there could still be some complications to the passage of the budget resolution. Some House Republicans are concerned about the lack of details surrounding the possible elimination of the state and local tax (SALT) deduction—which would disproportionately affect high-tax states like those in the Northeast and on the West Coast. According to POLITICO, “That [the budget] vote has the potential to go down to the wire…given concerns that Republicans from New Jersey and New York have about the state and local tax deduction. Reps. Pete King (R-NY), Tom MacArthur (R-NJ) and Lee Zeldin (R-NY) have all said in recent days that they needed more assurances that the incentive wouldn’t be totally wiped out, as the House GOP originally proposed. (One idea has been to keep the deduction only for the middle-class, which would still require some offsetting.) ‘As of right now, I don't have enough answers to vote 'yes' on the budget,’ Zeldin said.”

Fortunately for Republican leaders, another group of legislators which could have further complicated the budget vote, the House Freedom Caucus, is likely to support passage. According to The Hill, “Conservatives that had pushed for the inclusion of mandatory spending cuts in the House budget are now focusing on swiftly passing tax reform. … According to [Rep. Dave] Brat [R-VA], they [the Freedom Caucus] were willing to drop the spending cuts if leadership would publicly set a Thanksgiving deadline for passing the tax plan.”

If the budget passes as expected in the House, we will be facing a quick progression of this legislation through Congress, according to Republican leadership. According to a House aide with knowledge of the legislation, the plan will be introduced on Nov. 1 with the intent of a markup by the Ways and Means Committee the following week and passage through the House before Thanksgiving. The aide also suggested that the Senate Finance Committee could begin markup of a bill as early as the week of Nov. 13. However, a spokeswoman for Senate Finance Chairman Orrin Hatch (R-UT) suggested that the upper chamber will adhere to its own timeline, stating that, “[the Chairman] intends to lay down a mark for the committee to advance in the coming weeks. Details will be released when finalized.”

Democrats in Congress have also weighed in on tax reform, releasing their Middle-Class Tax Reform Principles yesterday morning. In a statement on the principles, House Ways and Means Ranking Member Richard Neal (D-MA) stated that, “This country is long overdue for real tax reform that helps middle-class families, and those striving to reach the middle class, get ahead.” The principles cover several key priorities, including:

Providing relief and education opportunities for middle-class families;
Assisting middle-class families with the high cost of dependent care;
Ensuring a secure retirement for American families;
Closing the skills gap;
Expanding infrastructure investment and enhancing economic development; and
Strengthening the competitiveness of American businesses in the global economy.

In House Ways and Means Committee news, last week Rep. Pat Tiberi (R-OH) became the latest in the list of committee members who will have to be replaced by next Congress, if not sooner. The list of members—who are retiring early, not running for reelection, or leaving the House to seek a different public office—includes, Reps. Sam Johnson (R-TX), Lynn Jenkins (R-KS), Diane Black (R-TN), Jim Renacci (R-OH), Kristi Noem (R-SD), and Dave Reichert (R-WA). POLITICO Pro takes a deeper look at the members leaving the House this Congress noting, “To date, 17 Republicans and 10 Democrats have announced they intend to leave the House after the 115th Congress. Of those, 18 will run for another office, with nine running for governor in their home states. The remaining nine are ‘true retirements,’ seven Republicans and two Democrats.”

Executive & Regulatory News

IRS Releases 2017-2018 Priority Guidance

Last week, the Department of Treasury released its priority guidance plan for 2017–2018. The priority guidance plan identifies and prioritizes tax issues that the agency aims to address through regulations or revenue rulings, revenue procedures, notices, and guidance throughout the upcoming year.

In May 2017, the Council submitted comments to Treasury outlining issues of importance and urging them to prioritize these in the coming year. The plan includes several items related to philanthropy, including:

Guidance under §170(e)(3) regarding charitable contributions of inventory;
Final regulations on §509(a)(3) supporting organizations (proposed regulations were published on Feb. 19, 2016);
Guidance under §4941 regarding a private foundation’s investment in a partnership in which disqualified persons are also partners; and
Guidance regarding the excise taxes on donor advised funds and fund management.

For more information on the 2017-18 priority guidance plan, please contact Senior Counsel and Vice President of Legal Affairs, Suzanne Friday.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

Nonprofits, Foundations Strained Under Government Budget Woes

While eyes are on the federal budget and tax reform, nonprofits and philanthropy are feeling the weight of budget woes heavier than ever. The Montana Nonprofit Association annual conference brought together more than 400 nonprofits across the state this month to discuss the role of nonprofits in their communities and the need for a stable state budget. As evidenced by a recent op-ed by representatives of two United Ways, the concerns focus on threats to the ability of organizations to have impacts in their communities and the recurring mis-presumption that nonprofits and foundations can fill gaps created by spending cuts. “Charitable organizations and the nonprofit community cannot shoulder the additional weight of thousands of Montana families’ needs as the state reduces or eliminates resources and services,” the community leaders wrote. The article continued with a warning about reduced funding for social programs by asserting, “If these budget cuts go into effect, a generation from now Montana will look drastically different – and not for the better.”

Earlier this month, Nina Stack, President & CEO of the Council of New Jersey Grantmakers, raised similar concerns about the challenges philanthropies face when the governments cuts funding. “The resources in private philanthropy are miniscule compared to what government provides,” Stack explained. She stressed that philanthropy is working now to anticipate potential cuts, stating, “We have a lot of funders who are looking at their budgets and working with their grantees to understand how they can be as responsible, flexible, nimble as they need to be when the shoes start to drop.”

Massachusetts Implements New Retirement Benefits for Small Nonprofits

Massachusetts nonprofits with twenty or fewer employees may now take advantage of a new statewide 401(k) retirement plan with minimal fees and charges often associated with savings plans. The Massachusetts Defined Contribution CORE Plan is a concerted collaboration between the Commonwealth’s Office of State Treasurer and Receiver and the Massachusetts Nonprofit Network, the state association of nonprofits. The Treasurer’s Office will now be providing administration and oversight on behalf of participating employers, as well as fiduciary assistance, professional investment options, and automatic enrollment under the plan. The goal is to enable smaller charitable organizations to focus more on their missions and less on cumbersome paperwork. By providing comprehensive retirement benefits for employees, the CORE Plan is also expected to make nonprofits more competitive in the job market. The joint government-nonprofit sector program is believed to be the first of its kind in the nation.

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Washington Snapshot - May 11, 2017

Serena.Jezior@cof.org — Thu, 11 May 2017 18:06:09 +0000

Washington Snapshot - May 11, 2017 Serena.Jezior@… Thursday, May 11, 2017 - 2:06 pm

Washington Snapshot

Washington Snapshot - May 11, 2017

Thursday, May 11, 2017 - 2:06 pm

In This Week's Edition of Snapshot…

Tax Reform Update: Health care legislation passed the House — so what now for tax reform?
Private foundation excise tax simplification bill introduced in House
House Set to Hold Hearings on Tax Reform and IRS Reform
FBI Director, Census Director Are Out
Oklahoma Advocacy Averts a Cap on Charitable Deductions

News from the Hill

So, What's Up with Tax Reform?

Last week, the House inched closer to tackling tax reform after passing a bill to largely repeal and replace the Affordable Care Act (ACA). The bill now sits with the Senate — though it seems unlikely it will pass the upper chamber in its current form given the lack of support among Senate Finance Republicans.

With this matter behind them, the House now turns its full attention to tax reform. Yesterday, Speaker of the House Paul Ryan (R-WI) headed to Ohio to make the case to business leaders for a core component of the House tax plan — the border adjustment tax (BAT).

Much of the Senate Finance Committee is still skeptical of the House plan — notably, the BAT — as indicated by Committee Chairman Orrin Hatch (R-UT) on Tuesday. The Chairman’s comments came shortly after Senate tax writing committee members met with White House Chief Economic Advisor Gary Cohn and Treasury Secretary Steven Mnuchin, where it was communicated that the administration remains opposed to the BAT.

The key takeaway from all of this is that although the House has overcome one major obstacle to achieving tax reform (addressing health care legislation), the journey to passing comprehensive tax reform legislation is far from over. The White House has reiterated its intent for tax reform to be a bipartisan process, but even if that turns out to be true, Republicans still face a great deal of pushback from within their own party — with members of the far-right Freedom Caucus already crafting a tax reform plan that they hope to integrate with the existing tax blueprint plan.

Private Foundation Excise Tax Bill Introduced in House

Late last week, Congressman Erik Paulsen (R-MN), with Congressmen Danny Davis (D-IL), Pat Tiberi (R-OH), George Holding (R-NC), and Richard Nolan (D-MN), introduced a bill (H.R. 2386) in the House to simplify the private foundation excise tax to a flat rate of one percent.

Leading into tax reform, this bill is an important signal of priorities to tax writers on the Ways and Means Committee as they draft comprehensive tax legislation. The number and bipartisanship of cosponsors also signals support for the provision.

The Council is actively engaging with Members of Congress to bolster support on this issue, but it’s critical that Members hear from you — their constituents. It takes less than five minutes to reach out and urge your Representatives to demonstrate their support for strengthening philanthropy by cosponsoring H.R. 2386.

House Set to Hold Hearings on Tax Reform and IRS Reform

On May 18, the House Ways and Means Committee will hold a hearing on tax reform to highlight how it “will grow our economy and create jobs across America.” The hearing is expected to focus on policies that will “generate economic growth, create jobs, and increase paychecks for all Americans.”

Additionally, on May 19, the House Ways and Means Subcommittee on Oversight will hold a hearing to discuss overhauling the Internal Revenue Service (IRS).

According to POLITICO Pro, “'House Republicans are putting together a plan to write a bill to restructure the IRS separate from comprehensive tax reform legislation,' Rep. Peter Roskam (R-IL) recently said. Ways and Means Chairman Kevin Brady (R-TX) has said he wants to entirely rebuild the IRS to better fit customer needs — the customer being the taxpayer. Various IRS reform ideas have been discussed, including numerous suggestions for a better focus on taxpayers by improving the way they’re served.”

The hearing will be a good gauge of what House Republicans believe should be the core functions of the IRS going forward, particularly in the context of a comprehensive tax overhaul that has often been touted as being much simpler than the current tax code.

Executive & Regulatory News

Agency Shakeups as FBI Director Fired, Census Bureau Head Resigns

In what was seen as a bombshell to the country, Congress, and even senior officials at the FBI, President Donald Trump fired FBI Director James Comey on Tuesday.

According to The Wall Street Journal, “The reason for the firing, according to White House and Justice Department officials, was Mr. Comey’s much-criticized handling of an investigation into Hillary Clinton’s use of a private email server while Secretary of State. The White House said Mr. Trump relied on the recommendations of Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein.”

The FBI is currently in the midst of a probe into then-candidate Trump’s campaign and potential ties to Russia. Since the firing, Members of Congress on both sides of the aisle have questioned the timing of the firing and called for a special prosecutor to investigate the potential Russian ties to Trump’s campaign. Click here for a link to all of the Congressional statements on the Comey firing.

In further agency news, the Director of the U.S. Census Bureau has resigned. This comes at an important moment for the Bureau as they are set to begin ramping up activity for the 2020 census. According to The Washington Post, “John H. Thompson, who has served as Director since 2013 and worked for the Bureau for 27 years before that, will leave June 30, the Commerce Department announced Tuesday. The news, which surprised census experts, follows an April congressional budget allocation for the census that critics say is woefully inadequate."

Experts worry that having the Census Bureau leaderless while it faces major concerns over adequate funding could have devastating effects on preparations for the decennial count.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

Oklahoma Advocacy Averts a Cap on Charitable Deductions

In the face of unprecedented advocacy efforts from charitable nonprofits, including religious organizations, the Speaker of the Oklahoma House pulled a bill from floor consideration that would have imposed a $17,000 cap on itemized deductions, including charitable deductions, for purposes of state income taxes. The measure had been added in a committee on Monday in an effort to raise $166 million in additional revenue to help close the state’s large budget deficit.

Marnie Taylor, President of the Oklahoma Center for Nonprofits, the organization leading the advocacy efforts, expressed the key points delivered to legislators: “We feel very strongly that we should not continue to balance our budget on charity — either by shifting the burden to nonprofits or taking away the very incentives that encourage people to donate to charity. The optics of this are terrible for Oklahoma. This happened in Hawaii a few years ago, and they ended up reinstating the charitable deduction just two years later because it was such a disaster. I know that our Legislature can find better ways to increase revenue to support core services without damaging the charitable sector that fills the ever-increasing gaps in service.“

Nonprofits got the support from former U.S. Senator Tom Coburn, who released a statement saying, “Oklahoma policymakers shouldn't exacerbate Oklahoma's problems by enacting a tax increase that penalizes the productive behavior of Oklahomans who tithe, have a mortgage, charitably give, pay significant sums of property taxes to support their local schools, and pay for significant family medical expenses.”

A new version of the legislation is expected to be reintroduced today, reportedly with a carve-out to ensure that charitable deductions are not included in any cap on itemized deductions.

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Washington Snapshot - June 10, 2016

timothy.huber@cof.org — Fri, 10 Jun 2016 18:19:06 +0000

Washington Snapshot - June 10, 2016 timothy.huber@… Friday, June 10, 2016 - 2:19 pm

Washington Snapshot

Washington Snapshot - June 10, 2016

Friday, June 10, 2016 - 2:19 pm

News from the Hill

Senate Philanthropy Caucus Co-Chairs Encourage Colleagues to Join

This week, the Senate Philanthropy Caucus Co-Chairs, Richard Burr (R-NC) and Chuck Schumer (D-NY) sent a Dear Colleague Letter encouraging their fellow Senators to join the caucus. They called for colleagues to “join this bipartisan effort to support the long tradition of good works by the philanthropic sector.” Stay tuned for coming opportunities to encourage your Senators to join.

Executive & Regulatory News

Machine-Readable 990s to Become Available Next Week

This week at the annual Chicago-Kent College of Law Not-for-Profit Conference, Director of the Exempt Organizations Division of the IRS, Tamera Ripperda, announced that machine-readable 990 data will become available on June 15^th. Stay tuned for more information!

News from Around the Globe

Secretary Kerry Addresses Concerns with New Chinese Law

In early May, the Council on Foundations held a discussion for foundations and non-profits working in China, focused on the new Chinese Foreign NGO Management law. This week, during the Strategic and Economic Dialogue meetings in Beijing, Secretary of State John Kerry discussed the new law directly with Chinese President Xi Jinping and voiced concerns on how the law will impact US entities working in China. The law will drastically change how foreign foundations and non-profits register and operate in China. However, it is unclear how exactly foreign NGOs and foundations will comply with the new law because the law itself is not specific on implementation. There will be a release of implementation guidelines later this year, which should provide the detail needed to comply with the law. You can read more about their discussion from Voice of America.

Access a trusted translation of the law and review additional analysis of the law’s impacts in Foreign Policy.

Trending in Legal Affairs

When to Use Which Fund

Council legal staff has fielded several questions recently about community foundations working with PTAs and PTOs, and whether agency or designated funds are appropriate for these organizations. The answer, as so often is the case in the legal world, is “it depends.”

Many PTAs and PTOs have incorporated as legal entities and received approval from the IRS as charitable organizations qualified under Section 501(c)(3) of the Code. In this case, it is certainly appropriate to establish a designated fund to accept contributions and make grants to the PTA or PTO. However, in some cases, PTAs and PTOs have not pursued or received qualification as a 501(c)(3) charity, and may or may not even be a legal entity, but rather an unincorporated association.

This is when a community foundation needs to be sure it is asking the right questions about the status of the organization to ensure any fund created is appropriate for the circumstance. The solution for an organization that is not qualified as a 501(c)(3) charity, is to establish a fiscal sponsorship or a field of interest fund and exercise appropriate due diligence to ensure that grants made from the fund are used for a charitable purpose.

For more information on this or any other tricky legal matters, please contact the Council’s Legal Affairs team at legal@cof.org.

Access to the Council’s legal team is a valuable member benefit. Council attorneys are available to discuss your legal questions and to provide legal information by telephone, email and through our various publications and newsletters. This information is intended for educational purposes and does not create an attorney-client relationship. The information is not a substitute for expert legal, tax or other professional advice tailored to your specific circumstances, and may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

Unfunded State Liabilities are Driving Policy Challenges

A new report from J.P. Morgan about public finance decisions by state governments puts in perspective seemingly disconnected fiscal and public policy challenges that foundations and nonprofits are confronting across the country. The report, “The ARC and the Covenants 2.0” (ARC refers to “Annual Required Contributions”), found that four states – Connecticut, Illinois, Kentucky, and New Jersey – have the highest (worst) ratio of obligations for bonds and public employee retiree obligations to annual revenue. Each of the states has sought to address these and other costs of government by turning to the philanthropic and charitable communities to fill budget holes and structural deficits.

Connecticut: As it faces obligations of up to 35 percent of current revenues, Connecticut is also facing a significant budget shortfall that has resulted in spending cuts in the current and upcoming fiscal years. Funding for services provided by nonprofits has been particularly hard hit by budget rescissions. Lawmakers have also turned to taxing the property of some colleges and universities, and even considered taxing endowment earnings. (See, Washington Snapshot, April 1.) “Rather than erode the social compact between community nonprofits,” states Jeff Shaw of the Connecticut Community Nonprofit Alliance, “government and the citizenry, Connecticut, and other states, need to adopt long-term structural change to better use limited dollars while maintaining high quality services.”
Illinois: It is no surprise to anyone following state fiscal affairs that Illinois has the highest debt and unfunded obligations in the J.P. Morgan study. The state is in the 12^th month of a budget impasse for the current fiscal year and little progress appears likely for the new fiscal year that begins on July 1. One way state government has kept itself open is to demand that nonprofits continue to provide services, but not paying the bills when they come due. Nonprofits are owed hundreds of millions of dollars for services rendered and not paid by the state, many organizations have shut their doors or curtailed services, and, most importantly, individuals have not received the services they need.
Kentucky: The former Governor convened a special tax reform commission dedicated to addressing, among other issues, what it will take to close the exorbitant public pension obligations of the Commonwealth. A key recommendation of the Blue Ribbon Commission and of subsequent legislation called for capping itemized deductions, including the charitable giving incentive, at $17,500. The newly elected Governor is on record saying his administration will also study the issue. The Kentucky Nonprofit Network (KNN) is among many who have urged a balanced approach to tax reform in the Commonwealth. KNN’s Executive Director Danielle Clore says, “Examples from other states demonstrate how damaging inclusion of the charitable giving incentive in a cap on itemized deductions can be to the work of charitable nonprofits – government's essential partners in meeting the needs of Kentucky citizens.”
New Jersey: The structural deficit reported in the J.P. Morgan analysis, and a projected revenue shortfall of $1 billion, combine to make policy progress very difficult. New Jersey does not provide a state tax incentive for charitable giving and legislative proposals to create charitable deductions have run up against a fiscal stonewall for years. Also, dozens of local governments, deprived of needed funds from state government, are taking advantage of a tax court ruling last year to seek property tax and other revenues from nonprofit hospitals. The hospital challenge in New Jersey is attracting national attention as municipal governments look for their own ways to generate additional revenues from tax-exempt entities within their jurisdiction.

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Washington Snapshot - April 8, 2016

timothy.huber@cof.org — Fri, 08 Apr 2016 18:53:48 +0000

Washington Snapshot - April 8, 2016 timothy.huber@… Friday, April 8, 2016 - 2:53 pm

Washington Snapshot

Washington Snapshot - April 8, 2016

Friday, April 8, 2016 - 2:53 pm

News from the Hill

Charity Bill Introduced in Senate

The Council is pleased to announce that this week, Senators John Thune (R-SD) and Ron Wyden (D-OR) introduced the Charities Helping Americans Regularly Throughout the Year Act (S.2750).

This bill would:

Express the sense of the Senate that encouraging and preserving charity should be a goal of tax reform;
Expand IRA charitable rollover to donor advised funds (DAFs), and require disclosure of “inactive funds” policy and aggregate DAF grant percentage;
Simplify the private foundation excise tax to flat 1%;
Require electronic filing of the Form 990;
Authorize the Department of Treasury to regulate the deduction rate for mileage associated with volunteer charitable activities;
Create an exception for excess business holding tax rules applying to philanthropic business enterprises.

The Council has played an active role in encouraging the introduction of this legislation and is urging lawmakers to co-sponsor this bill. The provisions highlighted above reflect important components of our public policy agenda, and together with our colleagues in the Charitable Giving Coalition—a group of organizations dedicated to preserving the charitable deduction—we have submitted a letter to Senators Thune and Wyden in support of this bill’s position on preserving the charitable deduction.

Executive & Regulatory News

Council Signs Onto Administration's Fair Business Pledge

The Council recently signed onto the Obama Administration’s Fair Chance Business Pledge.

As a part of the growing efforts to reform the criminal justice systems and reduce barriers facing people who have been involved in this system, the pledge represents a call-to-action for members of the private sector to eliminate barriers for individuals with a criminal record and create a pathway for a second chance. It also represents a targeted effort to convene leaders, identify effective strategies, and work as a coalition to accomplish the shared goal of creating a stronger set of opportunities for people who have been impacted by the criminal justice system.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

States Addressing Employment Policies in Different Ways

2016 is shaping up to be a year when states take the leadership role in setting employment policies, but no two states have yet taken the same approach.

California approved legislation this week to raise the state minimum wage from the current $10 per hour to $15 per hour over a seven-year period. The new law, signed by Governor Brown on Monday, increases the wage rate to $10.50 on January 1, 2017, $11.00 in 2018, and then $1-per-year increases through 2022. The bill delays by one year the increases at smaller nonprofits and for-profit businesses with fewer than 25 employees, meaning the $15 hourly wage would not go into effect at those organizations until 2023.

Also this week, New York State approved budget legislation that includes a minimum wage hike to $15 per hour by 2018, with a one-year delay for employers employing 10 or fewer workers. Earlier this year Oregon raised minimum wage rates over six years, setting three separate rates depending on where in the state a worker is employed (a top rate of $14.75 in urban areas, but less in rural areas).

The New York budget bill also mandates 12 weeks of paid family leave. The program will be funded through a payroll deduction on employees and ultimately pay up to 67 percent of the statewide average weekly wage. In March, Vermont enacted a law requiring employers of all sizes to provide employees five days of paid sick leave annually. Paid leave bills are pending in the District of Columbia and Maryland.

While those states have set policies that exceed federal standards, other states are taking action to restrict local authority on employment policies. Alabama, following the example of Missouri last year, recently enacted legislation preventing local governments from setting their own minimum wage rates. Virginia’s Governor vetoed a similar bill last month. The new North Carolina legislation most noted for banning local ordinances acknowledging LGBT rights, also pre-empts the abilities of cities to mandate wage rates or other employment policies on most contractors (including nonprofits) providing services for the government.

Philanthropy News and Op-Eds

Council Board Chair Pens Op-Ed on Value of Perpetuity

Council Board Chair, and President of the Jessie Ball duPont Fund, Sherry Magill penned a letter to the editor of the Chronicle of Philanthropy this week. This piece was a response to an op-ed published earlier this week, which speculated that perpetuity in philanthropy may not be a productive or effective way to address society’s pressing issues.

Magill challenges this theory, arguing that the central question of “should charitable dollars ‘be deployed more quickly’” cannot be considered independent of another question: “what might the consequences be for the nonprofit and for citizens around the world if more foundations decided to spend their assets over a set period [of time]?”

Drawing on her expertise as a leader in the philanthropic sector, Magill notes that philanthropy is not one size fits all—that the sector is comprised of both foundations that give in perpetuity and foundations that spend down their assets. She invites her colleagues in the field to consider how their communities and their work may be different if their foundations spent down their assets.

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Washington Snapshot - December 11, 2015

timothy.huber@cof.org — Fri, 11 Dec 2015 19:31:22 +0000

Washington Snapshot - December 11, 2015 timothy.huber@… Friday, December 11, 2015 - 2:31 pm

Washington Snapshot

Washington Snapshot - December 11, 2015

Friday, December 11, 2015 - 2:31 pm

News from the Hill

Extender Negotiations Coming Down to the Wire

Make Your Voice Heard!

Despite efforts to pass a “tax extenders” package with a federal spending bill by today’s deadline, negotiations between Congressional Democrats and Republicans reached a stalemate—forcing the passage of another continuing resolution to buy more time for reaching a deal that can pass Congress and will be approved by the White House by next Friday when Congress adjourns for the year

It is critical that we make our voices heard now! Take just 5 Minutes for Philanthropy to make sure your lawmakers hear from you as these negotiations come down to the wire!

Don’t miss our next day to engage! Join us in taking the final 5 minutes of this initiative on Tuesday, December 15^th to connect with your lawmakers via Facebook. Click here to mark your calendars now!

Urge Congress to demonstrate support for philanthropy by making these charitable extenders permanent, and by including additional provisions that would expand the IRA charitable rollover to allow gifts to donor advised funds and simplify the private foundation excise tax in an end-of-year "extender" package.

Thanks to all of our members who have already reached out to your lawmakers the past few weeks—your efforts are critical!

CRS Releases New Report on Endowments

As our readers will recall, the House Ways and Means Oversight Subcommittee held a hearing back in October to examine the tax-exempt status of colleges and universities and to probe whether institutions' endowments might provide an antidote to rising costs of tuition.

One outcome of that hearing is a newly released report by the Congressional Research Service (CRS) called College and University Endowments: Overview and Tax Policy Options. The report considers four possible policy options for addressing the perceived issues pertaining to endowments:

An annual percentage payout, similar to private foundations;
A tax on university endowment earnings;
Limitations on the charitable deduction for individuals who donate to university endowment funds; and
Changing the tax treatment of debt-financed investments in strategies sometimes used by university endowments.

These four options reflect a concerning and growing trend that the Council has been following closely and keeping our members apprised of: the skepticism of endowed philanthropy. Neither new, nor limited in scope to university endowments, this skepticism is manifesting into actual policy proposals—as further evidenced by this report.

Executive & Regulatory News

Comments for IRS Gift Substantiation Proposal Due Soon

As our readers are quite familiar with, the IRS has proposed a new rule on an alternative way for charitable organizations to acknowledge charitable gifts. In lieu of a contemporaneous written acknowledgment, the rule would allow charities to file an information return by February 28^theach year that includes taxpayer identification information for donors who contribute $250 or more, and provide a copy of the return to these donors.

The Council will submit comments on behalf of our members, and will share these comments in next week’s edition of Snapshot. Comments are due by December 16^th. Additionally, our colleagues at Independent Sector and the National Council of Nonprofits are circulating a sign on letter in opposition to this proposal.

Also recently, a letter signed by 17 Members of Congress was sent to Chairman Hal Rogers (R-KY-5) and Ranking Member Nita Lowey (D-NY-17) of the House Appropriations Committee, requesting that “rider” language be included in the end-of-year spending bill that Congress will put out by December 16^th, to prohibit IRS funds from being used to “promulgate, finalize, or implement any rule that would permit or require 501(c)(3) nonprofit organizations to collect the Social Security numbers (SSNs) of donors.”

For more information about sending your own comments, click here, or email our Policy Director and Counsel, Katherine LaBeau at: katherine.labeau@cof.org.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

New Jersey Tax Challenge Heard 'Round the Country

One judge’s decision—some call it precedent setting, many others say it’s an abomination—is giving hope to cash-hungry municipalities across the country that they can soon take nonprofit resources through new taxes, fees, or payments in lieu of taxes (PILOTs).

In June, a New Jersey tax court judge struck down the property tax exemption of a nonprofit hospital, asserting that the charitable nature of 21st Century nonprofit hospitals is a legal fiction and recognizing no distinction from taxable for-profit hospitals. The judge stated that if all hospitals in their current form are structured like the one at issue in the case then none are justified in receiving property tax exemption under New Jersey law, and it’s up to the Legislature to enact statutory changes that would alter this framework.

The hospital settled the case for $15 million instead of appealing and municipal officials in Newark, and elsewhere in the state reportedly are exploring challenges to the tax exemptions or seeking payments from the hospitals within their borders.

This week, a bill was introduced in the Legislature that would reaffirm the property tax exemption for modern hospitals while simultaneously creating a mandatory payment framework for hospitals to make payments to the host municipalities – essentially a statutory PILOT. The legislation would require any owner of a nonprofit “acute care hospital” to pay a “community service contribution” in the amount of $2.50/day for each licensed bed (approx. $900/year per bed), or $750/day for each licensed satellite emergency care facility of such hospital. Policymakers reportedly are planning quick action on the bill.

The pattern in New Jersey is similar to the one followed in Illinois in 2012, where a court decision striking down a hospital property tax exemption led to changes to the law. But rather then impose new taxes on hospitals and payments to cities, the statute clarified and quantified the kinds of community benefit a nonprofit hospital must contribute to earn its tax exemption. The payment schedule that the New Jersey Legislature is considering is akin to the much-maligned Boston PILOT scheme through which city officials seek to secure a fixed amount of payments from tax-exempt hospitals and other types of nonprofits.

Philanthropy News and Op-Eds

Oregon Op-Ed Explains Why Charitable Giving Incentives are Important

In an op-ed published yesterday evening, philanthropic and nonprofit leaders in Oregon, including Susannah Morgan of the Oregon Food Bank, Jim White of the Nonprofit Association of Oregon, Jeff Clarke of Philanthropy Northwest, and Kelley Beamer of the Coalition of Oregon Land Trusts, advocated for charitable giving incentives.

The op-ed outlines the importance of enhanced deductions for contributions of food and conservation easements, and the IRA charitable rollover to Oregonians. They note that “Sen. Wyden [D-OR] is a longtime champion of a strong nonprofit sector and is taking a leadership role on this issue in Congress. However, until Congress renews and makes permanent these tax provisions, charitable donations from farmers, ranchers, small business owners and retirees will be slowed.”

To learn more about ways to get in touch with Congress, visit the Council’s website.

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Washington Snapshot - December 4, 2015

timothy.huber@cof.org — Fri, 04 Dec 2015 21:00:19 +0000

Washington Snapshot - December 4, 2015 timothy.huber@… Friday, December 4, 2015 - 4:00 pm

Washington Snapshot

Washington Snapshot - December 4, 2015

Friday, December 4, 2015 - 4:00 pm

Take Action Now on Extenders

Hundreds of thousands heard the message!

Yesterday marked the kickoff in a series of days over the next three weeks when the Council and our colleagues in the field will commit 5 minutes for philanthropy, and connect with Members of Congress about reinstating the expired charitable “tax extenders.”

Individuals and charitable organizations across the sector joined us on Twitter to reach lawmakers using the hashtag, #Act4Good—encouraging them to demonstrate their support of philanthropy by taking swift action on “extenders.” With the engagement of our members and colleagues, tweets with the #Act4Good hashtag reached hundreds of thousands of people!

But, the effort must continue! With two weeks left in this session of Congress, we need your help!

Don’t miss our next day to engage! Join us in taking 5 minutes on Tuesday, December 8^th to email your lawmakers.

To learn more about this advocacy initiative, and the current status of "extenders," join us this Friday, December 4^th for our Washington Update: End-of-Year Hill Activity webinar. Click here to register now!

In addition, our colleagues at Independent Sector circulated an open letter, which the Council signed, to leadership in the House and Senate urging their support for making permanent the three charitable tax extenders: 1) IRA charitable rollover, 2) enhanced deduction for contributions of food inventory, and 3) enhanced deduction for contributions of conservation easements.

News from the Hill

Bill Introduced to Simplify Car Donations

Representative Todd Young (R-IN-9) recently introduced the “Charitable Automobile Red-Tape Simplification Act”, or “CARS” Act.

Currently, when a car is donated for charitable purposes, the donor may claim a deduction for the amount the car is sold for by the charity. Under this structure, the donor must wait to claim a deduction until the charity is able to sell the car. According to a statement by Young, this delay in time between the donation and claiming a deduction has contributed to a decline in donations of cars to charity by 83.1% since 2004.

This new bill would simplify the process for donating cars with a fair market value between $500 and $2,500. Under this proposed structure, as long as donors of cars within this value range both “1) obtain a valuation from an authorized online valuation service (such as Kelley Blue Book), and 2) the receiving charity verifies the physical condition of the vehicle,” a deduction may be claimed at the time of donation.

Co-sponsor of the bill, Linda Sanchez (D-CA-38) noted that, “By making this simple change to the charitable automobile donation process, the CARS Act will make it easier for people to donate their cars to charities that provide… critical services.”

Executive & Regulatory News

Comments for IRS Gift Substantiation Proposal Due Soon

As our readers will recall, the IRS has proposed a new rule on an alternative way for charitable organizations to acknowledge charitable gifts. In lieu of a contemporaneous written acknowledgment, the rule would allow charities to file an information return by February 28^th each year that includes taxpayer identification information for donors who contribute $250 or more, and provide a copy of the return to these donors.

The Council believes this rule is problematic. We’ve identified donor privacy concerns with the reporting of personal donor information like Social Security numbers. The rule would create a “slippery slope,” with the IRS ultimately treating this reporting as mandatory or as a best practice. Collecting personal information from donors would also be a significant administrative burden for nonprofits with potentially low success as donors may hesitate to provide the necessary information in a timely manner.

Comments on this matter will be due by December 16^th. The Council is finalizing comments, and will be submitting them in the coming days. Several of our colleague organizations are also submitting comments. For more information about sending your own comments, click here.

If you have questions, or would like more information on this topic, please feel free to email our Policy Director and Counsel, Katherine LaBeau at: katherine.labeau@cof.org.

News from Around the Globe

Update on Financial Action Task Force (FATF)

As you may know, the Financial Action Task Force (FATF) is seeking to update its Interpretive Note (IN) to FATF Recommendation 8, which sets standards for how countries can implement counterterrorism regulations that apply to nonprofits.

Laws inspired by Recommendation 8 can often be overly restrictive and deter grantmaking and charitable giving in many countries, and this is a great opportunity to revisit the standards that lead to these laws. This process could result in a much more civil society-friendly Interpretive Note that would help reduce restrictions to cross-border grantmaking in individual countries.

In response to a public consultation solicitation, the Council submitted comments on November 27th urging FATF to revise the IN to reflect an approach that is proportionate to the actual risk posed by individual charitable organizations. “As countries impose restrictive counter-terrorism regimens with disproportionate burdens to entry for grantmakers, millions of charitable dollars are diverted elsewhere or simply not granted at all,” we explained in our comments.

Trending in Legal Affairs

Donor Initiated Funding and the Public Support Test

The Legal Affairs team was recently contacted with an interesting question. A donor with a donor advised fund at a small community foundation holds a yearly fundraising event. To date, the donor has always assumed full responsibility for the event, collected all contributions and donated the proceeds to the community foundation as a lump sum. The community foundation acknowledges the contribution as a single gift from the donor.

However, as the success of the event grows each year, the money raised has become a significant portion of the community foundation’s annual income. The concern now is that by treating the contribution of the event proceeds as a single donation from the donor, will the community foundation be at risk for failing its public support test and “tipping” into private foundation status?

The Council’s legal team responded that community foundations generally have two options when it comes to donor initiated fundraising events. First, they can treat the event as a foundation-sponsored event and individual contributions can be treated as gifts directly to the community foundation. All individual donors would receive tax receipts or gift acknowledgement letters (noting any goods or services received in exchange for the contribution) and the individual donors can receive the appropriate tax deduction. However, foundation sponsored events can be a lot of work for the foundation, not to mention potential liability concerns associated with holding events.

The second option is to treat the event as a private event hosted by the donor. The contributions collected by the donor would be aggregated and the donor makes a single gift to the community foundation. Only the donor/fund holder would be entitled to receive the tax receipt or gift acknowledgment letter and any corresponding tax deduction. This option relieves the foundation of the administrative work and potential liability concerns but can lead to the tipping problem described above. Additionally, individuals contributing to the event do not share in the tax benefit.

In this case, the tipping problem was a real concern and the community foundation was at risk for failing the public support test. Therefore, transitioning the event to a foundation-sponsored fundraiser was the best option.

For more information on this or any other tricky legal matters, please contact the Council’s Legal Affairs team at legal@cof.org.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

Governors Order Nonprofits to Deny Services to Syrian Refugees

More than 30 governors have declared that their states will not accept refugees from Syria, claiming security concerns following the Paris terrorist attacks, and several are attempting to block nonprofits' efforts to assist in refugee resettlement efforts pursuant to existing government contracts. Recently, New Jersey Governor Christie instructed nonprofit organizations to notify the state of any Syrian placements in the state. Likewise, Indiana Governor Pence ordered state agencies to stop resettlement procedures for Syrian refugees, and Indiana’s Division of Family Resources reportedly sent letters to two nonprofits, demanding that they suspend resettlement efforts for families due to arrive soon.

The Texas Health Commission this week filed suit against the nonprofit International Rescue Committee and the federal government in an attempt to force the nonprofit to comply with an order from Governor Abbott that nonprofits not assist Syrian refugees. Aid to refugees from other countries is not affected by the Governor’s order, raising equal protection and national origin concerns, among many others.

The federal government informed many nonprofits last week that the actions and objections of the governors are not controlling. "States may not deny (Office of Refugee Resettlement) funded benefits and services to refugees based on a refugee's country of origin or religious affiliation,” wrote Robert Carey, director of the office. He went on to explain, “Accordingly, states may not categorically deny ORR-funded benefits and services to Syrian refugees," adding that states and agencies that do not comply would be violating the law and "could be subject to enforcement action, including suspension or termination."

The refugee challenge raises larger and recurring concerns about government infringement on the independence of nonprofit organizations based on contractual relationships. Earlier this year the New York Senate and Assembly passed a bill that would have defined as “public employer” any nonprofit that receive at least 50% of its budget from municipal, state, or federal sources. Governor Cuomo recently vetoed the bill that would have imposed costly workplace violence assessments and mitigation programs on the grounds that it was vague and did not also apply the extra costs and burdens on for-profit businesses.

Philanthropy News and Op-Eds

Domestic Philanthropy and Sustainable Development Goals

The Council is excited to announce two events this month that will explore how local philanthropy can support the universal sustainable development goals, in Little Rock and San Francisco. Speakers at both events will discuss how this new universal framework, adopted by the United Nations in late September, is relevant to the domestic programs of funders, including ongoing work to improve education, health, and workforce development programs, as well as to reduce poverty and inequality across the United States.

The Council’s president and CEO, Vikki Spruill, also recently published an article in the Alliance Magazine which discusses how American foundations can see themselves in these Sustainable Development Goals.

As she says, “The SDGs offer one of the broadest and most unifying global frameworks for eradicating poverty everywhere. Countries can work together on global poverty but each country, including the US, must also focus domestically, especially given the 15 per cent of Americans that live in poverty today. What remains unclear is whether US philanthropic organizations working on domestic issues, from community foundations to corporate giving programs, can see themselves in the SDGs.” We look forward to discussing this in detail with funders in Little Rock and San Francisco later this month.

You can learn more about what funders should know about the SDGs on the Council website.

White House Briefing on Syrian Refugee Crisis

On Tuesday December 1^st, the Council connected our members to the White House for a briefing about the Syrian refugee crisis. Hosted by the President's Senior Adviser Valerie Jarrett who discussed the US government’s response to the crisis, the 30-minute call included discussion with several corporate funders about how they are responding to the crisis and connected our members with Interaction (the largest alliance of U.S.–based international NGOs who focus on disaster relief and sustainable development) who described how different NGOs are currently responding on the ground. The main take-aways from the discussion included:

The UPS Foundation shared details of its commitment to providing financial, in-kind, and volunteer support to aid refugees in partnership with various NGOs.

Airbnb described its efforts to provide travel credits to relief workers helping refugees, in addition to launching a donation site to match contributions for relief-worker accommodations.
InterAction highlighted its recently launched Hope for Syria fund and donation site, which will evenly distribute donations directly to humanitarian assistance organizations, which provide the much needed financial assistance to Syrian refugees in the region and domestically.

You can find out more information about the Syrian crisis and the government’s response at aidrefugees.gov and can also reference the Council’s regularly updated resource page about the refugee crisis.

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Washington Snapshot - November 20, 2015

timothy.huber@cof.org — Fri, 20 Nov 2015 22:33:44 +0000

Washington Snapshot - November 20, 2015 timothy.huber@… Friday, November 20, 2015 - 5:33 pm

Washington Snapshot

Washington Snapshot - November 20, 2015

Friday, November 20, 2015 - 5:33 pm

Washington Snapshot will be going dark next week in recognition of the Thanksgiving holiday. We wish our readers a happy and peaceful holiday with family and friends. Snapshot will return on Friday, December 4^th.

Urge Congress to Make Charitable Tax Extenders Permanent

The IRA Charitable Rollover, along with the enhanced deductions for conservation easement and food inventory contributions, were retroactively extended for 2014 for just two weeks, and have not yet been made available for 2015 or future years.

The time is NOW to urge your lawmakers to act swiftly to pass these provisions into law for 2015 and beyond. In addition, tell your lawmakers to expand the IRA Charitable Rollover to donor advised funds (DAFs) and additional giving tools, and to simplify the two-tiered private foundation excise tax.

TELL LAWMAKERS IN CONGRESS: “Help charities this giving season: make the charitable “tax extenders” permanent, expand the IRA Charitable Rollover to allow gifts to DAFs, and simplify the private foundation excise tax. The charitable sector and all those who rely on our service cannot wait—we are counting on your support.”

With just 3 legislative weeks left this year, leaders in the House and Senate need to hear from you to understand how important these provisions are to charitable organizations like yours.

Contact your Representative and Senators TODAY by phone, email, or Twitter. And, be on the lookout for more information from us about a big social media push before the year’s end!

For more information regarding permissible lobbying activity by charitable organizations, click here.

News from the Hill

New PRI Bill Introduced in Senate

Yesterday, Senators Cory Gardner (R-CO) and Gary Peters (D-MI) introduced the Philanthropic Facilitation Act (PFA). According to the press release, this legislation aims to encourage investment in rural and urban areas by reforming and streamlining the IRS approval process for program-related investments in community improvement and job creation.

“Charitable foundations are playing a significant role in the economic recovery of cities across Michigan by branching out into investment in economic development,” Peters said in a press release yesterday. Gardner added that the “Philanthropic Facilitation Act benefits rural economies in particular by cutting red tape and removing barriers between philanthropists and small businesses, ultimately leading to more job creation.”

We understand that a version of this legislation will be introduced soon in the House, as well. The Council supports ways to encourage a broad range of philanthropic activity and investment, and will keep our readers up-to-date on any new developments with this legislation.

Ways & Means Subcommittees

Congressman Kevin Brady (R-TX-8), the newly-elected Chairman of the House Ways and Means Committee, announced the selection of new subcommittee chairs this week. As our readers know well, the Ways and Means Committee has jurisdiction in the House over all of the tax policies that affect both the business operations of charitable organizations and tax incentives for charitable donations by individuals.

“These talented and deeply qualified members will lead our committee’s effort to advance a pro-growth agenda to get America back on the right track…,” Chairman Brady said in his announcement.

Chairman Brady also worked with the Ways and Means Committee to re-name the Subcommittee on Select Revenue Measures the “Subcommittee on Tax Policy.” Congressman Charles Boustany Jr. (R-LA-3) chairs this Subcommittee, which covers charitable tax issues at the subcommittee level.

Executive & Regulatory News

Input Needed: Council Comments on IRS Gift Substantiation Proposal

As we reported last week, the IRS has proposed a new rule on an alternative way for charitable organizations to acknowledge charitable gifts. In lieu of a contemporaneous written acknowledgment, the rule would allow charities to file an information return by February 28^th each year that includes taxpayer identification information for donors who contribute $250 or more, and provide a copy of the return to these donors.

Through conversations with other national organizations that represent the sector, the Council is under the impression that this rule is problematic. There are donor privacy concerns at stake with the reporting of personal donor information like Social Security numbers. There is also the possibility that the rule would create a “slippery slope,” with the IRS ultimately treating this reporting as mandatory or as a best practice. Collecting personal information from donors would also be a significant administrative burden for nonprofits with potentially low success as donors may hesitate to provide the necessary information in a timely manner.

The Council is soliciting input from our members to inform our comment submission. Please contact Katherine LaBeau at Katherine.labeau@cof.org if you want to weigh in on the impact of these proposed rules.

Click here for more information about submitting your own comments, due December 16^th.

News from Around the Globe

FATF Seeks Comments from Nonprofits

As we’ve mentioned before, the Financial Action Task Force (FATF), an international body that sets standards for anti-terrorist financing and anti-money laundering laws, is currently evaluating the U.S. government’s compliance with these standards—including those relevant to charitable organizations. The Council, along with other U.S.-based charitable organizations, is strategizing how to work with the FATF evaluators to increase awareness of the challenges charitable organizations face in working with U.S. counterterrorism measures.

Additionally, FATF is seeking to update its Interpretive Note to FATF Recommendation 8, which sets standards for how countries can implement counterterrorism regulations that apply to nonprofits. Laws inspired by Recommendation 8 can often be overly restrictive and deter grantmaking and charitable giving in many countries, and this is a great opportunity to revisit the standards that lead to these laws.

FATF's purpose in updating the Interpretive Note is to make it consistent with the risk-based approach for anti-terrorist financing regulations, and to clarify which charitable organizations are covered by Recommendation 8. This process could result in a much more civil society-friendly Interpretive Note that would help reduce restrictions to cross-border grantmaking in individual countries.

FATF is conducting an open comment process on how they should revise the Recommendation 8 Interpretive Note, with comments due November 27th. Comments are limited to one page, but you can also choose to provide red-lined edits to the current Interpretive Note instead of or in addition to writing comments. You can submit comments here.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

State Budget Challenges Continue, Worsen

The Illinois budget standoff between the Governor and Legislature shows no sign of easing, but the impact is becoming evident in closings and reduced services by nonprofits in parts of the state. In a recent survey, nearly 30 percent of people in southern Illinois said they or an immediate family member have been personally affected by the budget fight, and one in 10 said they've lost or face the threat of losing a job.

Meanwhile, there is hope in Pennsylvania that policymakers are close to an agreement to end the months-long impasse on adopting a budget that would increase education funding and the sales tax while reducing property taxes. Many nonprofits in the Commonwealth have not been paid for services they have already provided under grants and contracts with the government, and there is no indication yet when those bills will be paid. The Pennsylvania Association of Nonprofit Organizations and other nonprofits and foundations are hosting a Stand for Pennsylvanians Day on Monday, November 23, to tell the collective story of Pennsylvania citizens directly impacted by the budget impasse and to mobilize clients and members of local communities to support the bi-partisan efforts already underway to pass the budget.

Elsewhere, budget shortfalls in the current fiscal year are forcing states to make immediate cuts. In addition to actions in Connecticut and Delaware, Kansas revised downward its revenue forecast by $159 million, and immediately implemented budget adjustments; fiscal year 2017 revenue is now expected to be $194 million below estimates. This week, Louisiana’s Governor announced a plan that includes health care spending cuts and delays in reimbursements to close an estimated midyear revenue shortfall of nearly $500 million.

Philanthropy News and Op-Eds

Community Foundation Week Highlights

Hundreds of US community foundations spent November 12-18 celebrating the 26^th Annual Community Foundation Week. First established by proclamation of President George H. W. Bush, the event is an opportunity to highlight their work for donors, the public, and policymakers.

The event was recognized this week by Congress. In a statement to his peers, Philanthropy Caucus Co-Chair Representative Pat Tiberi (R-OH-12) highlighted the week, saying "Mr. Speaker, I rise today to honor community foundations all across the country that embody the generosity of spirit that is such an important American value."

Council members took part in the festivities through social and traditional media, events and galas, and speaking with their elected officials. For more on the Council’s work with community foundations, visit our recently updated Programs and Services page.

DC Bar Event on Private Foundation Rules

Council staff participated in a DC Bar event panel last week entitled “Private Foundation Updates: Recent Guidance and Investing for Charitable Purposes.” The session addressed recent regulations and guidance from the Treasury Department related to foreign organization equivalency determinations and mission-related investing. The panel included John Cochrane, the Council’s Associate Director for Social Innovation, Ruth Madrigal from the US Treasury Department, and Alex Reid from Morgan, Lewis & Brockius LLP.

The Council worked closely with our members, partners in the field, and officials as both the regulations and guidance were finalized.

Public Policy

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Washington Snapshot - November 13, 2015

timothy.huber@cof.org — Fri, 13 Nov 2015 21:17:24 +0000

Washington Snapshot - November 13, 2015 timothy.huber@… Friday, November 13, 2015 - 4:17 pm

Washington Snapshot

Washington Snapshot - November 13, 2015

Friday, November 13, 2015 - 4:17 pm

Don't Miss Out on Community Foundation Week!

Yesterday marked the first day of Community Foundation week! CF week has been celebrated every November 12^th-18^th since 1989 to raise awareness of the critical role of community philanthropy in supporting thriving communities across the country.

In celebration of the important work of community foundations, the Council has created several resources—including a template op-ed, template press-release, and a series of community foundation-focused webpages—to assist you in highlighting the value and impact of your work.

News from the Hill

Update on Tax Extenders

Since Kevin Brady (R-TX-8) assumed the Chairmanship of the Ways and Means committee last week, we have heard him state his intent to take up “tax extenders” with the goal of making “key provisions” permanent.

As our readers will recall, three of the 50-plus “tax extenders” directly impact issues important to philanthropy and charity—1) the IRA charitable rollover, 2) contribution of conservation easements, and 3) donations of food inventory. As of now, all tax extenders are expired because last December’s Congressional action only renewed the provisions for one year, retroactive to January 1, 2014.

We are working closely with Members, Congressional staff and colleagues in the field to reach the best possible outcome on these provisions. We are also seeking two important enhancements:

Expansion of the IRA Charitable Rollover to allow distribution to donor advised funds, and
Simplification of the private foundation excise tax to a single rate.

The Council is tracking the process closely. While Chairman Brady has asserted his preference for making provisions permanent, Senate leaders and the White House prefer temporary extension. As our readers know, last year Congress and the White House agreed on a one-year extension that was retroactive—so only in place for the last couple weeks of 2014. This year, if the provisions are again extended temporarily, we’re pushing for two years (one year retroactive to cover 2015 and one year forward to cover 2016.)

With just over a month left in the Congressional year, the need to take action is growing more important by the day. Be on alert for more information from the Council about how YOU can help to get these provisions across the finish line!

Executive & Regulatory News

Comments Coming Due on IRS Gift Substantiation Proposal

As our readers will recall, the Department of Treasury gave notice in September for a proposed rule that would impact the way charities report information about received contributions to the IRS.

Currently, under § 170(f)(8) of the Internal Revenue Code (IRC), donors who make contributions of $250 or more are required to obtain "substantiation," or proof, of the gift in the form of written acknowledgement from the charity in order to claim a tax deduction. The proposal by the IRS would create a new form—in addition to the required Form 990—that charities could complete in the absence of written acknowledgment for a donor’s gift.

Comments for this proposed rule will be accepted until December 16^th. The Council is soliciting input from our members to inform our submission. Click here for more information about submitting comments.

News from Around the Globe

FATF Seeks Comments from Nonprofits

Additionally, we have just learned that FATF is seeking to update its Interpretive Note to FATF Recommendation 8, which sets standards for how countries can implement counterterrorism regulations that apply to nonprofits. Domestic laws inspired by Recommendation 8 can be overly restrictive and deter grantmaking from foreign funders, and this is a great opportunity to revisit the standards that lead to these laws.

Trending in Legal Affairs

SCOTUS Will Not Hear Challenge to California Donor Disclosure Case

Back in May, the Ninth Circuit Court of Appeals upheld a California regulation that requires charities registered to solicit contributions in California to file an unredacted copy of the IRS Form 990 Schedule B—which lists donor names and identifying information—in the Center for Competitive Politics v. Harris case.

The decision was important for charities in other states because it set a precedent that might encourage attorneys general in other states to begin requiring charities to provide more information on donors.

The Center for Competitive Politics appealed the decision to the Supreme Court of the United States (SCOTUS) on the grounds that the filing requirement violated the First Amendment. On Monday, the SCOTUS denied the appeal to hear the case—rendering the decision by the Ninth Circuit final.

Honoring Veterans with Honor Flights

The Legal team at the Council received an inquiry from a community foundation about establishing a fund to support veterans. Specifically, the group of donors interested in establishing the fund wanted the grant monies to go toward providing “honor flights”—flights that transport veterans from their community to Washington D.C. to visit the memorials associated with their service at no cost to the veterans—for veterans in their community.

There is a national nonprofit, Honor Flights Network, that does this work. But, this particular inquiry specified that the fund would not be associated with that organization. The community foundation wondered whether it could make grants from its fund to pay airlines, directly, for the veterans’ transportation costs associated with their honor flights.

Community foundations are permitted—with approval by the board—to establish a fund with a designated charitable purpose, even if there is no benefitting charity for that fund (so long as the charitable purpose is not for a donor advised fund). The foundation may pay vendors directly from that fund, including airlines, as long as there were appropriate selection criteria in place for determining who may receive the benefit (i.e. veterans in the community).

The Legal team advised in order for the foundation to lawfully administer a charitable project like this, it would need to require the veterans to complete a grant application for the purpose of an honor flight in compliance with the rules for making grants to individuals. The legal team also advised that, since this would be considered a charitable activity of and by the foundation, the foundation’s staff should be primarily involved in the administration of the program.

For more information on this or any other tricky legal matters, please contact the Council’s Legal Affairs team at legal@cof.org.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

2015 Election Results and Nonprofits

Election Day 2015 gave voters the opportunity to weigh in on several issues of importance to the work of nonprofits in their communities. Here is a brief roundup:

Payments in Lieu of Taxes (PILOTs): The election of Jim Kenney as the next Mayor of Philadelphia is sure to renew the effort by city officials to extract large payments from nonprofit missions to fund new spending initiatives and satisfy campaign promises. Current Mayor Nutter, who is retiring after eight years in office, had resisted calls to demand payments in lieu of taxes from large nonprofit institutions to fund city services and pay raises for government employees. Mayor-Elect Kenney has vowed not to raise property taxes to pay for spending proposals, pointing to nonprofits as his preferred revenue source.
Taxpayer Bill of Rights (TABOR): Several ballot measures on Election Day relate to the budget mechanism known as the taxpayer bill of rights measure that restricts government spending based on an arbitrary formula. Voters in Colorado had to expressly instruct the Legislature to retain $66 million in marijuana sales tax receipts because the state revenues grew faster than the rate of inflation and population growth. If Coloradans had not agreed to Proposition BB, the TABOR provision in the state’s constitution would have required that the marijuana tax revenues be returned to the citizens, estimated at eight dollars per person. Washington State voters approved a similar budget technique, known as Initiative 1366, which will lower the state sales tax by one percent, from 6.5% to 5.5%, unless the Legislature refers for voter consideration a constitutional amendment that imposes a two-thirds super-majority requirement for laws or other ballot measures that would raise taxes. The initiative was strongly opposed by numerous nonprofits — including AARP, the Children's Alliance, League of Women Voters, and NAMI – because it puts artificial restraints on the ability of governments to address immediate needs.
Campaign Finance Reforms: Voters in Maine and Washington State approved campaign finance measures that were strongly touted by nonprofits dedicated to good government. Mainers passed a Clean Elections Initiative establishing a public funding system for election campaigns, a proposal that is actively supported by the League of Women Voters and numerous other groups. Seattle voters approved a unique public campaign financing initiative known as Honest Elections. Registered voters will now receive four so-called “democracy vouchers,” worth $25 each, which they can give to candidates for mayor, city council and city attorney who have agreed to abide to an overall fundraising cap. The vouchers will be funded through a property tax increase.

Philanthropy News and Op-Eds

Philanthropy Plays Important Role with Continued Public Budget Woes

A recent article in Bloomberg Business highlights the important role that philanthropy is playing in supporting the local economy in Michigan. In particular, the article draws attention to challenges such as the lead-contaminated water system in Flint and public employee pension issues in Detroit, and how foundations such as the Charles Stewart Mott Foundation have stepped up to the plate to provide significant support.

“Government gridlock has left many communities looking for solutions to some of the big challenges they face,” states Council President and CEO Vikki Spruill in the article. “The limitations of political leaders to address the pressing needs of communities have increased pressure on foundations to assume roles that government has historically taken.”

Importantly, this article highlights the continued contributions and vitally important role of philanthropy in supporting and strengthening communities across the country following the recession.

NPT Annual Report Outlines DAF Growth

Tuesday, the National Philanthropic Trust released its Annual Report on DAFs. The report is based on data from more than a thousand national charities, community foundations, and single-issue charities. The NonProfit Times broke down the key findings:

Grants made through DAFs hit $12.49 billion (a 27% increase from 2013)
DAFs accounted for 7.6% of individual giving and 5.5% of gifts to charities in 2014
Total contributions to DAFs hit $19.66 billion (a 14.1% increase from 2013)
Charitable assets held in DAFs reached $70.7 billion
The average account size is $296,701 (a 13.7% increase from 2013)

The Wall Street Journal reported that “stock-market gains last year helped fuel the growth of donor-advised funds for charitable giving.”

To see stats specific to community foundations, click here, or to read the full report, click here.

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