This week’s activity on the CHARITY Act showed us that the National Standards for U.S. Community Foundations® continues to provide value for community foundations. The National Standards program was recognized in drafting the act’s legislation for the IRA Charitable Rollover. Senate staff stated specifically that the National Standards grant activity policy was how foundations should ensure their funds are making grants at least every three years. The Council on Foundations’ legal team helped advise tax-writing staff on ways to put forth the least onerous requirements for DAFs to accept tax-free IRA contributions, which resulted in the introduction of the CHARITY Act of 2017. Stay tuned to see if this legislation becomes part of tax reform!
In other National Standards news, this past April, the Southern Poverty Law Center (SPLC) contacted me about grantmaking due diligence. I explained our process and stated that a recognized 501(c)(3) organization doesn’t often require additional due diligence for grantmaking. I also explained that while community foundations are not required to, they may adopt a due diligence procedure, which can include being checked out by third parties such as Charity Navigator, GuideStar, or Southern Poverty Law Center.
GuideStar now posts a list of hate groups on its website, and National Standards will include information about the third party checks that are allowed but not required. The SPLC contact explained to me that they’d like to make the SPLC 501(c)(3) hate list available to foundations because they’d been called a lot since the LA Times article (among others) came out about community foundations making donor advised fund grants to groups on the 501(c)(3) hate list. We had a collegial conversation, and the National Standards Board is thinking about next steps for considering legal versus business or reputation decisions.
In June, I received information that some IRA Charitable Rollover donors received a tax change letter requesting the total amount of their distribution be taken as income. As far as I know, it is well established in law that this is not the case with a charitable distribution. I contacted numerous individuals at Treasury and the IRS until I found the right person. After contacting that person, they are now working to determine the cause of these letters being sent out. If your donors received or receive one going forward, please send them to me at email@example.com. I need examples in order to work backwards from the problem.
National Standards is currently in the middle of its technology transition from Wizehive to Armature, with expected completion late this summer. I, as well as the National Standards administrator, Christina Gonzalez, have been fielding hundreds of calls and emails regarding the application process and status of individual submissions. Please know the transition and communications plan is on track, and we’ve engaged temporary staff to facilitate the transfer of data files. Peer and legal reviewers were recently at my office for training and reviews, and the National Standards team continues to add new reviewers to its roster. With the completion of the technology transition, the new Armature platform is expected to greatly improve the submissions process.
If you want to learn more, or apply to be a reviewer, please contact National Standards staff at firstname.lastname@example.org.
About the Author
Lara Kalwsinki is the Executive Director of National Standards for U.S. Community Foundations®. Lara graduated from Indiana University with a JD/MPA and has experience working for nonprofit organizations in India, Germany, Mexico, Liberia, and Ghana. Lara is a product of a community foundation. She received a four-year Lilly Endowment Community Scholarship from Legacy Foundation and is a recipient of the Indiana Governor's Award for Tomorrow's Leaders.