We look forward to seeing many of our readers next week at the 2014 Fall Conference for Community Foundations in Cleveland, Ohio! Below is a small sampling of the many Public Policy and Legal sessions you’ll find on the full conference schedule.
Washington Update: Tax Reform in the Next Congress
Monday, October 20, 2:00-3:15 pm ET
This popular session is back! What's happening on Capitol Hill that could impact community foundations? What is and is not on the radar screen in Washington and how will the midterm elections influence the remainder of the year? Will Congress ever renew the tax extenders including the IRA charitable rollover? Will anything come of the America Gives More Act? Come hear how the decisions being made in the nation's capital affect the work you do in your community and what you can do about it.
Momentum is building for a major overhaul of our tax code, and it is imperative for philanthropic organizations to weigh in on the conversation. In February, House Ways and Means Committee Chairman Dave Camp (R-MI-4) released a tax reform discussion draft, with many proposed changes that would have a direct bearing on individuals' giving incentives as well as the way in which tax-exempt organizations go about their work. Among those proposals is a mandatory 5-year payout of donor advised funds. Come discuss the steps the Council is taking to ensure that this troubling provision doesn't become law, what we could do differently, and how you can help. And, hear from our panel of D.C. insiders as they dive into what the environment for tax reform in the lame duck session of Congress and beyond.
How Can We Communicate the Value of DAFs?
Monday October 20, 4:15-5:15 pm ET
The future of Donor Advised Funds (DAFs) may be in jeopardy, due to a proposed tax bill.
DAFs are a unique investment tool for communities across the country, yet DAFs are misunderstood. The recent Urban Institute Donor Advised Fund Survey demonstrates the value of DAFs on a number of levels. As the survey results clearly show, DAFs can enhance a community foundation’s discretionary grant making and facilitate a donor’s engagement with his or her community. Yet, the future of DAFs depends largely on how we communicate their value.
This session will discuss how we individually and collectively communicate the value of DAFs in our communities. We will discuss how our communications and donor services teams can work together to collect and share these important stories. Together, we can convey how community foundations facilitate local solutions to the causes and issues that matter most.
Creating Synergies and Capacity through Public Partnerships
Tuesday, October 21, 4:15-5:15 pm ET
Community foundations can help communities achieve more equitable use of federal investments and do transformative work simultaneously. This session presents two cases of how community foundations are working in close concert with federal agencies to leverage mission-related strategies.
The New Mexico Community Foundation and the Federal Emergency Management Agency (FEMA) will share how they have worked together to create a disaster recovery fund and a unique partnership with the Santa Clara Pueblo's tribal leaders to secure federal restoration funds after devastating fires and floods have destabilized the Santa Clara Canyon, the Pueblo's ancestral homeland. Presenters will discuss how public funds and diverse private funds can be braided to support different aspects of recovery. Catastrophic disasters impact everything and it really takes a village to rebuild.
The Chicago Community Trust and The Greater Kansas City Community Foundation will share how they are able to bring expanded use of the internet to low-income neighborhoods and vulnerable populations by capitalizing on the federal government's 4.7 billion Broadband Technology Opportunities Program (BTOP). In 2009, BTOP began to expand the nation's broadband infrastructure by funding 200 projects across the country including 123 infrastructure projects, 66 public computing centers, and 44 Broadband adoption programs for underserved populations. Learn about Chicago's Smart Communities strategies, Kansas City's neighborhood-by-neighborhood approach, and how BTOP support for data collection and evaluation helped focus and document the impact of these projects.
Merging Community Foundations, Legal Practice and Pitfalls (CLE Credit Available)
Wednesday, October 21, 10:00-11:00 am ET
Collaborative strategies are a powerful way for community foundations to accelerate their impact. As community foundations consider what's next for community philanthropy, some are thinking about merging staff, offices, and resources. Leading experts in collaboration and strategic restructuring will explain the different types of partnerships and provide the information you need to advance this conversation in your community. Justin Aiken, Counsel at the Council on Foundations, will act as a moderator for the session and lead the discussion from a corporate business perspective with an eye toward the impact on the nonprofit sector.
To begin the session, Venroy July, Associate at International law firm Hogan Lovells, will discuss mergers from a legal perspective. Mr. July focuses his practice on mergers and acquisitions among other corporate governance issues. Having led several large companies through mergers and debt offerings, Mr. July can speak to the legal ramifications and hurdles that must be addressed during the process. Mr. July can also explain the common pitfalls and matters that present themselves during a merger.
To follow up on the particular legal issues, Jenny Parks, President & CEO of the New Mexico Community Foundation, will share her experience as she leads the foundation through its own merger and speak to the practical effects of the legal considerations. This will offer an interesting mix of black letter law, with practical application that will give the attendees an all-encompassing view of mergers. Ms. Parks can speak to some issues that may be particularly interesting for community foundations to consider when going through a merger. As a former community foundation staffer, Council on Foundations attorney Lara Kalwinski will also be on hand to help explain the legal requirements from a Federal tax standpoint.
While your lawmakers are home in October to ask for votes, make sure you ask them to pass the America Gives More Act provisions into permanent law during the lame duck!
Even though Congress has adjourned, we must keep up the momentum on the America Gives More Act (H.R. 4719). Over the past few weeks, countless foundations and charities from across the country have told their lawmakers how important the America Gives More Act provisions are for the charitable sector. We have to keep that drumbeat going.
When Congress comes back in November, they will only have about three work weeks remaining in the year, and we need to push for a floor vote during that time.
The Council’s advocacy toolkit has everything you need to make your voice heard. We’ll be revising it for fall advocacy activity, so look for new materials coming soon. In addition, our colleagues at the National Council of Nonprofits have created a very useful website with details on H.R. 4719 and ways you can speak out.
And, keep sharing your outreach successes with us. This week, the San Diego Community Foundation shared with us a piece featured prominently in the San Diego Union-Tribune.
In his op-ed, Manager for Civic Leadership Fund and Charitable Giving Ryan Girard urges his senators to lead the charge on H.R. 4719: “We hope California Senators Dianne Feinstein and Barbara Boxer will follow the lead of local House representatives to help our local community foundations expand nonprofit capacity by encouraging their colleagues to put this to a vote before they miss yet another opportunity to simplify our complex and bloated tax code and advance the social good.”
For more than 20 years, the Council has played a key role in working to reduce barriers to cross-border philanthropy. We are committed to working with grantmakers, the Federal government and multilateral institutions, think tanks, global philanthropic networks, and other partners to facilitate a favorable regulatory environment for foundations doing work overseas.
One of these partners, the Charity & Security Network—a leading expert in this space—has made us aware of two regulatory processes commencing this fall with significant implications for cross-border grantmaking. The two proceedings will be conducted by the Financial Action Task Force (FATF), an obscure but powerful intergovernmental group that sets international anti-terrorist financing and money laundering standards. Grantmaker participation in these processes will be essential to ensure a favorable legal environment for the work of foundations and their grantees abroad.
First, FATF will conduct an evaluation of U.S. compliance with its standards, including a review of anti-terrorism regulations for nonprofits. Over the past two years, the Charity & Security Network has been working with an international coalition of nonprofits that has succeeded in getting FATF to adopt language that calls on governments to respect human rights and humanitarian standards in nonprofit regulations, and to ensure that its rules protect legitimate nonprofits and are proportional and flexible. It is up to our sector to make sure the review of U.S. regulations addresses these standards.
Second, the “Best Practices Paper” on anti-terrorist financing regulations for nonprofits, which is outdated and problematic, is being revised. FATF has expressed its openness to input from the nonprofit sector in the revision process.
On Tuesday, October 21 from 12:00-2:30 PM ET, the Charity & Security Network will hold a roundtable at the Open Society Foundation in D.C. with expert speakers from an international nonprofit working group on FAFT. The speakers will provide background, and attendees will have an opportunity to discuss how our sector can best provide input into the proceedings to get the best possible outcome.
The Council will attend the meeting, along with our outside legal experts who’ve participated in our work for several years.
The first hour will be available by conference call (the background presentations and Q&A). If you are interested in participating contact Kay Guinane, Director, Charity & Security Network, at firstname.lastname@example.org.
Closely-Held Stock Gifts to DAFs
Questions on gifts of stock to DAFs? Our Legal Affairs team can help! We’ve compiled a list of red flags and issues to look out for when accepting gifts of closely-held stocks:
- Excess Business Holdings. Be aware of the excess business holdings rule, which applies to donor advised funds. Generally, a DAF, its donor and related parties cannot hold more than 20% of the stock in a business. If you receive a gift of stock that puts you over the limit, you have 5 years to sell enough to get you under the limit.
- Appraisal Timing. The IRS will not accept an appraisal that is dated more than 60 days before the gift is made. The appraisal also has to be done in time for the donor to complete IRS Form 8283 for non-cash gifts. The appraisal is the responsibility of the donor and the foundation should not be deciding the value of the stock. If you sell the stock within 3 years, you will have to file IRS form 8282.
- Shareholder Agreements. Watch out for stock that comes subject to shareholder agreement that limits your ability to sell the stock. Many closely held companies have agreements where any stock must be offered for sale to the other shareholders first, and may even pre-determine the sale price. Limitations like this might lower the value of the stock by making it more difficult to sell.
- Stock Income. If the donor intends for the foundation to hold the stock, understand how it will generate income to allow grants to be made from the DAF (and also to pay your fees). If the stock does not generate any income through dividends, etc., there may be no money available to make grants or pay fees.
We remind all Council members that the Legal Affairs team is an important resource that may help with both the day-to-day and the big, confounding issues that come your way. In future issues of Washington Snapshot, we’ll continue to cover legal questions that are trending among our members. In the meantime, don’t hesitate to reach out to us at email@example.com.
Election 2014 - How Beltway Politics Shape the Legislative Outlook
Join us on Friday, November 7 from 1:00-2:00 pm ET for a webinar as we get a run-down off everything that happened on Election Day 2014 from National Journal’s Political Editor, Josh Kraushaar. Josh will cover the most closely watched congressional elections in districts around the country, and offer his expert analysis of the outcomes of the races you care about.
Will the election outcome effect tax reform prospects for 2015? What about the fate of charitable tax extenders like the IRA rollover? Does new Ways and Means Committee leadership change Congress’s tax-writing priorities? Ken Kies of the Federal Policy Group and Rob Leonard of Akin Gump Strauss Hauer & Feld, will address these questions and more, and will comment on how the midterm election results will impact what happens (or doesn’t happen) in Washington for the next two years.
What's New with National Standards
Join us on Wednesday, November 12 from 3:00-4:00 pm ET for a webinar update on the National Standards program. This program will highlight the value of National Standards to your community foundation, and discuss the program revisions that go into effect in January 2015.
Community foundations voluntarily self-regulate their operations through the National Standards for U.S. Community Foundations™. Two thirds of the community foundation field participate in the program. Every five years, the community foundation field selects representatives to review the National Standards. 2015 marks the tenth anniversary of the first community foundations receiving their accreditation; therefore the National Standards Action Team, the Community Foundation National Standards Board, and the Council on Foundations took this moment to reflect on ensuring the National Standards reflect effective and legal practices of the field as well as provide a streamlined submission process.