Congress is back in D.C.!
However, they only have three work weeks remaining in the year, so now is the time to speak out on the America Gives More Act (H.R. 4719).
The America Gives More Act is the most significant bill for the charitable sector in years. The bill has already passed the House and the Senate has signaled strong support for several of its provisions. This means we have a genuine opportunity to get lawmakers to include the bill in the tax extenders package expected to be enacted before the end of the year.
While there is a good chance of the provisions in the Act being passed, political insiders are speculating that Congress will look to extend them for 2 years instead of making them permanent. As our readers will recall, the Senate Finance Committee’s EXPIRE Act (S. 2260) extended the tax extenders—including the IRA rollover and the other charitable provisions—for 2 just years. And, the Senate bill does not include the private foundation excise tax simplification or extension of the giving deadline to April 15.
We want these provisions to become permanent law to create certainty for donors and foundations alike—it’s critical that foundations urge their lawmakers to include the permanent charitable provisions in the America Gives More Act in any tax extenders package they consider during the last few weeks of the year!
Join Your Colleagues in the Field in Speaking Out
Taking action can be as simple as sending an e-mail to your lawmakers asking for their support for the bill. The Council has created a short handout on the Act, along with sample e-mail language to send to your lawmakers:
Dear [Representative or Senator last name]:
I strongly urge you to support the charitable tax provisions in the America Gives More Act (H.R. 4719) and to ensure that this bill is included in any year-end tax legislation.
The America Gives More Act (H.R. 4719), passed by the House in July, includes several tax provisions that are critically important to foundations and nonprofits. In the past, Congress has extended certain giving incentives on an annual basis each year, creating tremendous uncertainty for nonprofits and donors. These giving incentives are popular and proven effective, and should be made permanent law.
The IRA charitable rollover encourages individuals to donate retirement account assets directly to a public charity without incurring a tax liability on the donation. Rollover donations help countless public charities to fulfill their charitable purposes in your communities.
The enhanced deduction for donations of food inventory allows individuals or businesses to receive an increased tax deduction when they donate food to charities that serve those who are most in need.
The enhanced deduction for land conservation easement donations helps landowners afford to choose conservation over development of some of our country’s richest and most scenic land.
The America Gives More Act also simplifies the private foundation excise tax to a single rate. This measure will lift an administrative burden that creates a perverse incentive for private foundations to give less, not more, in times of need.
On behalf of the [foundation name], I urge you to voice your support for the America Gives More Act. Your community depends upon it.
[name and position]
For general questions on advocacy, contact Policy Analyst Katherine LaBeau.
Lame Duck Priorities
As the post-election frenzy dies down, Congress has returned to the Hill this week to begin tackling a handful of legislative issues that must be dealt with before they adjourn for the year around December 12th.
Before they can depart for the holidays, Congress must pass a government funding bill, must consider supplemental funding for the Ebola outbreak and the campaign against ISIS, vote yes or no on judicial and political nominees, extend the Terrorism Risk Insurance Act, and most significantly for foundations—pass a tax extenders package.
All in all, a very busy lame duck session that may set the precedent for how the Republican majority will work with Democrats in the next Congress.
While the 113th Congress returns to session for the last time this week, there is still one race that is undecided for the 114th Congress—Louisiana—which will hold a runoff election in December to determine the winner. Just this week, Alaska declared that Republican Dan Sullivan beat Democratic incumbent Mark Begich for his Senate seat, bringing the Republican Senate majority to 53.
Also this week, both the House and Senate voted on new party leadership. Most of the candidates ran unopposed, and no major surprises occurred. In the Senate, Minority Leader Mitch McConnell (R-KY) switched roles with current Majority Leader Harry Reid (D-NV) for the upcoming Congress. The New York Times reports that Senate Democrats expressed frustration with Senator Reid’s leadership before voting, and the vote to elect him as their continued leader was not unanimous.
Meanwhile in the House, Republicans re-nominated current Speaker John Boehner (R-OH-8) and current Majority Leader Kevin McCarthy (R-CA-23). House Minority Leader Nancy Pelosi (D-CA-12) is also expected to remain in her position when the Democrats vote next Tuesday.
Democrats stand to lose Committee seats in both the House and the Senate, though the final numbers have not yet been decided. While nothing has been made official yet, Senator Orrin Hatch (R-UT) will likely become Senate Finance Committee Chair, while Representative Paul Ryan (R-WI-1) is the likely contender for House Ways and Means Chair.
We will be following the lame duck activity closely, and will keep you up to speed on all of the latest developments in congressional and committee leadership and the America Gives More Act and tax extenders.
Time to Educate New Lawmakers
In a post-election Nonprofit Quarterly piece, Rick Cohen advises charities and foundations to quickly begin educating the new members of Congress about the charitable sector, particularly in their districts.
“A review of the nonprofit backgrounds and credentials of the incoming class of Republican senators and representatives suggests that the nonprofit sector will face one big task of education about the functions, needs, and challenges of public charities and private foundations,” Cohen states. He continues, “[t]he messaging and education will require moving these new Republican legislators out of their comfort zones to grapple with the diversity of nonprofits and the communities they represent around the nation.”
For resources on how to contact and engage with your new lawmakers, please contact the Council!
Making DAF Grants to Foreign Organizations
Recently, the Council’s Legal Affairs team has fielded more questions on whether American public charities can make grants to foreign organizations. We often get the question, “can DAFs housed at community foundations legally make grants to foreign charities?”
The simple answer is that community foundations can make grants from DAFs to foreign charities. However, private foundations that make grants abroad are required to follow specific rules under the Pension Protection Act of 2006 (PPA). The PPA also requires that international grants from DAFs comply with IRC Section 4945(h) of the private foundation rules.
Section 4945(h) requires a private foundation to make reasonable efforts to ensure that a grant to a foreign charity is spent for its intended purposes and not diverted to non-charitable ends. Additionally, the foundation must report information about the grant to the IRS. However, these foreign charities are not likely to be registered with the IRS.
In order to ensure the integrity of the grant to a foreign charity, the IRS gives private foundations two choices: (1) review the potential grantee to see if the grantee is the foreign equivalent of a U.S. public charity, otherwise known as an equivalency determination; or (2) exercise expenditure responsibility.
Because foundations may choose between the two, the Council advises foundations to become knowledgeable about both options, and to consider the factors and circumstances relating to their particular situation.
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.
Thank you to those of us who joined our election recap webinar last Friday. If you missed it, a recording is available on our website. Here are 4 key takeaways our panelists noted:
- Speaker Boehner may have more flexibility to pass legislation now. National Journal’s Josh Kraushaar pointed out that with a greatly expanded majority, Speaker John Boehner could lose as many as 32 votes from his party’s right flank and still pass a bill without Democratic support.
- Republicans gained more gubernatorial seats than anticipated and have more state legislator seats since 1928. Big wins at the state level saw the GOP takeover eleven state houses around the country.
- Democrats searching for “why?” Many lay blame on President Obama’s sagging approval numbers, but others in the Democratic ranks are beginning to question the leadership of Senator Harry Reid (D-NV).
- The polls got it wrong. While most agreed going in to election night that Republican wins were likely, the polling averages did suggest the night would be so good for them. Among the notable, Senator Mark Warner (D-VA) was expected to cruise to victory, but ended up winning by less than half a percent.
Council's Veterans Philanthropy Work Highlighted
Many of our readers are already familiar with the Council’s strategic work with veterans philanthropy—bringing together government leaders and foundations to combine resources on this critical area of need.
On Veteran’s Day, the Council’s work was highlighted in an Inside Philanthropy blog post. Author Kiersten Marek described the Council as “making itself a nexus of conversations about veterans philanthropy.” Marek covers the launch of the Council’s Veterans Philanthropy Exchange, an online platform where funders concerned with veteran’s issues can unite to share best practices and learn from one another.
Council President and CEO Vikki Spruill is quoted in the piece discussing the crux of the Council’s role in veterans philanthropy: "The Council is really uniquely positioned to bring our members together around issues of concern to them and to find ways to network and share and magnify their individual efforts,” Spruill said.
Marek concludes her discussion of the Council’s work in this arena with a positive note. “Doing right by these Americans is among philanthropy's bigger projects right now, and one of its most complicated, involving collaboration with a range of public and private partners. Under Spruill, the Council has put itself right at the center of that action,” Marek states.
Council Teleconference: Workforce Development through Pay for Success
Pay for Success is a public-private partnership approach that harnesses private sector investments to scale up proven social programs, with payments made by government if, and only if, outcomes are met or exceeded.
This summer, bills were introduced on Pay for Success in both the House and the Senate. Meanwhile, Pay for Success deals underway in New York City, Massachusetts, and New York State employ workforce development strategies to attempt to improve the outcomes for vulnerable populations, and many state and local governments are thinking about how to finance workforce-skills training through Pay for Success transactions.
Join the Council in a teleconference on Friday, November 21 from 3:00-3:45 pm ET to learn more about Pay for Success and how this approach might be able to advance your foundation’s workforce development goals, upcoming regional summits on the topic, and $2 billion in new Workforce Innovation and Opportunity Act funds to advance Pay for Success.
Speakers include: Jenny Harms, Network Manager, Council on Foundations; David Wilkinson, Senior Policy Advisor, White House Office of Social Innovation and Civic Participation; Brian Paulson, Co-Chair, Workforce Matters Funders Network; Jeff Shumway, Vice President of Advisory Services, Social Finance; and Lee Foley, Managing Partner, Capitol Hill Partners.
To RSVP or for more information, e-mail firstname.lastname@example.org by November 19?th.