Senate Passes Budget Resolution
On Tuesday, the Senate passed the first House-Senate Budget Resolution in six years, which passed the House last week. This is significant because it lays out Congress' agreed-upon policy and spending priorities for the coming year, in every program area and agency of the government.
The Budget, approved in a party-line vote by the GOP-led chamber, calls for cutting $496 billion in non-defense spending over the next decade. Notably, the Resolution also includes a “reserve fund” that would allow the Senate Budget Committee Chairman to revise spending levels to allow for funds for comprehensive tax reform, and for passing the “tax extenders” such as the IRA charitable rollover.
The Budget Resolution is non-binding, and is used as a means for Congress to signal its priorities this year and beyond. However, the Resolution passage now permits Congress to use the reconciliation process for certain bills that result from it, which could allow bills to pass the House and Senate with a simple majority vote. Republicans have expressed interest in using this tool to pass a repeal of the Affordable Care Act, for instance.
Republicans praised the Resolution as a critical step towards deficit reduction and a balanced budget, while Democrats expressed concerns over some of the program cuts, such as Pell Grants, food stamps, and nutritional assistance for mothers.
Next, Congress must pass funding bills and the White House must sign, bills to fund government agencies and programs next year.
The Council’s policy team will follow the progress of next year’s spending bills in Congress, and report back on what you need to know.
Act Now on the America Gives More Act
As we have reported to you, Senators Schumer (D-NY) and Collins (R-ME) introduced The Public Good IRA Rollover Act of 2015 (S.1159) last week. Senators Leahy (D-VT), Casey (D-PA), McCain (R-AZ), Stabenow (D-MI), and Cochran (R-MS) have also introduced the Good Samaritan Hunger Relief Tax Incentive Extension Act of 2015 (S.930). This bill would permanently extend and expand the charitable deduction for contributions of food inventory. Provisions on both of these important issues are included in the America Gives More Act and the Council supports the introduction of these bills.
We need you — foundation leaders on the ground in your communities — to reach out to your Senators today and encourage them to support community investments now. As a constituent, your voice is invaluable!
You can send an email to your Senators to urge the Senate Finance Committee to take up the America Gives More Act (H.R. 644) today so that it can go to the Senate floor for a vote as soon as possible!
Or, Tweet about the America Gives More Act using the hashtag #Act4Good. Our colleagues at the National Council of Nonprofits have created several sample tweets you can send your Senators:
Find your Senators' Twitter handles and tweet one of the following @ them (along with a photo):
@_____ Vote Yes on #HR644 the America Gives More Act; #Act4Good and help the people in need in our communities
@_____ #Act4Good and [insert a few words about who you serve]; pass #HR644 today!
@_____ #Act4Good by supporting the work of nonprofits; support the America Gives More Act #HR644
@_____ Help our communities and the nonprofits that serve them: pass the America Gives More Act #Act4Good #HR644
@_____ Communities served by #nonprofits deserve better; #Act4Good and pass the America Gives More Act #HR644
@_____ No Excuses for delaying passage of the America Gives More Act, #HR644 #Act4Good
California now Requires Disclosure of "Significant Donor" Information
On May 1, 2015, the Ninth Circuit Court of Appeals, in Center for Competitive Politics v. Harris, upheld a California regulation that requires charities registered to solicit contributions in California to file an unredacted copy of IRS Form 990 Schedule B. Currently, Schedule B of the Form 990 is required to be filed with the IRS but is not subject to public disclosure. Schedule B requires a listing of certain donors and donation amounts.
This decision may be important for charities in other states because it may encourage other state attorneys general to begin requiring charitable organizations to provide more donor information with state charitable solicitation registrations. California joins the list of other states that now require charitable organizations to file an unredacted Form 990 Schedule B including Hawaii, Kentucky, Mississippi, and New York.
Prior to this ruling, many charities had successfully submitted redacted copies of their Form 990 Schedule B with their California registration, but recently, the California Attorney General began requiring charities to submit unredacted copies with information about "significant donors." The AG reasoned that having access to this donor information was necessary to help the state assess whether a charity is conducting charitable activities or instead conducting fraudulent activities.
For more information on this or any other tricky legal matters, please contact the Council’s Legal Affairs team at firstname.lastname@example.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.
Philanthropy Can't Replace Government Money
This week, a piece in The Chicago Tribune took an insightful look at the effect of state budget cuts on the foundations and nonprofits in Chicago. The moral of the story – philanthropy cannot replace state money. This is a position that the Council and our colleagues in the Charitable Giving Coalition have advocated for some time.
The article highlights examples of nonprofits that have faced cuts and had significant contributions from donors, but are still trying to fill the gap with more cuts expected. Sara Slaughter, at the Robert R. McCormick Foundation described how they must be more selective with their grantmaking: “We’re in a climate where the philanthropic community is needing to be extremely strategic and extremely thoughtful… How we are focusing our response is to recognize that there’s no way we can fill the huge hole.”
Maria Whelan, president and CEO of Illinois Act for Children, said it succinctly, “The philanthropic community doesn’t have the financial capacity to be the social safety net.”
My Brother's Keeper Moves from White House to 501(c)(3)
The White House announced this week that My Brother’s Keeper Alliance, a new nonprofit that is an offshoot of the White House program on this issue, would be launched in New York City. As our readers know well, the My Brother’s Keeper Initiative has been a public-private partnership among the government, funders, and nonprofits to help disadvantaged young men of color. This issue “will remain a mission for me and for Michelle not just for the rest of my presidency but for the rest of my life,” the President said.
The Alliance will have a broad focus, working to help young men of color with anything from preschool to job training. It will be led by former Deloitte CEO Joe Echevarria, who co-chaired the White House My Brother’s Keeper Initiative. Numerous donations totaling $85 million have already been reported, such as contributions from PepsiCo, American Express, and BET. The Alliance Board reportedly includes high-profile men of color such as singer John Legend, Shaquille O’Neal, and Senator Cory Booker (D-NJ).
Nonprofit Quarterly’s Rick Cohen raised concerns that the Alliance could have fundraising issues like those that have recently plagued the Clinton Foundation. The White House has attempted to address these concerns head on, stating that the President will play “no role” in fundraising.
We will follow the progress of the Alliance as it establishes its footing as a funder of issues affecting disadvantaged young men of color.
More News on the Charitable Deduction Fight in Vermont
The Vermont State Senate passed a budget bill and several tax bills last Friday. As we reported to you several weeks ago, the Senate was considering a proposal that would replace the charitable deduction with a tax credit. In an encouraging move, the passed bill does not include this change, nor does it impose a cap on charitable deductions. It does, however, make an interesting and problematic distinction that requires deductible contributions to be made in and for Vermonters.
National Council of Nonprofits explains that “Vermont would no longer permit tax deductions for donations to international efforts, even relief related to the Nepal earthquake.” The bill must now be conferenced with the House version.
We’ll continue to keep you updated on developments.
Council Helps Coordinate Philanthropy's Response to Nepal Disaster
Following the recent disaster in Nepal, the Council has partnered with the Center for Disaster Philanthropy to support foundations responding to the earthquake. On Friday May 1st, the Council and CDP co-hosted a webinar, “Nepal Earthquake: How Can Donors Help,” to discuss the current needs and philanthropic response to the disaster. In the last two weeks, more than 30 Council members have responded to the disaster in different ways and we have a peer conversation for members taking place on the Council’s Philanthropy Exchange.
The Council will continue to track and support philanthropy’s response to the earthquake and the changing needs on the ground as disaster response moves from relief to reconstruction and longer-term development.