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 4th.
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.
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.
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 28th 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.email@example.com 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 16th.
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.
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.
Community Foundation Week Highlights
Hundreds of US community foundations spent November 12-18 celebrating the 26th 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.