In This Week's Edition of Snapshot...
- CHARITY Act Reintroduced in the Senate
- No Budget Deal So Far
- Deal on Disaster Aid Funding Reached
- States Enacting, Extending Giving Incentives
- New Jersey Donor Disclosure Bucks Federal Requirements
Last week, Senators John Thune (R-SD) and Bob Casey (D-PA), with Pat Roberts (R-KS) and Ron Wyden (D-OR), all members of the Senate Finance Committee, reintroduced the Charities Helping Americans Regularly Throughout the Year (CHARITY) Act (S. 1475). This bill would encourage charitable giving and make it easier for foundations and other tax-exempt organizations to conduct their charitable mission.
Additionally, the bill would expand the IRA charitable rollover to allow for distributions to donor advised funds (DAFs) as well as simplifying the private foundation excise tax from the current two-tiered structure to a flat rate of one percent.
Our Government Relations team worked closely with Senators from both side of the aisle to make sure this bill got introduced to Congress. Now we need your voice. Please reach out to your Senators and ask them to co-sponsor the CHARITY Act S. 1475.
On Tuesday, the four Congressional leaders and the President seemed on the right track to reach a possible agreement on spending caps and the debt limit, but no agreement was reached. If no deal is reached by fall, spending limits imposed under a 2011 deficit reduction law would require cutting discretionary spending by about 10 percent, or $125 billion, in the fiscal year that begins October 1. In fiscal 2021, the final year of the automatic reductions —known as a sequester— spending caps would rise only 2 percent above the 2020 lows. Democrats have pressed to attach debt limit legislation to a spending caps deal, but the White House has sought to keep the two issues separate.
Yesterday, the President abruptly ended a planned meeting on infrastructure with Congressional Democratic leadership, alleging that while investigations of him remain open, working with Congress would be impossible. This incident casts doubts in the ability of reaching a budget deal between Congress and the President.
Adding to that doubt and making a budget deal agreement more difficult is the mounting tension between House Speaker Pelosi (D-CA) and President Trump. Senate Leader Mitch McConnell (R-KY) may have to start thinking about a revamp of his strategy to avert another government shutdown.
This afternoon, Congress reached an agreement on a clean disaster aid package. Senate Appropriations Chairman Richard Shelby (R-AL) said that negotiators have reached a deal with President Donald Trump to pass a $19.1 billion “clean” disaster relief package without any emergency funding for humanitarian needs at the border. President Trump’s request for billions in emergency aid to handle humanitarian and security issues at the Southern border was the final hurdle to passing a bill.
The Senate is expected to vote on the agreement Thursday before leaving town for the weeklong Memorial Day recess. Now that many House members have already departed for their districts, the House would have to vote by unanimous consent if the chamber were to clear any disaster aid deal that might materialize before the recess.
Exclusive from our colleagues at the National Council of Nonprofits.
While the value of state giving incentives remains unclear as the Treasury Department finalizes regulations that may limit their deductibility for federal tax purposes, states continue to enact tax incentives to promote targeted charitable activities. A newly enacted law in Maryland provides a 25 percent tax credit for donations to qualifying college endowment funds for specific universities. Mississippi, too, has a new giving incentive, a 50 percent state tax credit for charitable contributions by business enterprises to certain nonprofit child welfare organizations. The Governor of Montana recently signed legislation extending to the end of 2023 the existing tax credits for contributions to a university or college foundation or endowment, educational improvement account, or student scholarship organization. The law also extends through 2027 the tax credits for preservation of historic buildings. Finally, the North Carolina Senate approved a bill on Monday that would make a variety of changes to state tax laws, including the restoration of the deductibility of IRA charitable rollovers. Unders current law, North Carolina donors who use the popular federal tax incentive for charitable giving must pay state taxes on the charitable contributions made from individual retirement accounts. The Senate tax plan would end this state tax on donations to nonprofits through IRAs, simplifying the process for donors and allowing them to contribute more fully to nonprofits from their IRAs.
The New Jersey Division of Consumer Affairs adopted regulations that reiterate a longstanding requirement that organizations submit donor names and addresses to the Division, as part of their annual reporting requirements under the state charitable registration law. The regulations come in the wake of the Internal Revenue Service’s announcement in July 2018 that it would no longer require noncharitable nonprofits – such as social welfare organizations, unions, and trade associations – to submit donor names and addresses as part of Form 990 Schedule B. Under New Jersey's new regulations, any organization required to register and file annual reports to the state under the Charitable Registration and Investigation Act will be required to submit the same information that is normally required on the Schedule B. In response to a concern expressed by the New Jersey Center for Non-Profits, the Division amended its earlier proposal so that organizations that file the Form 990-N e-postcard will not be required to report their donor information under the new regulations. Prior to the announcement of the rule, the Garden State joined New York in filing a lawsuit to compel the federal government to comply with requests under the Freedom of Information Act for information regarding the decision-making process taken by the IRS for the abrupt policy change.