Friday, October 21, 2011

The latest newsletter is available below or with full articles online.

Washington Roundup

 Here is an update from Capitol Hill:

Finance Committee Hearing
The Senate Finance Committee held a hearing on Tuesday entitled “Tax Reform Options: Incentives for Charitable Giving.”  The committee heard testimony from Frank Sammartino of the Congressional Budget Office (CBO); Dr. Eugene Steuerle of the Urban Institute and Urban-Brookings Tax Policy Center; Elder Dallin H. Oaks of the Church of Jesus Christ of Latter-Day Saints; Brian Gallagher, CEO of the United Way; and Roger Colinvaux of Catholic University.

Chairman Max Baucus (D-MT), Ranking Member Orrin Hatch (R-UT), Benjamin Cardin (D-MD), Thomas Carper (D-DE), Tom Coburn (R-OK), Mike Crapo (R-ID), Charles Grassley (R-IA), and John Thune (R-SD) attended.  During his opening statement, Committee Chairman Baucus noted that nonprofits employ nearly 10% of the nation’s workforce, but added that the charitable deduction needed to be examined to ensure that it was fair and effective given how few taxpayers itemize their deductions.  Ranking Member Hatch stressed his strong support for maintaining the charitable deduction in its present state, saying that given the current environment where charities are doing more with less, “this is not the area for experimentation by the Federal government.”

Senator Charles Grassley (R-IA), in lieu of asking questions of the witnesses, read a statement for the record that discussed new cases of abuse in the charitable sector, and used the Solyndra scandal as a primary example...(keep reading)
 

Grassley Amendment
Earlier this week, Senator Grassley offered an amendment to H.R. 2112, the “minibus” (as opposed to omnibus) appropriations bill before the Senate.  The Grassley Amendment calls for the federal government to block all grants to nonprofit organizations that invest in overseas hedge funds and claim the unrelated business income tax (UBIT) exemption.  This is the same language that the Senator offered as an amendment to the Second Chance Act, which offered employment incentives for hiring former prisoners, and has since stalled in the Senate.  We believe this sort of federal oversight indicates a slippery slope to greater intervention in the sector, something we cannot support.  While we do not expect the amendment to be adopted in the final bill, we will continue to follow this issue closely.
 

Jobs Bill
On Thursday night, the Senate failed to pass S. 1723, the Teachers and First Responders Back to Work Act, legislation which would have provided $35 billion to fund state and local public employee jobs in the education and public safety sectors.  This is just one portion of President Obama’s jobs bill, the American Jobs Act, and represents the piecemeal strategy for passing the bill that Senate Democrats announced last week. The bill would have been funded with a 0.5 percent surtax on individuals and couples earning more than $1 million, beginning in 2013.  The President is currently on a nationwide tour through key states to rally support for the entire bill, even though that bill did not pass the first vote last week in the Senate.

Consider This

Reading Between the Lines on the Senate Finance Committee Hearing on Charitable Giving

Earlier this week the Senate Finance Committee held a hearing on charitable giving incentives.  It has been years since the Committee has focused on that topic and the hearing was held in the context of tax reform somewhere down the road.

The Committee has been holding many hearings on various topics to prepare for tax reform and Senators have been exhibiting some hearing fatigue.  So we were surprised by the relatively strong attendance and pleased by the generally warm and fuzzy things members had to say about the charitable deduction. 

Is that all there is?  Is the charitable deduction off the table from future consideration?  For Ranking Member Orrin Hatch (R-UT) it appeared to be.  But reading between the lines, we don’t think so...

(keep reading)

Making Headlines

Here are a few recent news items you may find interesting:

Federal
Senate Finance Hearing: Tuesday’s Senate Finance Committee hearing “Tax Reform Options: Incentives for Charitable Giving” has garnered national and local headlines: Washington Times, Bloomberg Business , The Hill, Salt Lake Tribune, and The Chronicle for Philanthropy.

Charitable Deduction: Voices nationwide continue to speak out against proposals to limit the charitable deduction: Baltimore Sun, Boston Herald, Billings Gazette (Montana), Centre Daily (Pennsylvania), and Manteca Bulletin (California).

As we reported, ACR hosted nonprofits from across the country for a successful Fly In/Speak Out: Preserving Charitable Giving event to educate Members on the need to preserve the charitable deduction. Participants are now sharing their experiences: United Way of South Carolina, Opera America/Dance USA and Contemporary American Theater Festival (video).

A new study from the Tax Policy Center, a project of the Urban Institute and Brookings Institution, has estimated that President Obama’s proposal to limit the charitable deduction would depress giving from $1.7-billion to $5.6-billion a year. (Click here to read the advanced copy).

Related news – For an economic approach to the impact of limiting the charitable deduction: The Charitable Deduction and Price Elasticity, Philanthropy Daily

IRS Investigations: Representative Charles Boustany, the Republican chairman of the House Ways and Means oversight subcommittee, has asked the Internal Revenue Service to provide details on its investigations of the nonprofit sector including the number of audits the IRS has opened since 2008, the amount of its budget dedicated to auditing the tax-exempt eligibility of organizations, and data on the revenue and assets reported by nonprofits in that period.  This comes amid news that the IRS is reducing spending in anticipation of budget cuts for the current fiscal year that have yet to take effect.
 

Comings & Goings (Nonprofit Leadership)
White House: President Obama’s domestic policy advisor Melody Barnes has announced she will leave the White House at the end of the year. Barnes is credited with establishing the Office of Social Innovation and Civic Participation and the Social Innovation Fund.

Corporation for National and Community Service: Wendy Spencer, the current head of the Florida Governor’s Commission on Volunteerism and Community Service, has been named to lead the Corporation for National and Community Service replacing Patrick Corvington (who resigned in May).

This Caught Our Eye…
Presidential Candidates’ Giving:  Huffington Post examines each of the contenders for the White House through the lens of their charitable efforts and explores giving patterns of liberals and conservatives.

Hybrid Companies: Stephanie Strom examines hybrid companies and the legislative efforts underway in states and at the federal level to promote them.

Nonprofit Size:  In a Harvard Business Review op-ed two Booz & Company executives draw a link between the size of nonprofit organizations and how well they have weathered the recession finding that the decline in revenue for smaller, more targeted organizations has not been as sharp as the decline for larger, general-purpose charities.

Arts Funding: Michael Kaiser, president of the John F. Kennedy Center for Performing Arts, comments  that the lack of funding for minority arts groups can be traced to failure to recruit board members with the ability to fundraise and heavy reliance on foundation grants in lieu of a more diversified funding portfolio.

Happiness in Giving: Debbie Stark, vice president for the Greater Kansas City Community Foundation, highlights a Stanford study proving that charitable thoughts lead to a happier life, a theory advocated by the Dalai Lama.

Unsubscribe

Not interested in this email?