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Friday, September 21, 2012

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The latest edition of the ACR newsletter is available below and with full articles online at www.acreform.com.


ACR Blog Roundup

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The ACR blog (www.acreform.com/blog) highlights our thoughts on news of the day. For regular blog updates, follow us @acreform on Twitter.

Here is a roundup of the ACR blog since the last newsletter edition:

‘Is Transparency the Best Medicine?’ (Guest Post)
By: John “Jack” Horak, Founder & Chairman, Nonprofit Organizations Practice Area, Reid & Riege, P.C.
Nonprofit legal expert John Horak explores the issue of transparency for nonprofit organizations explaining how too much can encumber management and board members in their decision-making and why privacy is necessary for good governance. He also provides general privacy principles/guidelines to help guide nonprofits if transparency issues arise. Horak participated in a panel discussion on nonprofit transparency co-hosted by The Philanthropy Roundtable and the Aspen Institute in May of this year. Click here to view the video.

Campaign to Fix the Debt
Founded by Former Clinton White House chief of staff Erskine Bowles and former Republican Senator Alan K. Simpson of Wyoming, the Campaign to Fix the Debt is a bi-partisan group to build public support for a plan to tackle the national debt. The Campaign made new announcements including plans to press policymakers to pass meaningful debt legislation.

Policy Issues on the Agenda
With the fiscal cliff at the end of 2012, tax reform in 2013 and continued economic pressures at the state and municipal levels, the stakes are high and the charitable sector faces real threats to philanthropic freedom. The philanthropic community remains a target of revenue-raising proposals that may alter the sector’s independence and role in society. To prepare donors for the challenges ahead in Washington and in their states, ACR has lined up several public policy sessions at the Philanthropy Roundtable’s 2012 Annual Conference on October 11-12, 2012.

 

 


Washington Roundup

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Both the House and Senate returned to Washington this week for an abbreviated work schedule.  At the top of the to-do list was passing a continuing resolution which will keep the government funded for the next six months.  The House passed the bill on Wednesday, but the Senate has delayed its vote on the measure until later today.  It is expected to pass, and afterwards both chambers will recess until after the election on November 6th.  This means that lawmakers from both parties have opted to wait to tackle fiscal cliff issues until the middle of November at the earliest.

Fiscal Cliff – Reality Sets In
On Wednesday, September 19th, tax-writers in both the House and Senate held closed-door meetings with Administration officials on how to prevent the nation from going off the fiscal cliff (i.e., the looming set of massive spending cuts and steep tax increase that will take effect on January 1st, 2013 should Congress not intervene beforehand.)  According to reports, Treasury Secretary Timothy Geithner met with both House Speaker John Boehner (R-OH) and House Ways and Means Chairman Dave Camp (R-MI), while Senate Finance Committee Members met with Federal Reserve Chairman Ben Bernanke and Congressional Budget Office Director Doug Elmendorf.  No details have been reported on the discussions... (continued)

Taxes – Tides are Shifting
In an effort to ease the pain of tough decisions at the end of the year, some Democratic Senators have already indicated that they would be willing to compromise on a short-term extension of current tax rates for high income earners, but only if Republicans agree to raise revenue in other parts of the tax code.  This marks a departure from the President’s policy of allowing taxes on these earners to increase, indicating that the atmosphere on Capitol Hill is clashing with campaign rhetoric.  Regardless of the outcome of upcoming elections, more lawmakers are realizing that the ultimate result may be a compromise in order to prevent going over the fiscal cliff.

In addition to income tax rates, it is important to remember that many individual tax incentives that annually expire, known as extenders, are also due for consideration.  Before the August recess, the Senate Finance Committee approved a package of these extenders that primarily serves as a template for what an end of the year tax package might look like.  The IRA charitable rollover provision was included in this deal. We do not expect this package to be passed by the Senate before the election.

Sequestration Hits Home
Last Friday, September 14th, the White House Office of Management and Budget (OMB) released a report detailing those government programs that will be impacted by the mandatory spending cuts on January 1st as required in the Budget Control Act (the bill passed at the end of 2011 as a result of the Super Committee’s failure to produce a deficit reduction package).  The report states “[n]o amount of planning can mitigate the effect of these cuts.  Sequestration is a blunt and indiscriminate instrument.  It is not the responsible way for our nation to achieve deficit reduction.  The report leaves no question that the sequestration would be deeply destructive to national security, domestic investments and core government functions.”  The cuts would be wide-reaching, with defense bearing the brunt: over a period of ten years Pentagon spending would be cut by 9.4%, non-defense spending by 8.2%, most entitlement programs by 7.6% and Medicare providers by 2%.  As of now, we expect... (keep reading)


Consider This

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Roadrunning off the Fiscal Cliff?

Remember Wile E. Coyote?  After failing to catch up with the Roadrunner, he’d dash off a cliff and hang mid-air with his legs furiously cycling.  Then he’d look down, then drop like a stone. 

The House and the Senate are leaving town until after the election on November 6th.  When they return for a lame duck session to take up unfinished business, they will be facing the expiration of the Bush tax cuts, onset of automatic spending cuts and the need to increase the debt limit – all to occur at or shortly after the end of the year.  In other words, they will be a little like Wile E. Coyote heading toward that cliff at a furious pace. Are they going to run off the cliff, look down and drop like a stone? (continue reading)


Making Headlines

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Tax Reform/Charitable Deduction

Fiscal Times examines how both presidential candidates would treat tax deductions, including the charitable deduction, as a part of tax reform. Also see: Obama and Romney Offer Few Words on Nonprofits but Contrasting Views, Chronicle of Philanthropy


Federal

White House: More than 150 leaders in philanthropy and finance gathered at the White House for a private meeting on “innovation in philanthropy”.


States/Local

Oregon: In Oregon a measure will be on the ballot this November to eliminate the state's estate tax, which under current law is 10% on estates worth a $1 million and rises to 16% on estates of $9 million.


Research (Studies & Reports)

Nonprofit Advocacy: Independent Sector has released a two-year study of advocacy in the nonprofit sector involving more than 100 interviews with experts and studies of 500 efforts. It concludes that the sector needs a single organization to spearhead a national advocacy network that advances a unified nonprofit agenda. Download full report and highlights: Beyond the Cause: The Art and Science of Advocacy. Also see: Research Examines Nonprofit Political Activity, Advocacy, NonProfit Times


This Caught Our Eye…

Forbes 400: Forbes Magazine provides a report on the Forbes 400 Summit on Philanthropy held in June which assembled 150 of the world’s wealthiest philanthropists to discuss tackling some of the world’s most persistent challenges. Also see: Special Report: Forbes 400 Summit on Philanthropy, Forbes.

A recent survey following the Forbes 400 Summit finds that for a majority of donors taxes impact their philanthropic giving.
Report: Next-Generation Philanthropy: Changing the World.
Also see: World’s Wealthiest Transform Philanthropy, Forbes

Giving Pledge: Eleven new billionaire families have signed the Giving Pledge, agreeing to give away more than half of their wealth to charity before they die, which brings the total number of signatories to 92. Also see: With 11 New Members, ‘Giving Pledge’ Signers Now Numbers 92, Chronicle of Philanthropy

Charity v. Taxes: As we last reported scholars and nonprofit experts from different viewpoints agree that the charitable sector must be vigilant in distinguishing between philanthropy and paying taxes. In Huffington Post op-ed a Rabbi and Congressional candidate adds his perspective. 

501(c)(4) organizations: A U.S. appeals court ruled this week that tax-exempt social welfare groups that fund campaign advertising can maintain the anonymity of donors, reversing a lower-court decision that mandated some disclosure. The appeals court acknowledged that the McCain Feingold campaign finance reform law is unclear and ordered the case be remanded back to the Federal Election Commission. Also see: Appeals Court Reverses Ruling on Campaign Donors, Businessweek/AP, and Ruling on Donor Disclosure by Social-Welfare Groups Reversed, Chronicle of Philanthropy

Rep. Dave Camp (R-MI) and Sen. Orrin Hatch (R-UT) sent letters to New York’s attorney general raising questions about his investigations into private equity firms and politically active 501(c)(4)’s, noting that the AGs request for information could violate federal tax laws. Also see: Congressional Republicans Raise Questions About New York Investigations, New York Times

Rethinking Nonprofit Overhead: In a Wall Street Journal op-ed, author Dan Pallotta advocates for a shift in the mindset of Americans about how charities should operate. He notes, “The conventional wisdom is that low costs serve the higher good. But this view is killing the ability of nonprofits to make progress against our most pressing problems. Long-term solutions require investment in things that don't show results in the short term.” Also see: Charities Must Battle Public Misconceptions About Overhead Costs, Chronicle of Philanthropy

Philanthropy’s Role in Society: Jane Wales, president of the Global Philanthropy Forum and chief executive of the World Affairs Council, provides her views on how philanthropists play a strategic role in unifying sectors of society noting, “What they do seek is collaborative management among government, businesses, and nonprofits so that together they can tackle large societal problems and do so in ways that strengthen the ties that bind.”

School of Philanthropy: Indiana University cleared the final hurdle in receiving approval to establish the world’s first school dedicated to the study and teaching of philanthropy.

Conservative Philanthropy: At a recent panel discussion hosted by the Bradley Center for Philanthropy and Civic Renewal philanthropic leaders representing conservative and liberal views discussed the future of conservative philanthropy finding that it no longer emphasizes big ideas.


Upcoming Event

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The Philanthropy Roundtable's 2012 Annual Meeting
The American Spirit of Giving
October 11-12

The Breakers, Palm Beach, Florida

Register now for the conference.

The 2012 Annual Meeting of The Philanthropy Roundtable will offer principled, practical lessons on how donors can make the greatest impact. Come and engage. Come and learn. Come and share.

Keynote speakers include:
Nancy G. Brinker, founder and CEO, Susan G. Komen for the Cure
Arthur C. Brooks, president, American Enterprise Institute
Cesar Conde, president, Univision Networks
Mark Edwards, executive director, Opportunity Nation
Michael M. Kaiser, president, John F. Kennedy Center for the Performing Arts
Bernie Marcus, chairman, Marcus Foundation, and co-founder, Home Depot

Click here for the full agenda and speakers.

The Alliance for Charitable Reform will offer programming on public policy issues affecting the charitable sector. ACR sessions and speakers include:

“Taxmageddon:” Renegotiating the Relationship Between Government and the Charitable Sector?
Cleta Mitchell, partner, Foley and Lardner
Alexander Reid, of counsel, Morgan Lewis
Sandra G. Swirski, executive director, Alliance for Charitable Reform, and co-founder, Urban Swirski & Associates
William A. Schambra, senior fellow, Hudson Institute, and director, Bradley Center for Philanthropy and Civic Renewal (Moderator)

The Shifting Policy Landscape: What’s Ahead for Donors and Nonprofits?
Gloria Johnson-Cusack, executive director, Leadership 18
Cindy Lott, senior counsel, Nation State Attorneys General Program, Columbia Law School
Pat Read, Pat Read Consulting
Mason Rummel, president and treasurer, James Graham Brown Foundation (Moderator)

Transparency, Accountability, and Effectiveness:  What are the Connections?
Rick Cohen, national correspondent, Nonprofit Quarterly
Sue Santa, senior vice president for public policy, The Philanthropy Roundtable
Andrew Schulz, executive vice president and national director of community and legal relations, Foundation Source
John E. Tyler III, vice president and corporate counsel, Ewing Marion Kauffman Foundation (Moderator)

This event is for qualified participants only. Click here to review event qualifications.

For more information: http://www.philanthropyroundtable.org/topic/annual_meeting/

 


If you experience any technical difficulties with links please email plee@philanthropyroundtable.org.

Contact ACR at Info@acreform.com


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