Friday, April 20, 2012

Read the latest updates below or with full articles online.

ACR Blog Roundup

Washington Roundup

It has been a busy few weeks on the Hill. Here are some updates important to philanthropy.

Buffett Rule

On Monday night (April 16th), the Senate rejected S. 2230, aka the “Buffett Rule,” by a vote of 51-45 (60 votes were required).  Senator Susan Collins (R-ME) was the only Republican to support the bill, and Senator Mark Pryor (D-AR) was the only Democrat to oppose it.  The “Buffett Rule” would impose upon taxpayers with annual reported taxable incomes of more than $1 million an "effective tax rate" of at least 30%.  Republicans seized the opportunity to speak out against the bill, and Senator Hatch (R-UT), a longtime champion of the nonprofit sector, issued a statement that denounced the Buffett Rule as a bill that would “undermine charitable giving” due to higher taxes on the largest subset of donors.

The vote also kicked off a two-week discussion on taxes, specifically timed to coincide with Tax Day, April 17th.  In the House,... (CONTINUE READING)
 

Toomey Tax Plan

On Wednesday afternoon, Senator Pat Toomey (R-PA) unveiled his FY2013 budget proposal that, like the other proposals we’ve seen this year, lacks specifics.  However he does offer a roadmap on several issues including a call for eliminating or reducing the value of various tax provisions, especially for those benefitting high income earners which could include the charitable deduction. He offers examples of reforms including the approach advocated by Martin Feldstein, former chairman of the Council of Economic Advisers from 1982 to 1984 under President Ronald Reagan.  Feldstein suggested capping the value of itemized deductions at 2% of adjusted gross income (AGI), while leaving open the possibility of keeping some of these deductions, whole, specifically the charitable deduction. 

This plan is not expected to pass but it remains a significant indicator of what tax reform proposals may look like.

Consider This

Congressional Outlook Post Easter Recess

Last month, as part of the Summit for Leaders we organized a stellar team of more than 40 foundation and nonprofit leaders for our ACR Fly in/Speak Out. They fanned out across Capitol Hill to meet with 40 Congressional offices that are deeply involved in tax and philanthropic issues. 

Now for the good news/bad news.  By our reckoning, a good time was had by all and our message about preserving the charitable deduction, both now and when we get to tax reform, was warmly received.  The bad news is that for those most in the know on Capitol Hill there were no assurances that charitable giving will be protected in the context of tax reform.  Indeed, we heard on multiple occasions that when it comes to tax reform, “everything is on the table.".... (Continue reading)

Making Headlines

Federal

Program-Related Investments: BNA reports that a proposed rule (REG-144267-11) would broaden the range of investments that would qualify as “program-related investments” and not trigger excise tax. Comments and requests for public hearing are due by July 18.
 

States/Local

Illinois: Continuing on the trend of increased scrutiny on nonprofit organizations that receive public funding, state Senator Martin Sandoval (D-Cicero) has proposed that such nonprofits be subject to Illinois’s Freedom of Information Act (FOIA). The bill (S.B. 3773) is currently under revision.

Michigan: Tax Day has sparked political sparring over the state’s tax overhaul from last year, and some Democratic lawmakers are advocating for the restoration of dozens of credits and deductions eliminated as part of the overhaul, including some that benefitted charities.

Emerging Trends
This new section will feature trends we are seeing across the charitable sector that we find interesting.

Grassroots: Groupon has launched Grassroots, a fully-integrated fundraising and volunteering service which features nonprofit causes and the impact of their campaigns, as a new service on its website.

This Caught Our Eye…

Taxmageddon: Tax Day may look very different next year. As we’ve reported, a number of tax provisions are set to expire at the end of 2012 and dramatic federal spending cuts will kick in on January 1, 2013 leading to what the is being called Taxmageddon. Also see: More Uncertainty for 2013, Wall Street Journal and America Still Has Time to Fix 'Taxmageddon' Before It Hits, Desert News

Philanthropy and Democracy: Gara LaMarche, senior fellow at New York University and former president of Atlantic Philanthropies, passionately argues for the role foundations and nonprofits should play in restoring American democracy.

Outcome-Oriented Philanthropy: In the Spring edition of Stanford Social Innovation Review, Paul Brest, president of the William and Flora Hewlett Foundation, assesses the performance of “outcome-oriented” or “strategic” philanthropy. He argues that despite innovations, new ideas, and improved practices in grantmaking, philanthropy is still underperforming in achieving social outcomes.

Giving Pledge Update: An additional twelve billionaires have signed onto the Giving Pledge, bringing the total number of signatories to 81. Pledge signers vow to give at least half of their fortune away during their lifetime or at death.

Global Philanthropy Forum: The Aspen Institute held its annual forum assembling world leaders, experts in development, and nonprofit leaders on issues in philanthropy.
Also see:
- Tony Blair on Faith, Governance, Aid and Philanthropy, Forbes
- Huffington Post op-eds: (Jane Wales) Learning: Where New Philanthropy Meets Old and (Tony Blair) In Favour of Philanthropy.
- View videos of plenary addresses here.

Journalism:  Kevin Murphy, President of Berks County Community Foundation and Vice Board Chair at the Council on Foundations, cites the demise of local news outlets in favor of on-demand, nationally-focused sources. He suggests, “as foundations realize the profound impact of losing the communications vehicles that tie our society together, they're going to recognize the imperative of supporting journalism in their field or community.”

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