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Friday, July 13, 2012

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Read the latest updates below.


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 @acrefom on Twitter.

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

The Case Against Mandatory “Headcounting”
In the latest issue of The Philanthropy Roundtable’s magazine, Philanthropy, Adam Meyerson, president of the Roundtable, writes about calls for mandatory “headcounting” by foundations to determine the level of funding for specific demographic groups.  Meyerson explains why broad, across-the-sector counting could be detrimental to philanthropic freedom, a core tenet of the Roundtable and ACR.  He also highlights instances where foundations might want to collect information on demographics to help them achieve their goals.

UPDATE: Mass Legislature Passes Budget Without Measure To Restrict Nonprofit Leader Compensation
The Massachusetts Legislature approved a $32.5 billion state budget bill to fund its operations for the next year, but did not include provisions that would place limitations on compensation for board members or executives of nonprofit organizations. ACR has been monitoring efforts in Massachusetts over the past two years and will continue to be vigilant as this issue may arise again.

Nonprofit Expert’s Article on Health Care Law Raises Taxing Questions for Philanthropy
In light of the recent Supreme Court ruling on President Obama’s healthcare law an two legal experts recently published an article in the Chronicle of Philanthropy that raises important questions about how the legislation could impact tax exemptions and the charitable deduction. The authors are well-known nonprofit experts, Suzanne Garment, visiting scholar, Center on Philanthropy at Indiana University and Leslie Lenkowsky, a professor of public affairs and philanthropic studies at the Center on Philanthropy at Indiana University.

 


Washington Roundup

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Congress returned to Washington after the 4th of July for the last legislative work period before the August recess, which is scheduled to begin on Friday, August 3rd.  The Presidential nominating conventions are also in August, with the Republican National Convention beginning on August 27th in Tampa Bay, FL and the Democratic National Convention starting on September 4th in Charlotte, NC.   The House spent the balance of this week debating the President’s health care reform act, and subsequently repealed the bill on Wednesday by a vote of 244-185.  A repeal vote is not expected to be brought up in the Senate and therefore the law remains in place.

Tax Legislative Agenda

In addition to the health care repeal vote, the President and Members of Congress were very vocal on how to handle the current Bush era tax rates before the fiscal cliff, the tax increases and spending cuts that are scheduled to take effect on January 1, 2013.

On Monday, President Obama called for a one-year extension of current tax rates for those earning under $250,000 a year.  In response, Speaker John Boehner said this policy was irresponsible and that “keeping tax cuts only for the middle class would hurt the economy,” affirming that the House will vote on a one-year extension of the current tax structure for all Americans in the next two weeks.  Majority Leader Nancy Pelosi (D-CA) took the lead for the President’s plan and renewed her push for a vote on extending the tax rates for those earning under $250,000.  There was some speculation that she would buck the President’s proposal and instead push for an income threshold of $1 million, but for now it appears she is sticking to the President’s position.

The Senate will also hold votes on extending the President’s proposal for a one-year extension of current tax rates for those earning under $250,000.  On Tuesday, July 10, Majority Leader Reid said that he will allow a vote on the President’s proposal.  Complicating this plan, however, are several embattled Democrats seeking re-election who believe the income threshold should be $1 million or more, including Senator Claire McCaskill (D-MO).  It remains unclear whether a vote on the $1 million income threshold will also occur.  As for the Republicans, they plan to oppose any extensions of the current tax rates unless all Americans benefit.

At the end of the day, however, it remains unlikely that any tax cut extension will be approved before the elections in November, since each party believes its position will win voters.  Washington Post writer Ezra Klein sums up the campaign season best: “Insofar as this election can be reduced to a single policy question, it’s this: Which is more unpopular? Raising taxes? Or refusing to raise taxes on the rich?”  Therefore, we cannot read too much into the upcoming series of votes.  We still believe that the real action on the Bush era tax cuts will take place during the “lame duck” session of Congress this winter.  As always, ACR will keep you up to date.
 


Consider This

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As we inch toward the new year and the expiration of practically all things in tax world, just what are policymakers doing to prepare?

The short answer is in the short term, not very much.  The President called on Congress earlier this week to pass an extension of the Bush tax cuts for those making under $250,000.  House and Senate Republicans are near-united in pressing for an extension of these tax cuts for everyone.  And there are leading House and Senate Democrats who would like those tax cuts to apply for those making under $1 million, not $250,000.

There are loads of moving parts – the “Gang of Six” in the Senate has blossomed to the “Gang of Eight” and counting.  That group is working on a 900 page plus tax reform bill that they hope will garner support in the Senate and beyond.  The House expects to vote on a straight extension of the Bush tax cuts later this month.  And Senate Democrats are, as of this writing, still working out their strategy on how to move forward.

So what do we expect?  What we’ve expected for the last few months.  A lot of back and forth on taxes leading up to the election with 99.9 percent of the activity being about politics, not policy.  In the lame duck, the real work will begin and likely will be some short-term extension of the Bush tax cuts along with some roadmap for tax reform.  But we’re also hearing whispers that maybe everything expires and we start all over in a new Congress.  As always, stay tuned.


Making Headlines

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Tax Reform/Charitable Deduction

On Face the Nation, Senator Lindsay Graham (R- SC) defended the charitable deduction in response to a question of how Congress can tackle the debt without raising taxes, proposing that all deductions be eliminated except the charitable and mortgage interest deductions. His comments touched off debate in local media, but voices from a South Carolina community echo their support of the charitable deduction and the benefits that most Americans receive from charitable organizations. See Also: Face the Nation Transcript, June 17, 2012.


Taxes

The President announced he will not to sign a short-term extension of the Bush-era tax cuts if they are extended to high-income taxpayers (couples earning over $250,000 or individuals earning $200,000). Experts predict that if the president is re-elected, a deal reached to extend the tax cuts will likely include a cap on deductions for high income earners, including the charitable deduction.


States/Local

Memphis: The Memphis City Council voted to consider whether nonprofit and tax-exempt organizations should be asked to make voluntary payments in lieu of taxes as a means to raise revenue, but local nonprofits are concerned. See Also: Editorial: Nonprofits give much back


This Caught Our Eye…

Philanthropic Data Collection: Brad Smith, president of the Foundation Center, explains that the philanthropic sector has been slow to adapt and embrace data collection and information sharing and offers suggestions on how foundations can do more.

Boost in Charitable Giving: In response to findings from Giving USA that charitable giving was up 4% last year, the Editorial Board of the Philadelphia Enquirer opines on why giving increased. They suggest among other things that some donors may be reacting to government cutbacks or offering support for privatizing core functions once handled by government.

School of Philanthropy: Details continue to emerge about Indiana University’s School of Philanthropy which may begin classes as early as the 2013-14 academic year if the state approves the university.

Solutions for Job Creation: Arianna Huffington announced that Huffington Post has launched a new jobs section, Opportunity: What Is Working, and will be hosting events during both conventions to spotlight job creation programs and efforts. It is supported by a group of foundations The Amelior Foundation, The Ford Foundation, The Skoll Foundation, and The Rockefeller Foundation and several notable companies and educational institutions.

IRS Audit: The Treasury Department’s inspector general for tax administration conducted an audit of the IRS Exempt Organizations division and found that although it is responding faster to allegations that groups are violating tax law, the IRS needs to boost its efforts to manage those referrals. The review randomly selected a list of referrals about tax-exempt groups, and found that the IRS had difficulty tracking down about a quarter of them.

 


Upcoming Event

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2012 Philanthropy Roundtable 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.

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

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

Featured speakers include:
Steven Anderson, president, Donald W. Reynolds Foundation
Carol S. Dweck, Lewis and Virginia Eaton Professor of Psychology, Stanford University
Ingrid Johnson, chair, City of Newark Reentry Advisory Board
Gay Hart Gaines, trustee, Mount Vernon Ladies’ Association
Adam Gelb, director for Public Safety Performance Project, Pew Center on the States
Fred Krupp, president, Environmental Defense Fund
Dave Levin, co-founder, KIPP, and superintendent, KIPP New York
James Liske, CEO, Prison Justice Fellowship
William P. Mumma, president, Becket Fund for Religious Liberty
Tricia Raikes, founder, Raikes Foundation
Kenneth W. Starr, president, Baylor University
John Tomasi, founding director, Political Theory Project, Brown University

Click here for the full agenda and speakers.

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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