Washington Snapshot - September 26, 2013
On Capitol Hill, budget battles and lengthy debate
Heated debate and political gamesmanship on budget issues dominated the House and Senate floors this week. As of today, resolution of the federal budget (the continuing resolution) and the debt ceiling limit may not happen until the last minute, which would be September 30th for the budget, and is now projected to be no later than October 17 for the debt limit. There are a variety of potential scenarios if no agreement is reached on these measures, and we will report to our readers as we learn more.
The President reiterated on Monday that he will not negotiate or accept unrelated amendments the debt ceiling measure. On Wednesday, Senate Finance Committee Republicans released a letter to Treasury Secretary Jack Lew asking for more details on the debt limit increase sought by the Administration.
Late Wednesday, the Senate agreed to speed up its debate on the continuing resolution. After a weekend Senate vote, the measure would return to the House for final approval before the October 1 deadline.
Tax Reform
All of the chaotic legislative activity prompted Politico to run the headline, “Tax Reform’s Status: Heard the Latest Rumors?” The article echoes what we have discussed in Snapshot over the past weeks: Hill observers are uncertain of the exact blueprint and timeline for comprehensive tax reform, but when a draft version of tax reform is released, that will be the starting point for future consideration. Business Week provided a similar in-depth analysis of some of the paths tax reform could take in “Biggest Code Changes in 27 Years Mired in Split Congress.” The Hill reported that a timetable and instructions for tax reform could now be one of the items included in a House debt ceiling measure. House Ways and Means Chairman Dave Camp (R-MI-4) described the possible tax instructions as “broad and similar to those the House used when it tried to extend all the Bush-era tax rates in August 2012.” Another House member cautions in the article that this plan is not finalized yet and could change. And by late Thursday, House Leadership seemed to acknowledge that there may not be enough party support to link the debt measure to larger items such as entitlement reform or tax reform.
There was one interesting development this week specific to nonprofits. For those of you who’ve followed nonprofit tax issues for some time, you’ll recall that for a number of years some in the field have advocated for extending to April 15th the deadline for making charitable contributions that could be deducted from the prior year’s taxes (much like 401K contributions, for example.) This week Representative Mike Kelly (R-PA-3) introduced the Charitable Giving Extension Act (HR 3134), which would allow this extension. We know that that the Ways and Means Committee is unlikely to take up stand-alone tax measures, so if this bill were to advance it would presumably be in the context of comprehensive tax reform.
There was one interesting development this week specific to nonprofits. For those of you who’ve followed nonprofit tax issues for some time, you’ll recall that for a number of years some in the field have advocated for extending to April 15th the deadline for making charitable contributions that could be deducted from the prior year’s taxes (much like 401K contributions, for example). This week Representative Mike Kelly (R-PA-3) introduced the Charitable Giving Extension Act (HR 3134), which would allow this extension. We know that that the Ways and Means Committee is unlikely to take up stand-alone tax measures, so if this bill were to advance it would presumably be in the context of comprehensive tax reform.
At the IRS: Lois Learner retires, Camp concerned about donors lists
In this week’s developments on the IRS scandal, Lois Lerner, the former head of the IRS tax-exempt-organizations division retired from the agency. She had been on administrative leave since soon after revelations about the (c)(4) scrutiny came to light.
Wednesday, House Ways and Means Chairman Camp (R-MI-4) sent a letter to Acting Commissioner Werfel with concerns that in addition to targeting some (c)(4) organizations, the agency also scrutinized donors to these organizations. Werfel is expected to respond before October 9th. We will keep you posted on his response.
Welcome to the Charitable Giving Coalition's new blog!
We invite you to visit the Charitable Giving Coalition’s inaugural blog post this week. This platform will showcase the perspectives of Coalition members in their efforts to protect charitable giving. It will offer resources and personal stories that can be shared as we raise awareness about the importance of charitable giving on human lives and local communities.
Interesting articles this week
What happens when states limit the charitable deduction?
Council of Michigan Foundations’ Rob Collier is quoted in the Pew Charitable Trust’s publication Stateline this week. Pew looks at the negative impact on charitable giving when states change their tax law and eliminate or reduce the charitable deduction. They find specific examples from states that limited the charitable deduction, and states that limited it and felt the impact and reversed course. “What we learned in the states is that the charitable deduction is not just a nice thing for taxpayers, it’s vital to the communities,” said David L. Thompson, Vice President of Public Policy at the National Council of Nonprofits. He continues, “all politicians from across the political spectrum have come to the same conclusion that we are hurting our communities by discouraging giving to charities.”
Reassuring trend for the future
Nine out of ten children in America give to charity. A United Nations Foundation study shows that along with 90% of children donating money to charitable causes, more than 50% volunteer their time to a cause. Associations Now notes that this next generation could be a philanthropic force, but little research has been done on how giving patterns change from childhood to adulthood. That being said, it’s very reaffirming to see the depth of giving across the spectrum by America’s youth.
Nonprofit media
USA Today’s Rem Reider asks in Wednesday’s commentary if nonprofit news outlets, supported by philanthropy, can go the distance? He lauds a study underway that is underwritten by the Knight Foundation and the Bill and Melinda Gates Foundation to find better ways to measure engagement and impact – and find the right metrics to measure results. Though many nonprofit media sources are looking to diversify their revenue stream, not all will be able to, and philanthropy needs to “stay in the mix,” according to Kevin Davis, CEO of the Investigative News Network (a consortium of more than 80 nonprofit newsrooms). This commentary was especially interesting to the Council because of our work with the Knight Foundation and the Nonprofit Media Working Group.
More on Dan Pallotta's TED Talk speech
Many of you have seen Dan Palotta’s TED Talk on charitable giving (which we showed at a past Council conference). Huffington Post weighs in this week on Dan’s ideas with their thoughts about why charitable giving has been stuck at 2% of GDP for forty years, and how to increase it. It highlights the growing group of nonprofits that employ business-like practices to be able to sustain themselves and thrive in this era. Author Eric Kessler feels that the practices of these nonprofits should be shared and emulated throughout the sector.
Look for future editions of Snapshot on Fridays
In order to capture as much of the week’s Congressional action as possible, we will shift Snapshot’s release to Friday starting next week. And as always, if there is critical breaking news, we will be ready with quick Snapshot update when that happens.
It was great seeing so many of you - keep in touch!
It was a pleasure seeing so many Snapshot readers in San Diego. Please feel free to reach out to any of us on the public policy team with any comments or concerns, or if you have an issue you’d like to see covered.
