Washington Snapshot - October 23, 2015
News from the Hill
Nonprofit Leaders Urge Congress to Act on Extenders
On Wednesday, the Council on Foundations and Independent Sector organized a briefing with the House and Senate Philanthropy Caucuses on Capitol Hill to urge Congress to take immediate action on making permanent the three currently expired charitable “tax extender” provisions.
With a turnout of over 120 congressional staffers and nonprofit leaders, the briefing featured speakers from 92nd Street Y, the Cincinnati Art Museum, Claggett Farm, and the Community Foundation Serving Richmond and Central Virginia—whose work is supported directly by these provisions—and highlighted opportunities that promote charitable giving—such as #GivingTuesday. Also in attendance to give remarks were Caucus co-chair Pat Tiberi (R-OH-12) and Representatives Tulsi Gabbard (D-HI-2) and Debbie Dingell (D-MI-12).
The Council and Independent Sector also sent a letter to Senate Majority and Minority Leaders, Mitch McConnell (R-KY) and Harry Reid (D-NV), and House Speaker and Minority Leader, John Boehner (R-OH-8) and Nancy Pelosi (D-CA-12), signed by 18 leading philanthropic and charitable organizations further urging Congress to take immediate action on a permanent extension of the “tax extenders.”
As our readers will recall, after multiple attempts last year to make these charitable provisions permanent in December, Congress resorted to a short-term extension—reinstating these provisions just two weeks before expiring for the fifth time in recent years.
Resolution Introduced to Recognize #GivingTuesday
Representative Tulsi Gabbard (D-HI-2) demonstrated her support for philanthropy this week by introducing H. Res. 482 to recognize the benefits of charitable giving and express support for the designation of #GivingTuesday.
The Council worked closely with Rep. Gabbard’s legislative staff and Independent Sector to get this resolution introduced. Our objective is to build momentum and support for charitable giving as the holidays and end-of-year giving season begins.
Ryan Agrees to Run for Speaker of the House
Since last week’s update, the race for Speaker of the House has narrowed.
On Tuesday, Rep. Paul Ryan (R-WI-1), laid out the conditions under which he would run. National Journal reported that Ryan wants the Republicans to “move from being an opposition party to being a proposition party,” he wants unity within the Republican ranks, and he wants to ensure time with his family. On Thursday, he officially entered the race.
Republicans will vote to choose the nominee next Wednesday, October 28th, and the nominee will be confirmed in a full floor vote the following day.
If Ryan is confirmed as Speaker, Politico reports that three Republicans are vying for his spot as next Chairman of the Ways and Means Committee: Rep. Pat Tiberi (R-OH-12), Rep. Devin Nunes (R-CA-22), and Rep. Kevin Brady (R-TX-8).
Stay tuned for more news next week!
Bill Providing Private Foundation Exemption Introduced
The Philanthropic Enterprise Act of 2015 (H.R. 3732) was recently introduced in the House by Ways and Means Committee member David Reichert (R-WA-8). This bill would create an exemption for private foundations from the excess business holdings tax, given that they are charitably driven and independently supervised.
Stay tuned for additional information.
Executive & Regulatory News
DOL Adopts New Guidance on Impact Investing
This week, the Department of Labor (DOL) issued a bulletin providing guidance clarifying the duties of private pension fiduciaries governed under the Employee Retirement Income Security Act (ERISA). Specifically, the guidance acknowledges that use of Environmental, Social, and Governance (ESG) investing criteria represents a responsible way for fiduciaries to seek market rate returns and maximize social impact.
“Investing in the best interests of a retirement plan and in the growth of a community can go hand in hand,” said U.S. Secretary of Labor Thomas E. Perez in announcing the new guidance. He further explained the new guidance in an op-ed published Thursday.
Under the new guidance, plan fiduciaries are able to consider “collateral benefits” to the community when making investment decisions. Although they may not accept lower expected returns or take on greater risks in making such choices, the social impact of a given investment can serve as a “tiebreaker” when investments are otherwise equal with respect to their economic and financial characteristics.
This change was highlighted as a priority by the National Advisory Board on Impact Investing (NAB) in a 2014 report. Ford Foundation President and NAB Chair Darren Walker welcomed the news. “As a society, we’ve only begun to see the potential of impact investing to unleash economic, social and environmental benefits,” said Walker. “Today is an important step toward realizing this promise and using the power of markets to help solve some of our most urgent social problems.”
The change also comes in the context of recent moves by the Treasury Department to clarify the regulation of mission-related investments (MRIs) by private foundations and finalize new examples of acceptable program-related investments (PRIs). Taken together, the guidance on ERISA, MRIs, and PRIs indicates a trend towards redefining what constitutes reasonable stewardship of invested endowment dollars and the recognition by the Federal Government that charitable purpose is a valid consideration.
Happening in the States
Exclusive from our colleagues at the National Council of Nonprofits.
2015 State Ballot Measures
Local and state policymakers increasingly are legislating in the areas of wages, benefits, and workplace safety and are applying new standards to nonprofit and foundation employers.
Voters in seven states will decide the fate of 26 ballot measures on October 24 (in Louisiana) and on November 3 (in Colorado, Maine, Mississippi, Ohio, Texas, and Washington), according to Ballotpedia, the encyclopedia of American politics. Several of the issues are of concern to the work of nonprofits. A Louisiana ballot measure would allow the Legislature to consider repeal of tax incentives and rebates in each legislative session, and not every other year, as currently restricted by the state constitution. A separate measure on the Louisiana ballot would allow the state to tax the property and land within Louisiana owned by states and local governments other than Louisiana and its political subdivisions.
Mississippi voters are given two options, Initiative 42 and Alternative 42, for providing an “efficient system of free public schools.” Mainers will vote on a Clean Elections Initiative that is actively supported by the League of Women Voters and numerous other groups.
Texans will vote on Proposition 4, which asks whether charitable foundations of professional sports teams should be permitted to conduct charitable raffles. Over the strong objection of charitable nonprofits, the California Legislature recently enacted a law granting preferential treatment of sports team raffles.
Finally, numerous nonprofits in Washington State—including AARP, the Children’s Alliance, League of Women Voters, and NAMI—have come out in strong opposition to a sales tax proposal on the ballot. Initiative 1366 would lower the state sales tax by one percent, from 6.5% to 5.5%, unless the Legislature refers it for voter consideration by Tax Day next year, a constitutional amendment that imposes a two-thirds super-majority requirement for laws or other ballot measures that would raise taxes. Organizations opposing the initiative express concern that the voting requirements would create structural barriers that would keep government from meeting future needs of the public, and lead to the further shifting of public responsibilities onto the backs of nonprofits and private grantmakers.
Philanthropy News and Op-Eds
Copyright and Trademark Tips for Nonprofits
Venable® LLP recently created a helpful list of tips for nonprofits when it comes to copyrights and trademarks to avoid involvement in precarious legal situations. The eleven key tips they list are:
- Use copyright and trademark notices;
- Register your trademarks (both domestically and overseas) and domain names;
- Register your copyrights;
- Police use of your intellectual property;
- Codify all licenses from Your nonprofit to others in writing;
- Make sure you own or have permission to use all intellectual property;
- Obtain agreements with independent contractors;
- Obtain agreements with authors and speakers;
- Obtain agreements with officers, directors, committee members, and (sometimes) other volunteers;
- Protect your membership database; and
- Distribute rules for interactive online services.
This information is intended for educational purposes and does not create an attorney-client relationship. The information is not a substitute for expert legal, tax or other professional advice tailored to your specific circumstances, and may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code.
