House Ways and Means Committee Passes Key Measures in Support of Philanthropy

Today, the House Ways and Means Committee met to markup several important bills focused on the charitable sector. One bill would make the charitable “tax extenders”—including the IRA charitable rollover—permanent law. Another would simplify the private foundation excise tax on investment income to a single rate of 1%. The Council has already expressed support for both of these measures. All five bills were passed out of the Committee and will now face a full House of Representatives vote.

Council President and CEO Vikki Spruill released the following statement after Thursday’s markup:

The Council on Foundations commends the Members of the House Ways and Means Committee for their commitment to supporting a strong philanthropic sector. The five charitable bills passed by the Committee today will encourage charitable giving and strengthen philanthropy’s ability to serve communities across the country.

Simplifying the private foundation excise tax to a flat rate of one percent will allow private foundations to spend more resources on communities in need, rather than on tax compliance. The measure will lift an administrative burden that creates a perverse incentive to give less, not more, in times of need. Under the new measure, foundations could devote more time to grantmaking and less to navigating a complicated tax provision. We would like to thank Congressmen Erik Paulsen and Danny Davis in particular for introducing this bill.

We are also especially pleased that the Committee voted to make the IRA charitable rollover permanent. This provision has long been a priority of the Council, and we thank Congressmen Aaron Schock and Earl Blumenauer for their leadership on this bill. A permanent IRA charitable rollover will give individual donors certainty when planning their charitable gifts, which means more money will flow to charitable causes.

We thank the Members of the House Ways and Means Committee for moving these bills forward, and we look forward to working with the full House of Representatives to move these provisions toward becoming law.

The Council was also pleased to see broad, bipartisan support for the importance of philanthropy and its impact on communities.

Congressman Aaron Schock (R-IL-18), who sponsored the bill to make permanent the IRA charitable rollover, commented during the markup: “[This bill] will strengthen the U.S. tax code, empower our people to give more generously, and provide our nation’s charities with the resources they need to continue the good work of helping others – and they should be able to do this on a permanent basis.”

Speaking about the uncertainty that the expired rollover has created for taxpayers across America, co-sponsor Earl Blumenauer (D-OR-3) noted that “[i]t is frustrating to have it seesaw back and forth between extension and expiration.”

Congressman Erik Paulsen (R-MN-3), who sponsored the legislation to simplify the private foundation excise tax, said in his opening statement: “This will simplify the tax planning process, especially for smaller foundations that now must spend valuable resources on accountants and lawyers instead of grantees.”

Co-sponsor Danny Davis (D-IL-7), made clear that this bill would help to put more philanthropic dollars into communities, stating—“when philanthropy thrives, communities thrive.”

Chairman Camp also spoke strongly in favor of simplifying the private foundation excise tax, explaining that this would “allow foundations to put more resources toward charitable purposes.”