Washington Snapshot - November 22, 2013
Happy Friday! Please note that Snapshot will be on hiatus next week (November 29th), in recognition of Thanksgiving. We wish you and your families a happy holiday, and we will be up and running again on December 6th!
Spotlight on the Charitable Giving Coalition Fly-in
The Charitable Giving Coalition’s Protect Giving Day fly-in was a tremendous success! We thoroughly enjoyed seeing so many of our readers on Capitol Hill on Wednesday. Several Council members participated in the event, including The Boston Foundation, The Columbus Foundation, Communities Foundation of Texas, Community Foundation of the Eastern Shore, Lubrizol Foundation, and Prince Charitable Trusts, as well as several regional associations, including the Council of Michigan Foundations and the Southeastern Council of Foundations. Thanks to each of you who made the trip here to educate lawmakers and Hill staff on the value of the charitable deduction, and to those back home who helped get the message out in other ways.
The day was widely covered by media from around the country, with articles appearing in POLITICO, the Nonprofit Times, the Los Angeles Times, Investment News, the Chronicle of Philanthropy, Philanthropy News Digest, and blog posts featured in the online publications The Giving Circle and Don’t Mess with Taxes. “If the charitable deduction is limited, then the high-end donors who account for a disproportionate share of charitable giving will just consult with their tax advisers and they'll have to reduce their gift to charity,” Steve Taylor, senior vice president and counsel for public policy at United Way Worldwide, told Investment News. Council president and CEO Vikki Spruill was quoted by Philanthropy News Digest speaking about the impact of the deduction on donors: “Across the country, Americans continue to donate what they can to charitable organizations and foundations, but many of those donors are sensitive to tax changes. Our policy makers must be mindful of this and, most importantly, mindful of the significant negative impact that policy changes could have on the communities most in need.”
The Council also issued its own press release highlighting the day and quoting Vikki Spruill urging policymakers to preserve the charitable deduction: “During this economic recovery and against the backdrop of increasing government cutbacks, reducing the charitable deduction does not make sense. Government cutbacks are already hurting our nation’s most vulnerable communities. To couple them with a reduction in charitable funding would be devastating.” And, #ProtectGiving became a local trending topic on Twitter in D.C. on Wednesday, with nearly 900 tweets posted about the fly-in and the charitable deduction!
Also, there is still time to sign the Coalition’s Change.Org petition, which asks the President and Congress to preserve the charitable deduction in its current form as they negotiate on the deficit and consider comprehensive tax reform. You can also check out the Protect Giving YouTube channel to hear personal accounts about the invaluable impact of the deduction across the country or to add your own story to the mix.
Highlights of the Day
Participants from all over the country delivered a clear message to lawmakers on Wednesday—“I am the charitable deduction”—and hit home the link between charitable giving and thriving local communities.
To put the day in perspective, we had 35 teams and over 200 participants representing 140 organizations fanned out around the Hill, attending a whopping 157 meetings. Diverse charitable and philanthropic organizations from across the country joined forces to meet with members of Congress—from local arts organizations like the Arts Council of Fort Worth & Tarrant County, to private family foundations like the Wasie Foundation, to colleges and universities like Northeastern University, to national organizations like the Salvation Army, to faith-based charities like Catholic Relief Services, to community foundations like The Boston Foundation.
And, we met with nearly every key Member’s office. Of our meetings, 12 were personally attended by Senate or House Members. We visited 25 out of 29 of the Budget Conference Committee Member offices, 22 of 24 Senate Finance Committee Member offices, and 34 of 39 House Ways and Means Committee Member offices.
For more information about the day or to learn what else you can do to get out the message about the charitable deduction—including templates for media outreach, talking points, and social networking strategies—check out the resources on the Charitable Giving Coalition website.
Lunch Briefing for Congressional Staff
Congressional staff and fly-in participants attended a special lunch briefing with Coalition leaders and tax policy experts. At the lunch, Arthur Brooks, Ph.D., president of the American Enterprise Institute previewed new research from an upcoming report that will be released early next month. The report looks at the impact of the recession’ on charitable giving as well as the potential impact of limits to the charitable deduction. Brooks said that charitable giving stands at pre-recession levels and may not grow again strongly for several years. We will cover more information from the report when it’s released.
Eugene Steuerle, Richard B. Fisher Chair and Institute Fellow at the Urban Institute, and Robert Sharpe, President of the Sharpe Group, were on hand to discuss the negative consequences of placing limits on the charitable deduction. As Steuerle explained to the standing-room-only room, the charitable deduction is unique because “it’s the donee that gets the benefit of charitable giving incentives—not the donor.” Sharpe told the crowd, “we’ve had this deduction for nearly a hundred years and people have baked this into their thinking and to all the sudden reduce that or eliminate it, you change the economics of the situation and vastly increase the cost of the giving.”
Thune-Wyden Letter on the Charitable Deduction
Perhaps the most exciting development, well-timed for the fly-in, was the announcement of strong bipartisan support for the charitable deduction from Senator John Thune (R-SD) and Senator Ron Wyden (D-OR). The two senators—both members of the Senate Finance Committee—released a letter to Senators Max Baucus (D-MT) and Orrin Hatch (R-UT), the Chairman and Ranking Member of the Finance Committee—urging them to preserve the current charitable deduction. The letter underscores growing bipartisan congressional support for the deduction, and is being circulated on the Hill for additional signatures from other senators. The letter was featured in a piece in The Hill, “Top Senators Lobby for Charitable Deduction,” and in a Bloomberg BNA piece (subscription only), “Thune-Wyden Letter Called Game Changer In Fight to Save Charitable Deduction.”
“The charitable deduction is unique. It is the only provision that encourages taxpayers to giveaway a portion of their income for the benefit of others. For this reason, it is not a loophole, buta lifeline for millions of Americans in need. Analysis has repeatedly shown that proposals to cut,cap, or limit the charitable deduction could cause charitable donations to decline by billions ofdollars annually,” the two senators told their colleagues.
The letter is an important step towards protecting the charitable deduction. Yet, it is critical for the sector to continue to educate policymakers about the impact of the charitable deduction on the communities you serve as Congress searches for revenue in the tax reform process. And, as a constituent, your voice is especially powerful.
Feel free to contact your senators and urge them to join Senators Wyden and Thune by signing this letter by December 12th!
A Busy Week in Tax Reform
Chairman Baucus Discussion Drafts
This week, Senate Finance Committee Chairman Max Baucus (D-MT) released three tax reform “discussion drafts.” These drafts are being circulated among members of Congress and the public as starting points for a comprehensive tax reform conversation, with a deadline of January 17th, 2014 for feedback. The drafts are focused on international taxation, tax administration, and cost recovery and accounting, and do not touch the charitable deduction or other charitable giving incentives in the tax code.
The tax administration draft does propose requiring all tax-exempt organizations to electronically file their Form 990s, but gives organizations the ability to request a waiver from this requirement if they lack the technology necessary to e-file. We are in the process of determining what this e-filing requirement would mean for Council members, and would value your input. Please contact our policy analyst Katherine LaBeau if you would like to weigh in.
Senator Schumer IRA Rollover Bill
In breaking news, we’ve just learned that Senator Chuck Schumer (D-NY) has re-introduced the Public Good IRA Rollover Act (S.1772). Versions of this bill have been introduced in every Congress since 2005, but not enacted. While bill text has not yet been released, we expect it to be similar or identical to past bills on the charitable IRA rollover. We know the rollover provision is particularly important to community foundations, and we’re actively engaged in this legislation.
Exempt Organization Simplification and Taxpayer Protection Act of 2013
This week, House Ways and Means Oversight Subcommittee Chairman Charles Boustany (R-LA) introduced a bill that creates greater oversight over the tax-exemption application process for 501(c)(4) organizations. The legislation, H.R. 3520, was introduced in response to findings from a May Treasury Inspector General report that uncovered improper IRS scrutiny of certain 501(c)(4) organizations.
The Act would allow the Government Accountability Office (GAO) to evaluate IRS audit selection procedures for impartiality and follow up with the IRS to ensure compliance with any GAO recommendations for altering these procedures. It also requires new 501(c)(4) organizations to notify the IRS within 60 days of their establishment, and gives certain existing organizations 180 days after the bill is enacted to notify the IRS. 501(c)(4)s are also empowered to seek a declaratory judgment in court if they do not hear back about their tax-exempt status applications within 270 days. The bill was referred to the House Ways and Means Committee for consideration. We will keep you posted on its progress!
Snapshot Holiday Schedule
The Council’s Public Policy and Legal Affairs team wishes you a warm and festive upcoming holiday season! We also want to let you know that Snapshot will not be published on November 29th and December 27th in light of the holidays that take place those weeks.
Keep in Touch
Please feel free to reach out to any of us on the public policy team with any comments or concerns, or to share an issue, article, or op-ed you’d like to see covered in a future Washington Snapshot.
