Washington Snapshot - October 03, 2014
Tell Congress: Pass the America Gives More Act
While your lawmakers are home in October to ask for votes, make sure you ask them to pass the America Gives More Act provisions into permanent law during the lame duck!
A Bloomberg BNA piece this week highlighted the challenging position in which IRA rollover donors find themselves. This piece—which quotes several of our colleagues in the field—serves as a powerful reminder of the uncertainty potential donors and organizations face because the IRA charitable rollover has not yet been passed into law for the current tax year. This uncertainty is likely to chill donations—for the IRA charitable rollover and all of the charitable giving incentives that Congress has yet to renew.
As the year draws to a close and more and more potential donations are deterred by congressional inaction, it is more important than ever to contact your lawmakers and ask for their support for the America Gives More Act.
Even though Congress has adjourned, we must keep up the momentum on the America Gives More Act (H.R. 4719). Over the past few weeks, countless foundations and charities from across the country have told their lawmakers how important the America Gives More Act provisions are for the charitable sector. We have to keep that drumbeat going.
When Congress comes back in November, they will only have about three work weeks remaining in the year, and we need to push for a floor vote during that time.
The Council’s advocacy toolkit has everything you need to make your voice heard. We’ll be revising it for fall advocacy activity, so look for new materials coming soon. In addition, our colleagues at the National Council of Nonprofits have created a very useful website with details on H.R. 4719 and ways you can speak out.
Announcing Post-Election Webinar
Election 2014: How Beltway Politics Shape the Legislative Outlook
Join us on this webinar as we get a run-down off everything that happened on Election Day 2014 from National Journal’s Political Editor, Josh Kraushaar. Josh will cover the most closely watched congressional elections in districts around the country, and offer his expert analysis of the outcomes of the races you care about.
Will the election outcome effect tax reform prospects for 2015? What about the fate of charitable tax extenders like the IRA rollover? Does new Ways and Means Committee leadership change Congress’s tax-writing priorities? Ken Kies of the Federal Policy Group and Rob Leonard of Akin Gump Strauss Hauer & Feld, will address these questions and more, and will comment on how the midterm election results will impact what happens (or doesn’t happen) in Washington for the next two years.
News from the Hill
Tax Reform Possible, Key Lawmakers Say
Comprehensive tax reform “in the realm of doable” over the last two years of President Obama’s term, according to House Speaker John Boehner (R-OH-8).
“I didn't come to Washington to make noise . . . I went there to do something on behalf of my country. And I think the president ran for office to do something on behalf of the country,” Boehner emphasized in a TV interview this past weekend. Recently, Obama Administration officials have also signaled a desire to move forward with tax reform.
The President’s National Economic Council Director Jeffrey Zients discussed a corporate tax reform plan from the President. Zients addressed the President’s proposal—not yet in the form of a bill—to lower corporate tax rates from 35 percent to 28 percent, among other changes the President has hinted that he would make. It is not yet clear whether the Administration will formally present corporate tax reform legislation to Congress.
While Congress and the White House may be taking small steps to reach a consensus on corporate tax reform, they remain divided on how to reform the individual code. Speaking about the individual tax code, Zients said there are “too many special interests and loopholes” that would be difficult to touch politically.
Key tax-writers Ron Wyden (D-OR) and Paul Ryan (R-WI-1) have also expressed their hope for progress on reform. Wyden is the Chair of the Senate Finance Committee, and Ryan is rumored to be next in line for Chair of the House Ways and Means Committee.
“Until about a year from now” when the 2016 presidential election will start to “suck all the oxygen out of the room . . . I think there’s a prime opportunity to do big important stuff,” Chairman Wyden said. Representative Ryan was optimistic, but expressed caution: “Tax reform’s one of those things where we just don’t know if we can get there at the end of the day,” he told a convening of the Financial Services Roundtable.
Trending in Legal Affairs
Is There Such a Thing as Too Much Due Diligence Under the Patriot Act?
We live in a world of ever-present concern about terrorism. Not surprisingly, this extends to the daily work of foundations, as illustrated by a question that recently came into our legal team.
A Grants Administrator for a community foundation contacted us recently seeking guidance about checking terrorist watch lists before making grants. The question: should the foundation be checking all of their grantees (domestic and international), or only those that are internationally-based.
The Council’s Legal Affairs team advised that the Patriot Act’s (18 U.S.C.A. § 23339A) prohibition on supplying “material support or resources” to terrorist groups applies to both U.S. citizens and non-U.S. citizens. Our suggested practice is to check all grantees (domestic and international) as the most prudent course of action.
The issue this Grants Administrator raised goes to the balance of risk assessment and efficiency. We explained that while there was no penalty for not doing due diligence, and that the significant downside of failing to check would be making a grant to an organization with terrorist ties.
For more information on global grantmaking, please visit the Council’s website.
We remind all Council members that the Legal Affairs team is an important resource that may help with both the day-to-day and the big, confounding issues that come your way. In future issues of Washington Snapshot, we’ll continue to cover legal questions that are trending among our members. In the meantime, don’t hesitate to reach out to us at legal@cof.org.
Philanthropy News and Op-Eds
Public Seeks Clarity on Nonprofit Political Activity
Our readers may recall the proposed rules on 501(c)(4) political activity released last year that received a record number of public comments, mostly opposed to the rules as-written. The Council weighed in with comments of our own, arguing that the proposed definition of “political activity” was too broad and would capture permissible non-partisan education. In response to the overwhelming number of comments, the IRS stated that it would rewrite the rules, which are expected to be re-issued in 2015.
The Hudson Institute released poll results this week that indicate that 9 out of 10 voters surveyed want rules in place that clearly define political activity for nonprofit organizations. Despite this consensus, the public is divided on what these might look like.
A Forbes piece by Howard Gleckman breaks down ideas presented by different thinkers in the field. He does not take a side in this debate, but concludes: “[w]hile analysts continue to struggle with ways to address the problem, they do seem to agree on the importance of consistent disclosure.”
Professor Roger Colinvaux of Catholic University recently wrote a law review article advocating for uniform disclosure rules for all political giving and moving those regulations to the Federal Elections Commission (FEC), taking the IRS out of the process.
Professors Bertram J. Levine of Rutgers University and Michael Johnston of Colgate University propose making it a crime for a political donor to tell the candidate-recipient of his donation about any campaign gift. Instead, the donor would designate the money for a specific candidate but would have to go through the FEC to make the donation.
Opinion: Tackling Poverty, For Good?
A familiar question raised again in an op-ed – should tax policy treat all types of charitable programs the same?
In a Nonprofit Law Prof Blog post, Roger Colinvaux offers his thoughts on a New York Times op-ed written by Nicolas Kristof and Sheryl WuDunn.
Colinvaux used the piece as an opportunity to opine, “should tax policy equate a naming opportunity at a concert hall with funding a successful anti-poverty program?”
Colinvaux suggests that tax reform presents an opportunity to consider whether our tax code should be prioritizing certain types of charitable gifts over others. Accurately, he acknowledges that this is a controversial topic.
Events
CEO Retreat: Donor Advised Funds and Public Policy, Preconference in Cleveland
Attention Community Foundation CEOs:
Join your colleagues in Cleveland on Sunday October 19th from 10am to 4:30pm for a discussion about donor advised funds and tax policy.
Through our conversations with community foundation leaders and other stakeholders, we’ve heard an increasing demand for a high-level in-person meeting with community foundation leaders on how to best respond to harmful policy proposals—specifically, a proposed 5-year payout for all donor advised funds. Community foundation leaders attending the retreat will assist in developing a multi-year tax reform campaign for community foundations. The second half of the retreat will provide opportunities for robust discussion and networking.
Participation in this event is limited to community foundation CEOs.
Explore Climate Change Impacts at the Fall Conference
Are environmental issues of greater interest to you? If so, join the discussion about what community foundations can do to tackle these important issues in Cleveland on Sunday October 19th from 10am-4pm.
The Council’s Public-Philanthropic Partnership program is hosting a dynamic program on the pivotal role that community foundations can play in helping their communities confront the challenges of climate impacts. Federal scientists from universities and the federal government will join two panels of community foundation leaders to explore creating integrated systemic responses that promote resilience.
Webinar: HUD's National Disaster Resilience Competition
Join the U.S. Department of Housing and Urban Development (HUD) for a free webinar to learn about a new funding program aimed at natural disaster resilience. Wednesday, October 8, at 1 PM ET.
Communities recovering from natural disasters have an important choice: rebuild damaged areas as they were or change investments and policies to be more resilient to future environmental and economic shocks? This decision will impact how communities are able to recover from future disasters.
A new grant opportunity from the (HUD) is designed to help communities understand the implications of these choices, and how to remain resilient in the face of natural disasters for decades to come.
