Washington Snapshot - October 31, 2014
Election Day is next Tuesday, November 4th. Get out the vote!
News from the Hill
Homestretch on The America Gives More Act
The midterm elections are here, which means Congress returns to D.C. in less than 2 weeks. After they return on November 12, your members of Congress will only have about three work weeks remaining in the year.
The America Gives More Act is the most significant bill for the charitable sector in years. The bill has already passed the House and the Senate has signaled strong support for several of its provisions. This means we have a genuine opportunity to get lawmakers to include the bill in the tax extenders package expected to be enacted before the end of the year.
But it’s critical that foundations step up to urge lawmakers to include the America Gives More Act in any tax extenders package they consider during the last few weeks of the year!
Join your colleagues in the field in speaking out. This week, we’re highlighting an op-ed by Phil Hanson, President and CEO of the Truman Heartland Community Foundation. Hanson explains why the bill is so important: “A strong nonprofit sector is an important part of the solution to address the ongoing needs in our communities . . . We hope our lawmakers understand the impact that nonprofits are making in our communities every day through the generous support of charitably minded citizens in the community,” he said.
The Donor’s Forum of Illinois has also drafted two sign-on letters that they will send to the Illinois congressional delegation asking for their support for the America Gives More Act. There is a letter for private foundations from Illinois, along with a version for all other Illinois nonprofits to sign.
Taking action can be as simple as sending an e-mail to your lawmakers asking for their support for the bill. The Council has created draft e-mail language to assist you, which includes links to contact information for each congressional office.
For more information or questions, please contact Policy Analyst Katherine LaBeau.
Post-Election Analysis Webinar
Election 2014 - How Beltway Politics Shape the Legislative Outlook
Join us on Friday, November 7th from 1:00-2:00 pm ET as we get a run-down of 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? Washington insiders 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.
Executive & Regulatory News
Form 990 Changes for 2014 - Schedule A
Schedule A of the IRS Form 990 is used to calculate and document the public support test for foundations and other tax exempt organizations. There are numerous changes to Schedule A of Form 990 for 2014 that we want to share with our readers. Our Legal Affairs team is delving into these changes to better understand how they will affect you. In the meantime, here are the basics on what has changed:
- The revised Schedule A adds a new
aPart IV, “Supporting Organizations,” and a new Part V, “Type III Non-Functionally Integrated 509(a)(3) Supporting Organizations.” All supporting organizations must complete the new Part IV. The questions in this section are a checklist for determining whether a supporting organization meets the organizational and operational tests of section 509(a)(3). - Type I organizations must also complete Part IV, Section B: Type I Supporting Organizations, and Type II organizations must complete Part IV, Section C: Type II Supporting Organizations. These sections give supporting organizations an opportunity to explain how they satisfy the relationship test.
- Type III supporting organizations must complete Part IV, Section D to demonstrate that they meet the notification requirement, responsiveness test, and significant voice test. There are additional, separate reporting requirements for Type IIIs depending upon whether they are functionally or non-functionally integrated.
As always, our Legal Affairs team is on hand at legal@cof.org to answer any questions or concerns you have.
Trending in Legal Affairs
Halloween Edition: Grants to Cemeteries
A gift planning officer, to her horror, was asked a question she couldn’t answer. A potential donor, moved by the spirit of past family members, inquired about grants for cemetery maintenance. The donor asked whether the foundation could use a new fund to make annual grants for maintenance of the donor’s family plot. In the interest of avoiding a taxable expenditure, this officer sought to unearth an answer to exorcise the tyranny of the ghoulishly-dense tax code.
In this situation, who you gonna call? The Council’s Legal Affairs team! No divination was required to conclude that the foundation had a ghost of a chance to avoid a penalty if they allowed this annual grant. Generally, a fund at a community foundation may make grants to nonprofit cemeteries for public purposes, such as maintaining the historical or educational value of the cemetery. The IRS has specifically said, however, that grants for the maintenance of individual family plots is not charitable and therefore not a proper grant.
This question was laid quietly to rest.
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
Urban Institute hosts Panels on "Increasing Philanthropy through Policy and Practice"
On Wednesday, we attended a thought-provoking Urban Institute event on “Increasing Philanthropy through Policy and Practice.” Two separate panels of philanthropy experts, foundation leaders, and economists discussed how to increase philanthropic giving through making better use of existing giving vehicles and making tax policy changes.
Moderated by Cindy Lott of Columbia University, the first panel discussed how extending the charitable deduction to April 15th could increase charitable giving. Economist Joseph Cordes applied principles of behavioral economics to discuss how we can predict how people would react to the new deadline. Urban Institute Fellow Gene Steuerle contended that an April 15th deduction deadline would result in up to $4 in charitable giving for every $1 in tax revenue lost to the government.
Sandra Swirski of the Alliance for Charitable Reform explained that some members of Congress are concerned about the price tag associated with the proposal—up to $2 billion in the first year, according to the Joint Committee on Taxation. Yet, she pointed out that this proposal isn’t going away, since there is “real buy-in” from many House members.
Alan Abramson of George Mason University moderated the second panel of the day on philanthropic giving tools. Victoria Vrana of the Gates Foundation began the panel by talking about the value of metrics to measure philanthropy’s progress. Then Una Osili of the Lilly Family School of Philanthropy explained the data she collects and analyzes to help inform the field. John Porter of ACT for Alexandria followed, offering a local perspective on how his community foundation is working to build relationships across the community through the use of a citizen engagement website.
The overarching theme of Sue Santa’s comments was certainty. She emphasized that one of the underlying issues with increasing philanthropic giving is the uncertainty foundations and individuals face with tax policy. Finally, Lorie Slutsky of The New York Community Trust helped the audience better understand the history of donor advised funds (DAFs), explaining that the first DAF was created at The Trust in 1931. She also illustrated how DAFs can be an entry point for people to become more engaged in their communities.
