Breaking News: Charitable Giving Incentives Made Permanent!

The US Congress has approved and President Barack Obama has signed the so-called Tax Extenders package that not only includes a number of charitable giving incentives, such as the IRA Charitable Rollover, it has made those incentives permanent.

An article in Forbes, prior to passage of the legislation, nicely outlines the measure’s major provisions including the key charitable giving incentives:

  • deduction allowed for charitable contribution of real property for conservation purposes,
  • taxpayers over age 70 1/2 may make donations directly from an IRA and will not be taxed on the amounts (up to $100,000),
  • a shareholder in an S corporation will be required to reduce his basis in the S corporation’s stock under Section 1366 only for his share of the basis of property contributed by the S corporation; not the fair market value.

This is a tremendous moment for the nonprofit sector. Not only have these important giving incentives been renewed, they have been made permanent!

We all owe thanks to the staff and volunteers of the Association of Fundraising Professionals, particularly General Counsel Jason Lee. AFP has taken the lead in fighting to get these giving incentives and making them permanent.

Santorum and MJR

Sen. Rick Santorum (R-PA) and Michael J. Rosen on Capitol Hill.

For more than a decade, I’ve worked with my AFP colleagues, first as a member of the US Government Relations Committee, then founding Board Member of the AFP Political Action Committee, and then as Board Chairman of the AFP PAC.

Our efforts date back to assisting with the drafting of the CARE Act with then-Sen. Rick Santorum (R-PA). The bill was co-sponsored by then-Sen. Joe Lieberman (D-CT). Despite the bipartisan effort, the CARE Act failed to pass. However, certain charitable giving incentives that were part of the CARE Act were adopted, on a year-to-year basis, including the IRA Charitable Rollover. It took a decade but, finally, the incentives are now permanent!

I’m proud to have been able to play a significant role on this issue. I’ve enjoyed working with other passionate volunteers and staff.

We also need to take this opportunity to thank The Charitable Giving Coalition and its member organizations along with every individual who has worked for this legislation.

Let’s take a much deserved victory lap! Let’s do an end-zone dance! Let’s toast this achievement! Then, let’s get back to work. There’s much to be done to promote the giving incentives.

To help you promote the IRA Charitable Rollover, The Council on Foundations has put together an excellent free, downloadable toolkit that includes:

  • Talking points, a fact sheet, and web content;
  • An event presentation;
  • Tools that explain which available options might best serve donors;
  • Donor and professional advisor advertisements.

You can download the Council’s “Charitable IRA Worksheet” for donors by clicking here. You can find the full toolkit by clicking here.

As your organization and its donors benefit from the recently legislated charitable giving incentives, I hope you’ll remember that these incentives did not just happen. They were the result of many years of dedicated effort by many individuals and organizations. In addition, I hope you’ll also remember that much work remains to be done on the government relations front where philanthropy is concerned. I encourage you to do your part.

One fresh challenge for the nonprofit sector is the new proposal from the Internal Revenue Service that would encourage charities to collect the Social Security numbers of donors of $250 or more. This could have a chilling effect on philanthropy and could force charities to spend a fortune to upgrade data security systems. You can find my report about this by clicking here.

The IRS requested public comments about its proposal. I’m told they have received 38,000 responses. That’s a big number for this type of proposed, narrow regulation. I thank everyone who answered the call to comment.

While it will be sometime before we know what action the IRS will take, the nonprofit sector has certainly made its voice heard. We need to maintain that momentum on this and other issues. The recent success with the charitable giving incentives proves that when we work together, diligently and tirelessly, the nonprofit sector can achieve great things.

That’s what Michael Rosen says… What do you say?

UPDATE (Jan. 7, 2016): The IRS has officially withdrawn its proposed regulation. You can learn more by reading my post “The Nonprofit Sector Wins a Battle with the IRS!”

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5 Responses to “Breaking News: Charitable Giving Incentives Made Permanent!”

  1. What do I say? I say a great big thank you to you and the Charitable Giving Coalition. Making these provisions permanent makes it so much easier to plan with donors and give them clear options that are best for their own situations.

    • Mary, thank you for your thank you. For the past two years, Congress has given us a matter of days to take advantage of the IRA Charitable Rollover. With such little time, other giving incentives were even more difficult to leverage. Now, fundraisers, advisors, and donors will finally be able to plan. This is a very good thing. I hope we see Congress following this model on other issues. Greater certainty and giving folks the opportunity to plan will help strengthen the economy which, in turn, will help boost philanthropy.

  2. I received an email from Russell A. Willis III, JD, LLM of Planned Giving Design Services. He made a good point about the new legislation. With his permission, here is what he wrote:

    “The incentive for contributions of appreciated property for conservation purposes is considerably stronger than ‘deduction allowed.’ The deduction limit is increased to 50 percent — or, in the case of ‘agricultural’ property, 100 percent, and the carryforward is extended to 15 years. Let’s be open about this kind of stuff, and let’s be willing to openly discuss why these incentives make sense.”

    While the IRA Charitable Rollover provision is capturing headlines, the new legislation creates other terrific opportunities that should definitely not be ignored. Thank you, Russell.

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