Posts tagged ‘Congress’

December 21, 2015

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.

September 1, 2015

A Charity Scandal with a Surprising Twist

Yet another charity scandal has made headlines. What makes this ongoing situation startling is that the charities involved are the victims while government is the offender.

“Nearly $10 million in charitable donations by California taxpayers sat unspent in government accounts at the end of last year, The Associated Press has found, and the Senate Governance and Finance Committee chairman said Thursday that he wants a review of state accounts and will hold a hearing to find out why the money hasn’t been spent.”

Since 2005, California has collected $35 million for 29 funds. The state’s taxpayers donated the money when filing their tax returns. The money was supposed to go to a variety of charitable organizations ranging from cancer research to wildlife protection.

“’This is just embarrassing. It’s unacceptable. People expect their money to be spent for these important purposes and these delays, you know, they’re not explainable to me,’ said Sen. Bob Hertzberg, D-Van Nuys. ‘So I just learned about it, but I’m going to jump on it,’” according to the AP report.

Sadly, California is not alone in mishandling taxpayer donations to charity. For example, “New York’s top financial officer found donations languishing in its tax checkoff funds,” according to the AP.

While well intentioned, the government’s efforts to help charities have not always been efficiently or properly managed. I’m reminded of a famous quote from a former California Governor, President Ronald Reagan:

In 1986, Reagan famously said, “The nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’”

While Democratic administrations in both California and New York have mishandled money meant for charities, Democrats do not have a monopoly on making life difficult for nonprofit organizations.

While it initially looked like the Republican controlled US Congress might quickly enact certain charitable giving incentives including the IRA Charitable Rollover, the body failed to act before the summer recess. With a full legislative calendar awaiting the return of lawmakers, it’s unclear if or when the matter of charitable giving incentives will be addressed. This means that even if Congress passes measures that would benefit charities, nonprofit organizations will once again have very little time to promote those opportunities to donors prior to the end of the year.

While government can and should take steps to help the nonprofit sector, charities should not wait expectantly for assistance. Furthermore, even when assistance is promised, charities should not expect such assistance to be delivered in a timely or efficient manner.

As Doug White, Director for the Master of Science in Fundraising Management program at Columbia University, told the AP, “They are not in the business of charity. The government has its own issues.”

Another way in which government hurts the nonprofit sector is through burdensome, costly regulation that does little or nothing to protect the public interest. Such regulations divert donor funds away from the fulfillment of charitable missions.

While government action and in-action has a direct cost for nonprofits, the problem could be much greater. For example, in California, donors may now distrust the government to such a degree that they will no longer bother to designate funds for charities. Time will tell.

So, what can you do?:

July 23, 2015

IRA Rollover Poised to Make a Comeback

I have some good news.

The US Congress has begun the process to revive the Charitable IRA Rollover which expired at the end of 2014. Now, it’s time for you to take action.

On Tuesday, July 21, 2015, the Senate Finance Committee approved a number of tax extender provisions including the IRA Rollover. While the Committee considered making the IRA Rollover provision permanent, it ultimately settled on a two-year extension.

US CapitolFinance Committee Chairman Orrin Hatch (R-UT) said, “This markup [of the bill] will give the Committee a timely opportunity to act on extending a number of expired provisions in the tax code that help families, individuals and small businesses. This is the first time in 20 years where a new Congress has started with extenders legislation having already expired, and given that these provisions are meant to be incentives, we need to advance a package as soon as possible.”

Ranking Committee Member Ron Wyden (D-OR) said, “The tax code should work for, not against, Americans. We need to extend these tax provisions now in order to provide greater certainty and predictability for middle class families and businesses alike. However, as we look beyond next week, it’s critical we all recognize and take action to end this stop and go approach to tax policy through extenders.”

The House of Representatives has yet to take action though Rep. Paul Ryan (R-WI), Chairman of the Ways and Means Committee, remains interested in legislation that would make the IRA Rollover permanent. However, ultimately, the House might bring its thinking into alignment with the Senate Finance Committee. The House is expected to take up the issue as early as September.

When Democrats controlled the Congress, the IRA Rollover extensions were done a year at a time and often very late in the year. This made it challenging for both donors and nonprofit organizations to plan and to take full advantage of the provision.

With Republicans in full control of Congress, the House and Senate are considering the IRA Rollover provision earlier in the year and are considering a longer extension term. These are both good things for donors and charities.

It remains to be seen when final action will be taken and what that action will look like. It’s also unclear whether the Obama Administration will support the measure.

The Charitable Giving Coalition has long advocated for the IRA Rollover and other provisions that provide incentives for charitable giving. In addition to encouraging Congress to take action, the Coalition has sent the following letter to all Presidential candidates:

February 13, 2015

Special Report: House of Representatives Approves IRA Rollover…Again

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are usually not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

The US House of Representatives has passed a bill to renew and make permanent the IRA Rollover, a measure long-supported by the nonprofit sector. Congress approved the bill by a vote of 279-137. Of note, 39 Democrats joined with the Republican majority to ensure passage by a wide margin. The bill now moves to the Senate.

Like a similar measure passed last year, H.R. 644 — Fighting Hunger Incentive Act of 2015 includes the following components:

  • The IRA Rollover provision,
  • Extension and expansion of the charitable deduction for contributions of food inventory,
  • Enhanced deduction for gifts of qualified conservation easements,
  • Modification of the excise tax on the investment income of private foundations.

Unfortunately, President Barack Obama has once again vowed to veto the bill if it reaches his desk in its present form. The House would need 290 votes to override a veto.

Making Sausages 4 by Erich Ferdinand via FlickrThe White House opposition to the bill might be because the bill does not contain any provision that would pay for the tax breaks it would provide. The Congressional Budget Office has concluded that the bill would add to the Federal deficit.

Last year, the Democrat-controlled Senate failed to take any action on the comprehensive charitable giving incentive measure passed by the House. Now that Republicans control the Senate, there is a greater expectation of action this year. However, it remains to be seen if the bill can be modified to garner presidential support.

January 9, 2015

Are You Ready for the Coming Storm?

A storm is coming. It will affect the entire US economy. It will likely affect the global economy.

The nonprofit sector will not escape the impact. You need to prepare now.

Koyasan Umbrellas 3 by Andrea Williams via FlickrAs 2014 began to wind down, the US National Debt surpassed the $18 trillion mark! That’s over $154,000 of Federal government debt per taxpayer or more than $56,000 per citizen. During the six years of the Obama Administration, the US National Debt increased by nearly $7 trillion, representing 67 percent growth. And it’s still growing.

As if that’s not bad enough, the US Unfunded Liabilities total more than $92.5 trillion dollars, or more than $789,000 per taxpayer! It, too, continues to grow.

President Barack Obama, former-President George W. Bush, and the US Congress are all responsible for the rapid growth in the US National Debt since 2009 as well as the growth in the Unfunded Liabilities. So, I’m not going to engage in specific finger pointing, policy debates, or politics.

Instead, I want to focus on what this means for the charity sector looking forward.

The rapid growth of national debt is not sustainable. We should no longer ignore it. Here are some of the reasons why:

• While our enormous national debt is not significantly affecting the nonprofit sector at the moment, the day is coming when it will. Prudent organizations will prepare for the storm before it hits.

• At some point, failure to address the massive debt issue will lead to a downgrade in America’s credit rating. Think it can’t happen? It already has. In 2011, Standard and Poor’s cut the US credit rating to AA+ because the government “fell short” of taming the nation’s debt. In 2012, Egan-Jones cut America’s credit rating to AA for the same reason. While these downgrades have had a mostly symbolic effect, they foreshadow what is likely to happen unless the government brings the national debt under control.

• Eventually, future credit rating downgrades will make it more expensive for the government to borrow money. Interest rates will rise. That will take more money out of the economy.

• In addition to becoming increasingly costly to borrow, lending sources will be harder to find. Some of those lenders might also use the lender-debtor relationship to force US policy changes. We’ve already seen this with the China relationship. By the way, China, no longer the US, is the world’s largest economy in “real” terms of goods and services produced.

• To deal with the debt, the federal government has four possible courses of action (or some combination of these): 1) pay more to borrow more which will add to the debt and take more money out of the economy, 2) print more money which would be inflationary, 3) cut spending which would likely mean less money for the social safety net and nonprofit organizations, and 4) raise taxes which will reduce individual disposable income. So, even if the government does address the debt situation, it could have a short-term negative impact on the nonprofit sector before it has a positive effect.

• A massive, growing national debt will make it more difficult for the US economy to experience strong growth in Gross Domestic Product. Philanthropy correlates closely with GDP; it’s been about two percent of GDP for decades. If the economy doesn’t grow rapidly, philanthropy is not likely to do so. If the economy truly falters, we might even see a drop in year-to-year philanthropy as we did during the Great Recession.

We’re already beginning to see some of the effects I’ve described above. If nothing is done to tame the national debt, these effects will be magnified and could eventually become catastrophic.

There are some things that nonprofits can do to prepare:

January 2, 2015

Don’t Make New Year Resolutions You Can’t Keep

It happens every year at this time. People make New Year resolutions. Then, a short time later, they break those resolutions.

Breaking New Year resolutions is bad. Doing so can make you feel guilty. It can erode your self-esteem. If you told anyone about your resolutions, your failure to keep them could even be embarrassing.

Here’s a novel idea for 2015: Don’t make New Year resolutions you can’t keep.

Fireworks

Happy New Year from Philadelphia!

Instead of setting overly challenging goals, I encourage you to adopt the three following, easy-to-keep resolutions. While easy to adhere to, the following resolutions are nevertheless meaningful. You’ll notice that my three resolutions include something that will benefit you, something that will benefit others, and something that will benefit your organization:

 

  1. Indulge yourself. Yes, you need to take care of yourself by eating right, exercising, and getting an annual medical physical. However, you also need to let yourself be bad occasionally. You need to take care of your psyche. If that means having a slice of chocolate cake, then go for it! If it means watching old television episodes of Gilligan’s Island, so be it. If it means having your spouse watch the kids so you can enjoy a leisurely bubble bath, make it happen. By being good to yourself, you’ll be better able to be good to other people.

 

  1. Make sure those you love know you love and appreciate them. Don’t assume that those you love know it or know the extent to which you care about them. Tell them. Show them. Don’t just run for the door in the morning to rush off to work; instead, take the time to kiss your spouse good-bye. Don’t just nod when your child comes home with a good test score; instead, take the time to tell him how impressed you are. Make your partner a steaming cup of tea before she asks for it or goes to make it herself. In other words, make the most of the little moments.

 

  1. Grow professionally. One of the hallmarks of being a professional is ongoing education and sharing knowledge. So, commit to attending seminars and conferences. If time or money are obstacles, participate in a webinar; there are some excellent free webinar programs available throughout the year. Or, read a nonprofit management or fundraising book. There are some terrific books at The Nonprofit Bookstore (powered by Amazon) that will inspire and help you achieve greater results. You’ll find Reader Recommended titles, the complete AFP-Wiley Development Series, and other worthwhile items. If you have found a particular book helpful, consider sharing a copy with a friend, colleague, or your favorite charity. By the way, a portion of the sale of books through The Nonprofit Bookstore will be donated to charity.

 

(If there’s a nonprofit management or fundraising book that you read recently that you found particularly helpful, please let me know below so I can include the title in the Readers Recommended section.)

For additional reading, you might also consider looking at some of my posts that you might have missed. Here is a list of my top ten most read posts during the past year:

  1. Can a Nonprofit Return a Donor’s Gift?
  2. Delivering (My Own) Bad News
  3. 5 Things Never to Do in Your Phone Fundraising Calls
  4. One Word is Costing Your Fundraising Effort a Fortune
  5. Special Report: Top 40 Most Effective Fundraising Consultants Identified
  6. How NOT to Run a Capital Campaign
  7. Cheating Death
  8. #GivingTuesday Has NOT Made a “Huge Difference”
  9. 5 Lessons Moses Can Teach Us about Fundraising
  10. 20 Factoids about Planned Giving. Some May Surprise You.

I invite you to read any posts that might interest you by clicking on the title above. If you’ve read them all, thank you for being a committed reader.

I’m honored to know that I have readers from around the world. (I love the Internet!) While I appreciate all of my readers, I thought it would be interesting to look, beyond the United States, to see my top ten countries for readership:

December 16, 2014

Special Report: Congress Passes the Charitable IRA Rollover

At 7:32 PM (EST) this evening, Dec. 16, 2014, the US Senate passed HR 5771, the bill that retroactively extends several tax provisions, including the IRA Rollover. The law will expire on Dec. 31, 2014, without any grace period. However, it’s important to note that the measure will not become law until signed by President Obama, which is expected.

While approval of the IRA Rollover is good news, it unfortunately comes extremely late in the year. This means most nonprofit organizations will be unable to fully take advantage of the provision. Nevertheless, there are a couple of simple actions you can take:

  1. Look at your donor file to see which individuals have made gifts from an IRA in the past. Then, call those donors to let them know of the opportunity for 2014, assuming President Obama signs the measure. At the very least, email those donors.
  2. Email all of your older donors to alert them to the opportunity for them to give from their IRAs. Even if they don’t take advantage of the IRA Rollover, they’ll appreciate that you informed them about this late breaking news.

December 7, 2014

Special Report: House of Representatives Approves IRA Rollover

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are usually not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

On Wednesday, Dec. 3, the US House of Representatives passed a short-term tax extenders bill. The bill extended certain tax provisions for 2014, including the IRA Rollover, a provision long supported by the nonprofit sector. The package would cover 2014 but NOT apply to 2015 or beyond. The bill now goes to the Senate.

US Capitol by Glyn Lowe Photoworks via FlickrSen. Harry Reid (D-NV) has questioned whether the Senate will have time to pass the House bill before the end of the year. However, Sen. Ron Wyden (D-OR), Chair of the Senate Finance Committee, and the White House have shown a willingness to move forward with this one-year retroactive fix, according to Jason Lee, General Counsel at the Association of Fundraising Professionals.

For more information about the bill, click through to:

The Hill“House Approves Slate of Tax Breaks”

The Hill“Reid Indicates Senate Might Not Pass House Tax-Extender Bill”

The sad reality is that even if the tax extenders bill passes the Congress and is signed by Pres. Obama, there is precious little time for charities to take advantage of the IRA Rollover provision in 2014.

December 5, 2013

Special Report: No Tax Reform Bill in 2013

[Publisher’s Note: “Special Reports” are posted from time-to-time as a benefit for subscribers and frequent visitors to this blog. “Special Reports” are not widely promoted. To be notified of all new posts, including “Special Reports,” please take a moment to subscribe in the right-hand column.]

 

A tax reform bill will not be introduced in the US Congress before the close of 2013, House Ways and Means Chairman Dave Camp (R-MI) indicated to The Hill.

US Capitol by Kevin Burkett via FlickrGiven that this is the first week of December and that House Republicans plan to leave Washington at the end of next week for the holiday break, the news is not surprising, even while important.

As soon as one month from now, the House could resume wrangling over a possible tax reform bill, according to Jason Lee, General Counsel for the Association of Fundraising Professionals. However, while the issue will be on the table in 2014, it will be a major challenge for Congress to move something as significant as a tax reform bill with the mid-term elections looming in November.

October 8, 2013

Survey Respondents Overwhelmingly Express Concern over Government Shutdown

The vast majority of nonprofit professionals (63 percent) responding to an unscientific Michael Rosen Says… survey say that they expect the US government partial shutdown will negatively affect their nonprofit organization or they are concerned it might.

Worry by spoo0ky via FlickrThe shutdown affects nonprofits in a variety of ways. Organizations that rely on government grants have seen those grant payments delayed or withheld. Organizations that do government contract work are seeing payments delayed. Organizations that assist individuals in need are seeing an increased demand for their services.

In addition to those negative effects, 28 percent of survey respondents expect the government’s partial shutdown will result in less philanthropic support this year.

Interestingly, 67 percent of survey respondents expect that the shutdown will hurt the nation’s economy. Because overall philanthropy closely correlates to the country’s Gross Domestic Product, at a rate of approximately two percent, we can expect overall philanthropy to be negatively affected if the shutdown slows the already weak economy.

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