Government Relations
Legislative Update June 30, 2010
Welcome to the Partnership's Legislative Update highlighting national legislative issues of interest to charitable gift and estate planners.
After a series of contentious votes
in the Senate over the past couple of weeks in which Democratic leaders failed
to garner 60 votes for a motion to invoke cloture or otherwise set a limit on
debate, Senate Majority Leader Harry Reid (D-NV) officially pulled House-passed
extenders legislation (H.R. 4213) from the Senate floor. This legislation is the
vehicle for a year-long retroactive extension of the IRA Charitable Rollover.
Democratic leaders have not yet articulated a plan for how they will address
extenders later in the session, but Senator Reid has indicated that the package
will remain intact and none of its provisions will migrate to other legislation.
Now that both the House and Senate have approved
versions of financial reform legislation, a
House-Senate conference committee has been
meeting to reconcile the many differences
between the two bills. Importantly, the
conference report on the legislation includes
language advocated for by the Partnership and
several other nonprofit organizations that would
exempt all “activities relating to charitable
contributions” from the jurisdiction of a new
consumer financial protection agency. The
Partnership and its coalition members recently
wrote to conferees to ensure this language
remains in the final legislation.
The Senate has begun consideration of small
business tax and lending legislation, which
could potentially serve as a vehicle for an
estate tax amendment from Senators John Kyl
(R-AZ) and Blanche Lincoln (D-AR). Such an
amendment, if allowed to be offered, would
reinstate the estate tax in 2011 with a $5
million individual exemption and a 35 percent
rate. Final passage of the small business
legislation will not take place until mid-July
at the earliest.
Representative Betty McCollum (D-MN) introduced
the Nonprofit Sector and Community Solutions Act
(H.R.
5533), which would create a National
Nonprofit Council composed of representatives of
nonprofit groups, foundations, businesses, and
state, local, and federal governments that would
offer formal recommendations to Congress as well
as a working group of high-level representatives
from federal agencies who would discuss ways to
improve relations with nonprofit groups and
evaluate recommendations from the new nonprofit
council. The legislation has been referred to
several House committees for review, and
Representative McCollum is currently working to
solicit cosponsors.
The IRS Exempt Organization Division has
launched a charitable spending initiative during
the rest of this fiscal year, which will explore
the sources and uses of charitable funds and
their relationship to the accomplishment of
charitable purposes. The first phase of the
project is expected to focus on organizations
with unusually high fundraising levels and
organizations reporting high levels of unrelated
business activity but low levels of program
services.
As part of the ongoing paperwork reduction
process, the IRS is soliciting
comments concerning the existing final
regulation on substation of charitable
contributions. Written comments should be
received on or before August 16, 2010.
The IRS Advisory Committee on Tax-Exempt and
Government Entities released a
report containing recommendations on a
number of charitable issues such as executive
compensation for charities, the IRS's
determination letter program, and improvements
to the voluntary closing agreement program for
tax-exempt, tax credit, and direct-pay bonds.
Giving
USA announced that estimated charitable
contributions in 2009 fell to $303.75 billion,
down from 315.08 billion in 2008. This drop
represents a fall of 3.6 percent in current
dollars, but because the overall economy saw
slight price deflation, the adjusted change in
giving from 2008 to 2009 is actually a decline
of 3.2 percent. The Giving USA figures calculate
total charitable giving by more than 75 million
households across the United States, more than 1
million companies, an estimated 120,000 estates,
and about 77,000 foundations. A second report by
the
Center on Wealth and Philanthropy at Boston
College suggests that individual charitable
giving in 2009 amounted to $217.3 billion, a
decline of $11.2 billion or 4.9 percent from the
estimated $228.5 billion total in 2008. This 5%
decline is in addition to the 6 percent decline
that the Center calculated for 2008. The full
report will be published in the July/August 2010
issue of Advancing Philanthropy, published by
the Association of Fundraising Professionals.
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