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Incentives for Charitable Giving

Posted By Adam Donaldson, Thursday, October 20, 2011

October 2011

By Adam Donaldson

On October 18, 2011, the United States Senate Committee on Finance held a hearing on Incentives for Charitable Giving. Witness testimony focused on the charitable deduction program for tax payers who itemize because several recent legislative proposals have aimed to cap this giving incentive.

And ABAG was watching.

As the voice of philanthropy, engaging in critical dialogue with local, state and national government officials who shape public policy, ABAG monitors news and legislation on the charitable deduction and other policies that promote philanthropy and build stronger communities.

Why is this important for ABAG members?

We believe tax incentives for charitable giving are critical at a time when nonprofit organizations struggle to meet increased demand for their services resulting from the economic downturn, and ABAG has urged Congress to support charitable giving by opposing current proposals to cap the charitable deduction for federal taxpayers. This view was expressed in Betsy’s weekly "Adventures in Philanthropy” column in the Daily Record.

I am excited to announce that the Board of Directors recently approved new protocols for when ABAG will make public statements and engage in public policy strategies on behalf of members, as recommended by the Public Policy Task Force, chaired by Mary Louise Preis. The protocols set criteria and a process that includes the leadership of staff and the Executive Committee. 

We appreciate that members are independent entities who may act on their own or hold a variety of opinions regarding policy issues, but affirm ABAG’s critical role in representing your interests.

To learn more about ABAG’s public policy work, I invite you to our new menu of website pages:

· ABAG’s Public Policy Role

· Public Policy Updates

· Grantmaker Resources

· PolicyWorks

In particular, ABAG will use the Public Policy Updates page to share timely information about policies we are tracking. I hope you will contact me with any questions related to ABAG’s public policy work or the issues of the day.

At present, Congress is not moving forward with changes to the charitable deduction program, but it remains a hot topic, and when appropriate ABAG will update members on this and other important policies related to philanthropy.

Tags:  Eye on Philanthropy  October 2011 Members' Memo  Public Policy 

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We Must Engage in Public Policy

Posted By Kim Snipes, Tuesday, February 15, 2011
Updated: Wednesday, July 6, 2011
Given ‘tis the legislative season, ABAG invited Mary Louise Preis to be our first ABAG member to blog in the new Members’ Memo feature "And Now, A Word From Our Members.”

Mary Louise, of theFrederick G. & Mary Louise Preis Charitable Gift Fund,chairs the ABAG Public Policy Task Force, and as a funder and former elected Member of the House of Delegates, she has a unique view on government relations and public policy.

Sometimes when we hear "public policy” our eyes glaze because the issues seem far removed, too complex, too vague, or too risky. The problem is however that there are consequences for not engaging.

All around us we witness the effects of the economy on government budgets and the under-funding of nonprofits that deliver critical public services. Philanthropy does not have the treasure to meet government’s expectations and fill the gap. Now the President’s 2012 budget proposal released February 14 includes two measures directly affecting philanthropy as a sector.

First, the budget would limit the rate at which high-income taxpayers may claim itemized deductions to a maximum of 28 percent, regardless of their marginal tax rate. Second, the budget would create a single, 1.35 percent excise-tax rate on investment income of private foundations, replacing the current two-tiered excise rate structure (click here for more details). Government will continue to reexamine philanthropy as a revenue source.

While many funders are worrying about specific issue-based policies, there does not appear to be a shared vision for the role of philanthropy and government. How much partnership or independence should be sought? Should we support needs that up to now have been the objects of public, taxpayer support? Advocates and lobbyists for most big organizations, even big non profits, have become pretty good at influencing policy. But before they can be effective, they must know what they need or want to accomplish. Philanthropy must get started thinking about what it wants and what it thinks is workable, if it is to be drawn more into partnerships to help meet society’s needs.

Usually we are told that those with the gold make the rules. But, maybe not. And likely not, if those with the gold don’t know what rules they prefer.

So I ask all of you, my ABAG colleagues, what messages should ABAG carry to legislators when participating in Foundations On the Hill in March? What issues would you like leadership on from the ABAG Public Policy Task Force?

I invite and encourage your thoughts below.

Mary Louise can be reached at:

Tags:  And Now A Word from Our Members  budget  engagement  legislative  President Obama  public policy  taskforce 

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In 2011 Build Awareness of Your Good Work

Posted By Adam Donaldson, Wednesday, January 19, 2011
Updated: Tuesday, July 5, 2011

ABAG's Eye on Philanthropy is a series of ongoing blog posts from ABAG's professional staff, each highlighting timely and relevant information useful to our grantmaking members and focused on the world of philanthropy. 

By Adam Donaldson, ABAG's Member Services Director

I used to mark anonymous on the pledge form with a charitable gift to my high school so I would not be listed in the alumni bulletin. Anonymity seemed to infuse the donation with sincerity; plus my mom always warned me that I would start to be solicited by the American Heart Association and then my name sold to the American Deputy Sheriffs' Association who would call during dinner. She was right. Moms always are.

But now I have caller ID, and what Mom later acknowledged is that my gift motivated her to give as well. Now I tell anyone who will listen what charities I support and why I care about their work. On an individual scale, each name listing and conversation ignites interest in my causes and inspires more giving.

On the scale of institutional philanthropy, the same lesson leverages investment in the work of ABAG members and aligns partners to maximize community impact. I am convinced that grantmakers should share stories of their generosity and grantmaking strategies. Stories can help spread promising practices, earn champions, attract new ideas, and encourage more philanthropy.

ABAG has always worked with members to promote their good work. We channel these stories through news media and our own:

• "Adventures in Philanthropy” column in The Daily Record, and Blog
Philanthropy News Online newsletter to the community
Facebook and Twitter

Now, as Congress and our own Maryland General Assembly return to the trenches to wrestle with record deficits (MD $1.6 billion) and the national debt (now $14 trillion), there is arguably greater need to promote understanding of philanthropy and showcase the work of local grantmakers. Legislators are hunting money and anxiety permeates the nonprofit and foundation community. Organizations are not only fearful of public funding cuts to their programs, but also of attempts to tax tax-exempt organizations and to reduce charitable giving incentives.

A proposal last year to tax hospital and university "beds” in Baltimore is one example of many new taxes and fees proposed across the country. You can find a list being monitored by The National Council on Nonprofits on their website here.

Potentially a more significant change, the Obama Administration announced intentions to overhaul the national tax code – including eliminating or reducing charity incentives. Many economists and thought leaders have long debated the efficacy of the tax deduction for charitable giving. In the New York Times article, "It’s Time to Rethink the Charity Deduction,” Richard Thaler explains some of the nuts and bolts behind the debate. The President has twice targeted the charity deduction already in his federal budget proposal, seeking to limit the value of charity deductions for households earning more than $250,000, which Indiana University estimates would reduce nonprofit funding by $4 billion.

In March, ABAG will seek to inform and educate Congress about philanthropy as participants inFoundations on the Hill. Several times a year we reach out to federal, state, and local government offices to build understanding of the sector and lay the connections for partnerships with our members. In the past year, ABAG has also emphasized "Conversations with” public leaders to introduce decision makers to the grantmaking community.

Research conducted by the Philanthropy Awareness Initiative found that only one in ten influential Americans can identify a foundation’s impact on an issue they care about. It is vital to educate legislators about the role of nonprofit organizations and philanthropy in society.

ABAG will continue to monitor legislation affecting philanthropy and nonprofit organizations and inform members on a timely basis, and we will strengthen our efforts to inform the public about these issues – as you can see in our latest "Adventures in Philanthropy”. I hope one of your New Year’s resolutions will be to step away from anonymity and help build awareness of your good work - and we are here to assist you in your efforts.

Question:  What role do you think ABAG should play in response to the current threats to nonprofit funding?  We invite your input below!

Adam can be contacted with questions at:

Adam Donaldson
Member Services Director
410.727.1205 ext. 1206

Tags:  advocacy  congress  Eye on Philanthropy  incentives  legislative  lobbying  public policy  stories  tax 

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