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Stay informed on news and legislation affecting philanthropy and nonprofit organizations via ABAG's Public Policy Updates blog. Here ABAG also announces current position statements and policy work undertaken on behalf of members and the philanthropic sector.

 

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Top tags: tax  deduction  public policy  charitable deduction  Adventures in Philanthropy  IRA  excise-tax  Foundations on the Hill  general assembly  House Ways and Means  Maryland Nonprofits  Charitable Tax Deduction  Council on Foundations  position statement  Washington  Protect Giving  America Gives More Act  Charitable Giving  Charitable Giving Coalition  FOTH  IRS  September 2013 members' Memo  Sequestration  Shutdown  april 2014 Members' memo  April 2015 Members' Memo  community foundations  Cultural Programs  Education  forum 

Dear IRS, We Do Not Want to Collect Social Security Numbers

Posted By Administration, Friday, December 11, 2015
Updated: Thursday, December 10, 2015

On December 11, 2015, the Association of Baltimore Area Grantmakers provided a public comment to the Internal Revenue Service (IRS) in opposition to a proposed regulation called the Substantiation Requirement for Certain Contributions (REG-138344-13). That is not something we do every day.

Read what concerns us below and learn how to add your own voice to prevent the proposed regulation affecting individual charitable contributions.

The IRS is proposing a voluntary reporting program encouraging nonprofits to ask for, store and protect donor Social Security numbers. The proposed regulations would give nonprofits the option of filing a separate new information return with the IRS and individual donors by February 28 every year to substantiate contributions of more than $250 in value. A mandatory proposal was considered and rejected in the past based on numerous legal, policy and confidentiality problems.

As an organization dedicated to promoting philanthropy, ABAG is deeply concerned that the regulation would decrease charitable giving and create mistrust between the public and nonprofit organizations. First, it will not take long for scam artists to pretend to be nonprofit organizations and obtain Social Security numbers for their own fraudulent purpose. Second, individuals have been told by the government itself to NOT share their Social Security number, and small charities do not have the technology or training to safeguard personal information. Hackers will soon be targeting nonprofit organizations.

Commenting on proposed regulations is not considered lobbying by the IRS. If you do not want to share your Social Security number with the charities you support as an individual and sense immediately the potential harm to communities from reduced giving, you can submit comments easily online.

Learn more from our partner the National Council of Nonprofits about the proposed regulations and what you can do to take action against it on behalf of donors, nonprofit organizations and the public.

What can you do?
The IRS is asking for comments on the proposal by December 16. To submit comments go to the IRS website at http://www.regulations.gov/#!submitComment;D=IRS-2015-0049-0082

Tags:  IRS  Social Security number 

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Applications for Tax-Exempt Status Double in 2014

Posted By Adam Donaldson, Wednesday, April 8, 2015

April 8, 2015

By Adam Donaldson, ABAG Member Services Director

The IRS approved more than 110,000 applications for tax-exempt status in 2014, more than doubling the number (44,274) approved the previous fiscal year, according to a new report.

At the Association of Baltimore Area Grantmakers, we wish we could say that the growth was caused by a spike in philanthropy and the establishment of many new foundations! It could be partly true, but the IRS attributed the spike to both a new Form 1023-EZ used by 20,103 smaller entities and a related almost-automatic approval process for other application forms. To apply for exempt status using Form 1023-EZ, the applying organization must have less than $50,000 income (annual gross receipts) for each of the next three years.

We also wish we could say that the growth in nonprofit public charities was caused by a surge in goodwill and commitment to social services. Perhaps, but the National Council of Nonprofits attributes the spike to lessoning standards and the failure of the IRS to appropriately vet applications to create new nonprofits. The federal Taxpayer Advocate warned Congress that the new approach amounts to the "IRS’s abdication of its responsibility to determine whether an organization is organized and operated for an exempt purpose.”

Funders may welcome innovation, new ideas and new people to nonprofit leadership, but they also remain deeply concerned about unnecessary duplication of effort and the dispersion of charitable resources – both money and people.

One report is not a trend, but the Association of Baltimore Area Grantmakers will continue to monitor Form 1023-EZ and work with Maryland Nonprofits and the National Council of Nonprofits on IRS policies that work for its members and for our mission to improve communities through effective philanthropy.

Tags:  April 2015 Members' Memo  IRS  Nonprofits  Public Policy  Tax Exempt Status 

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Foundations on the Hill 2015 #FOTH – Keep to the Code

Posted By Adam Donaldson, Friday, March 13, 2015

March 13, 2015

By Adam Donaldson, ABAG Member Services Director

On March 18-19, the Association of Baltimore Area Grantmakers (ABAG) heads to Washington, DC for Foundations on the Hill (FOTH) to remind Congress of the importance of philanthropy to their communities and the importance of the tax code to philanthropy.

Hosted by the Forum of Regional Associations of Grantmakers, in partnership with the Council on Foundations, FOTH is a two-day event that brings foundation leaders to DC to communicate with Congress about key issues of importance to foundations and philanthropy. This year more than 180 participants are expected from 30 states.

Foundations and their grantee nonprofit organizations are created under the tax code. In return for tax relief, our organizations have pledged to work for a charitable purpose.

As Congress considers both individual changes to the code and comprehensive tax reform, ABAG pays attention. And, Congress has proposed changes to the private foundation excise tax, IRA charitable rollover, donor-advised funds and more. Changes to the tax code can enhance and expand the work of philanthropy. Or, they can hinder philanthropy and consequently, hurt the communities we serve. Congress must consider the implications of changes to the code on philanthropic and charitable organizations.

ABAG encourages members interested in federal policy affecting philanthropy to get connected with our Public Policy Committee; live updates from Foundations on the Hill can be viewed on Twitter using #FOTH15.

Special notice: The language of the Treas. Regulation 53.4945-2(d)(3) confers the self-defense exception to private foundations for communications with a legislative body regarding legislation that affects the "existence of the private foundation, its powers and duties, its tax-exempt status or the deductibility of contributions to such foundation."

 

Jack Sparrow: I thought you were supposed to keep to the code.

Mr. Gibbs: We figured they were more actual guidelines.

Pirates of the Caribbean: Curse of the Black Pearl

Tags:  Charitable Tax Deduction  FOTH  March 2015 Members' Memo  Public Policy 

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Tax Policy Remains on the Congressional Agenda

Posted By Adam Donaldson, Monday, February 9, 2015
Updated: Monday, February 9, 2015

February 9, 2015

By Adam Donaldson, ABAG Member Services Director

Tax policy remains on the Congressional agenda in Washington, DC that will positively impact charitable giving and foundation grants.

On February 4, 2015, the House Ways and Means Committee passed several bills that incentivize giving. The bills include making permanent charitable "tax extenders," such as the IRA charitable rollover and simplifying the private foundation excise tax on investment income to a single rate of 1%. The House of Representatives is likely to bring a bill for a vote as early as Wednesday, February 11, 2015.

The Association of Baltimore Area Grantmakers joins other regional associations of grantmakers, the National Council of Nonprofits and Council of Foundations in its supportof these policies.

In particular, ABAG believes simplifying the private foundation excise tax is a commonsense policy that should be passed. Private foundations are required to pay an annual excise tax on their net investment income equal to either 2% or 1%. The two-tier, or different rate, system unfortunately creates a disincentive for foundations to give more grants to nonprofits and expends time and money working with accountants rather than communities in need of help.

When ABAG asks its foundation members about the tax, they share an acceptance of a tax, but bemoan the uncertainty and complex calculations that the tier system sparks each year. Their experiences confirm that a tiered tax discourages larger grants in response to emergencies, natural disasters, or great opportunities. The current system also delays funds reaching nonprofit organizations until end of year calculations.

Here is a full list of the charitable bills passed by the Committee:

  • H.R. 637, "To amend the Internal Revenue Code of 1986 to make permanent the rule allowing certain tax-free distributions from individual retirement accounts for charitable purposes."
  • H.R. 640, "To amend the Internal Revenue Code of 1986 to modify the tax rate for excise tax on investment income of private foundations."
  • H.R. 644, "To amend the Internal Revenue Code of 1986 to permanently extend and expand the charitable deduction for contributions of food inventory."
  • H.R. 641, "Conservation Easement Incentive Act of 2015."

Between Republicans and Democrats and the House and the Senate, there will be debate about the cost of the tax expenditures and whether the policies should be considered independently now or part of comprehensive tax reform. These larger debates are important and not to be ignored, but ABAG’s role in the process is to keep promoting good policies that support charitable giving.

Last week, the House Ways and Means Committee agreed in support of charity.

Stay informed on legislation affecting philanthropy and nonprofit organizations via ABAG's Public Policy Updates blog, where ABAG also announces current position statements and policy work undertaken on behalf of members and the philanthropic sector.

Tags:  Charitable Tax Deduction  Public Policy  Tax Policy 

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Maryland Nonprofits 2015 Legislative Preview

Posted By Adam Donaldson, Monday, January 5, 2015
January 5, 2015
 
By Adam Donaldson, ABAG Member Services Director
 
 
Whether you can commit to the whole day or not, this annual event is the best opportunity to demonstrate our collective commitment to the charitable sector and to learn about key issues for nonprofit organizations in the upcoming Maryland General Assembly.
 
During the special afternoon dialogue on Public Health Equity, I am excited to announce the participation of the Maryland Environmental Health Network, a project housed here at the Association of Baltimore Area Grantmakers.

Here's a first-hand look at the highlights for the 2015 Legislative Preview on January 12th at the Howard County Conservancy in Woodstock, MD.
 
Space is limited, You can register here

Tags:  Legislative  Maryland Nonprofits  MdEHN  Public Policy 

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Tax Advocacy for Remaining Days of Congress

Posted By Adam Donaldson, Tuesday, November 25, 2014

Nonprofit and foundation advocates continue outreach to Members of Congress to include the provisions of the America Gives More Act, H.R.4719, in any tax bill that Congress will consider before the end of this year. America Gives More Act previously passed the House of Representatives. The most likely scenario for these polices to move forward is within general budget or tax legislation. The provisions sought are to:

  1. Permanently extend the IRA charitable rollover.
  2. Allow individuals to claim a charitable deduction for contributions made up to the date their income tax return is due (April 15).
  3. Eliminate the upper tier excise tax and reduce the excise tax on investment income of private foundations from two to one percent.
  4. Make permanent the enhanced deduction for property donated for conservation easements.
  5. Make permanent the enhanced charitable deductions for food inventory.

ABAG’s national network, The Forum of Regional Associations of Grantmakers, joined the National Council of Nonprofits, Independent Sector, Feeding America, Land Trust Alliance, and Council on Foundations in sending an advocacy letter and meeting with the House and Senate leadership.

Click here to reach the letter from these nonprofit and philanthropic leaders.

Tags:  America Gives More Act  iexcise-tax  IRA 

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Stand for Your Mission

Posted By Adam Donaldson, Friday, October 17, 2014

Proud to announce the Forum Network’s, our national network of regional associations of grantmakers, participation in the Stand for Your Mission campaign. Resource attached!

www.standforyourmission.org

On October 9, 2014 at the BoardSource Leadership Forum, Anne Wallestad, BoardSource president and CEO, announced the launch of the Stand for Your Mission campaign to more than 800 nonprofit leaders from across the country. This new campaign is designed to unleash the full potential of nonprofit organizations to advance their missions in their local communities by engaging board members more directly in the advocacy work of their organizations.

Initiated by BoardSource and created — together with the Alliance for Justice, the Campion Foundation, the Forum of Regional Associations of Grantmakers, the John S. and James L. Knight Foundation, and the National Council of Nonprofits — this campaign is founded on the conviction that board members are the leaders from whom decision-makers need to hear when making decisions that affect our communities. As stewards of their organizations, board members have the opportunity to serve as powerful champions for the missions they serve and as ambassadors who can bridge differences in opinion and share tested solutions to community problems.

"There are more than 1.5 million nonprofit organizations in the United States with an estimated 20 million board members," said Wallestad. "The most useful and under-utilized asset our organizations have to advance our missions are the business leaders, community volunteers, philanthropists, and opinion leaders who are so passionate about what our missions seek to achieve. They have already put their time, resources, and reputations on the line. Strong board leadership is not just about checks and balances; it is about standing for our missions through advocacy."

The campaign calls on all nonprofit board leaders to stand up for the organizations they believe in by actively representing their organization's mission and values, and by creating public will for solutions to community challenges.

The goals of the Stand for Your Mission campaign are to

  • bring about a sustainable shift in the understanding and expectations around board engagement in advocacy
  • move advocacy from an ancillary to a key board leadership role
  • strengthen the nonprofit sector's ability to advance the public good

The launch of this campaign includes the unveiling of the Stand for Your Mission website, which features a discussion guide designed to help nonprofit boards start on the path toward greater impact through advocacy.

The Forum Network has both deep regional roots and a broad national reach and our regional associations' members are key to strengthening connections and knowledge sharing across the giving sector.

Download File (PDF)

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Op-Ed Surge Calls for America Gives More Vote

Posted By Adam Donaldson, Monday, September 15, 2014
Updated: Wednesday, October 1, 2014
UPDATE 10/1/2014

The U.S. Senate adjourned for the November elections without passing the America Gives More Act, a bill to promote giving to the work of charitable nonprofits in communities across the country. 

It is essential that individuals who support the work of charitable nonprofits tell Senators and Representatives while they are home for the elections that the America Gives More Act is must-pass legislation that they must enact before the end of the year.

Nonprofit organizations and foundations have united in an advocacy effort to encourage Majority Leader Harry Reid, Minority Leader Mitch McConnell and their colleagues to bring H.R. 4719 to a floor vote.  A recent surge in op-eds in local papers, nonprofit magazines, and political journals across the country has added to calls and letter campaigns.

The most recent is by Vikki Spruill, President of the Council on Foundations, Protect giving: A chance for real bipartisanship.

If you are reading this before September 23, please join the Association of Baltimore Area Grantmakers in asking Senators to support charitable giving.  Read below or click here for the previous invitation to action.

Tags:  Council on Foundations  deduction  excise-tax  IRA  tax 

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Ask Senators to Support the America Gives More Act

Posted By Adam Donaldson, Thursday, August 14, 2014
While U.S. Senators have returned from DC to their home states, it's time to engage them with an important message: Support the America Gives More Act!

 

The Association of Baltimore Area Grantmakers has communicated with Senators Benjamin Cardin and Barbara Mikulski about the short window of opportunity before the end of the 113th Congress to significantly increase charitable giving to address local needs (click for letter).  The House of Representatives passed the America Gives More Act of 2014 (H.R. 4719) on July 17th and the Senate must now take action for the bill to become law.

Now it is your turn.  We recommend that our members, private and community foundations, and nonprofit organizations learn more about the America Gives More Act and contact their Senators to express support.  Your voice will add to the call from Independent Sector, National Council of Nonprofits, Council of Foundations, and our Forum Network of regional associations of grantmakers.


Action Step
Contact Senator Cardin and Senator Mikulski before they go back to Washington, D.C. on September 5.  Ask them to support the America Gives More Act and to urge Senate Majority Leader Reid to schedule a vote on the bill when the Senate reconvenes in September.


Sample Communication:

I am writing to request your support for the America Gives More Act of 2014 (H.R. 4719), which the House passed on July 17th. The America Gives More Act includes five provisions that are crucial to the philanthropic and nonprofit community which are:

  • Permanently reinstating the IRA charitable rollover;
  • Simplifying the excise tax to one percent for private foundations' investment income;
  • Permanently reinstating the enhanced deduction for donating land conservation easements;
  • Permanently reinstating the enhanced deduction for donating food inventory; and 
  • Extending the deadline for claiming charitable donations on the previous year’s tax filing through April 15.

[provide an example of the results of your work in Maryland]

Thank you for your consideration and continued support of Maryland’s philanthropic and nonprofit communities.
 

Sincerely,


Check out these talking points from our colleagues around the field.

Private and Family Foundation Members --  Reaching out to legislators with a description of the legislation, which includes the EXCISE TAX, is permissible under IRS guidelines because it falls under the “self-defense” lobbying rules.

The window of opportunity to enact these changes that will promote philanthropy is small.  The work in the House is done.  But, the Senate only has fifteen to get any work done before it adjourns in October for the elections.  After that, we are looking at a new Congress and having to start the process all over again.  This is one of those rare moments in the Congressional process when the opportunity is real and the timeframe for acting is clearly defined.

If you would like more information or assistance in your own advocacy efforts, please contact Adam at
adonaldson@abagrantmakers.org or 410-727-1205.  And! If you do reach out to Senators Cardin and Mikulski, please let us know – especially if you get a response back. We will keep you posted as to what happens in September when the Senate returns to DC.

Tags:  America Gives More Act  Charitable Giving  excise-tax  IRA  position statement  tax 

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The America Gives More Act

Posted By Adam Donaldson, Friday, July 18, 2014

On July 17, 2014, the House of Representatives approved H.R. 4719, the America Gives More Act, which includes five tax provisions aimed at increasing charitable giving and long supported by the Association of Baltimore Area Grantmakers. This is an exciting development for philanthropy, but there remains a long pathway to getting the provisions to become law.

 

The legislation passed 277-130. A large block of Democrats, including Maryland’s Representatives, voiced support for the policies but voted against the bill because there is no plan on how to pay for it.  The White House issued a Statement of Administration Position (SAP) opposing H.R. 4719 with the same objection that the bill lacks spending offsets.

 

The Senate signaled it is not likely to consider companion legislation to H.R. 4719 immediately.  Instead, the Senate is expected to address the tax provisions in the fall or wait until after the mid-term elections in November.  Media reports are that the Senate is also likely to limit to two years the time span of the IRA-Charitable Rollover, retroactive to 2014 and all of 2015.

 

What is in The America Gives More Act?

 

IRA Charitable Rollover

H.R. 4719 would make the IRA charitable rollover permanent law, removing the uncertainty of this tax incentive for charitable giving requiring new legislation every year or two.  Under the Rollover provision, individuals age 70½ and older can donate up to $100,000 to charitable organizations directly from their Individual Retirement Account without having to treat the distribution as taxable income.  In order to qualify, contributions must go directly to a public charity and be made from traditional IRAs or Roth IRAs. Donors may receive no goods or services in return for their contributions and must obtain written documentation of their contribution from each recipient charity.

 

Private Foundation Excise Tax

H.R. 4719 would simplify the private foundation excise tax on net investment income to a single rate of 1 percent.  The current two rate system is viewed by many foundations as an administrative burden and disincentive for increased giving.  Under current law, private foundations are required to pay a 2 percent excise tax on investment income.  The excise tax rate is reduced to one percent in any year in which the foundation’s distributions for charitable purposes exceeds the average level of the foundation’s charitable distributions over the preceding five tax years. 

 

Charitable Deduction Deadline

H.R. 4719 would give taxpayers until April 15 to make charitable contributions eligible for the charitable deduction, instead of requiring those gifts to be made by the end of the calendar year.

 

Food Inventory Donations

H.R. 4719 would make permanent and enhance the benefit of a current provision that allows a tax deduction for charitable contributions of food inventory.

 

Land Conservation Easements

H.R. 4719 would make permanent and enhance the benefit of a current provision that allows a tax deduction for contributing land conservation easements.

 

Tags:  charitable deduction  deduction  excise-tax  IRA  tax 

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