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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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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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Raising Concerns about Form 1023-EZ

Posted By Adam Donaldson, Friday, June 20, 2014

On June 19, 2014, the Association of Baltimore Area Grantmakers joined a growing chorus of concern about the Internal Revenue Service proposed Form 1023-EZ, a shorter application to earn nonprofit status.  On behalf of our members and the nonprofit community, we sent a joint letter with Maryland Nonprofits to Members of Congress asking them to stop the IRS from implementing Form 1023-EZ.

We understand the good intentions of the IRS to manage a backlog of applications by developing a streamlined process for smaller organizations.  The Form 1023-EZ, however, provides just a two-page checklist instead of the traditional proven protocols of requiring applicants to submit materials showing they are prepared for the responsibilities of tax-exempt status.  ABAG is concerned that Form 1023-EZ would increase opportunity for fraud and exacerbate the proliferation of nonprofit organizations. We believe the IRS should slow down and restart a public and transparent conversation about improvements to the current Form 1023.

Members interested in learning more about this issue can read from several recent articles:

Tags:  Maryland Nonprofits  tax 

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Tax Matters in Congress

Posted By Adam Donaldson, Monday, June 9, 2014
Updated: Thursday, June 12, 2014
June 9, 2014

On May 29, 2014, the House Ways and Means Committee approved five bills of interest to the nonprofit and foundation communities:

  1. Permanently extend the IRA charitable rollover (HR 4619).
  2. Allow individuals to claim a charitable deduction for contributions made up to the date their income tax return is due (usually April 15) (HR 3134).
  3. Eliminate the upper tier excise tax and reduce the excise tax on investment income of private foundations from two to one percent (HR 4691).  
  4. Make permanent the enhanced deduction for property donated for conservation easements (HR 2807).
  5. Make permanent the enhanced charitable deductions for food inventory (HR 2945).

Each of the bills received bi-partisan support in the debate, but all were approved by party-line votes due to a dispute over whether to pay for the tax provisions. Republicans voted yes to permanently extend the measures but without providing for offsetting revenue raisers to pay for the changes; Democrats voiced support for the policies but voted no on the bills because they did not include "pay fors" (Source: National Council of Nonprofits' Nonprofit Advocacy Matters: June 2, 2014.)

This is one step in the legislative process leading to a full vote in the House and Senate.  It is unclear if the legislation would be brought forward before November elections.

On June 5, 2014, Senate Finance Committee Chairman Ron Wyden, D-Ore., and Ranking Member Orrin Hatch, R-Utah, issued a press release reinforcing their "commitment to overhauling the nation’s broken tax code through comprehensive reform.”  Wyden and Hatch announced the first in a series of committee hearings this summer.


  • Education tax incentives


  • ID theft and taxpayer privacy protection
  • Modernizing corporate taxation


Tags:  charitable deduction  deduction  excise-tax  House Ways and Means  IRA  tax  Washington 

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Government-Nonprofit Contracting and Grants

Posted By Adam Donaldson, Monday, May 19, 2014

May 19, 2014

By Adam Donaldson

Headlines about government contracting do not often seize our attention, but philanthropy must realize it is called upon to fill funding gaps from inefficiencies and cuts to government-nonprofit contracts and grants. This is especially true when government contracts and grants do not pay the full cost of services.

The National Council of Nonprofits just released Toward Common Sense Contracting: What Taxpayers Deserve to detail the challenges and recommend 16 solutions. At the same time, the Urban Institute also released its state-specific data from a national survey documenting the serious and widespread problems experienced by nonprofit organizations that have contracts and grants with governments at the local, state, and federal levels. The report, National Study of Nonprofit-Government Contracts and Grants 2013: State Profiles, provides essential nationwide and state data on contracting practices, and ranks states on several areas of concern.

Starting on page 55 of the state profiles, we find that Maryland ranks number one in nonprofit organizations responding that the complexity and time of reporting is a big program and number two in responding that the complexity of applying is a big problem.

On behalf of the sector, Maryland Nonprofits has long worked on procurement reform and these issues.

Should we all be paying more attention?

Tags:  Adventures in Philanthropy  May 2014 Members' Memo  Public Policy 

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What is PolicyWorks?

Posted By Buffy Beaudoin-Schwartz, Monday, April 21, 2014

April 2014

ABAG is proud to participate in a national partnership of regional associations of grantmakers which envisions that policymakers will recognize regional associations of grantmakers as among the most valued voices and expert resources on issues critical to philanthropy and society. 

For questions about PolicyWorks, please contact ABAG’s liaisons,Member Services Director Adam Donaldson and Board Member Kevin Griffin Moreno. Adam and Kevin will attend the PolicyWorks Institute July 30-August 1, 2014 where regional association staff and Board Members from across the country will gather to strengthen individual and collective capacity for policy advocacy.


Policy Works LogoPolicyWorks for Philanthropy is a multi-year initiative that seeks to build the capacity of regional associations of grantmakers’ staff, board and volunteer leaders to engage policymakers in support of a vibrant and effective philanthropic sector.

Our vision is that policymakers will recognize regional associations of grantmakers as among the most valued voices and expert resources on issues critical to philanthropy and society. There are 28 regional associations participating in this initiative.


The PolicyWorks Community is committed to building their individual and collective capacity to achieve the PolicyWorks vision and goals. That commitment is based on the belief that:

  • Policy work is essential to achieving our missions and helping our more than 3,000 foundation members; and
  • As a network serving foundations in 39 states, the PolicyWorks community offers the best and only coordinated national system for building effective relationships with elected and appointed officials at all levels of government.

By "policy work" we meangovernment relations—related to legislation and regulations affecting the work of charitable foundations; andpublic policy engagement—supporting the achievement of charitable foundations’ mission and goals.

Building and maintaining relationships with policymakers is essential to the philanthropic sector’s ability to: educate policymakers about the work, value and impact of foundations; advise policymakers about potential legislation or regulation that could harm the sector and decrease much needed philanthropic dollars; gain policymakers’ support for legislation that could support the growth and effectiveness of philanthropy; and build partnerships with policymakers to achieve policy reforms that improve the quality of life for those foundations seek to serve.


PolicyWorks is designed as a three-stage, multi-year engagement involving regional association executives and senior staff with members of their boards of trustees and volunteer leaders such as committee chairs.

Click here to learn more ...

Tags:  april 2014 Members' memo  forum  Policyworks  pubilc policy  regional associations 

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Foundations on the Hill another Marker in the Tax Reform Marathon

Posted By Adam Donaldson, Monday, March 10, 2014
Updated: Monday, March 10, 2014

March 10, 2014

By Adam Donaldson, ABAG Member Services Director

Last week, the Association of Baltimore Area Grantmakers joined over 200 leaders from across the philanthropic sector for Foundations on the Hill and the combined activities of Philanthropy Week in Washington.  Despite snow and below freezing temperatures in Washington (both literally and figuratively), Maryland’s Members of Congress gave warm welcome in our meetings and expressed strong support for foundations and charitable giving.

On behalf of all our members, I attended:

  • lunch with Tim Delaney, President, National Council on Nonprofits;
  • the board meeting of the Forum of Regional Associations of Grantmakers;
  • the joint Forum and Council on Foundations Government Relations Councils meeting;
  • the ACR Summit for Leaders for an insider’s look at the legislative landscape on Capitol Hill;
  • PolicyWorks for Philanthropy  speaker event Looking into the Crystal Ball: Future of State and Federal Tax Incentives for Charitable Giving;
  • meeting with Congressman John Sarbanes and staff member Raymond O’Mara;
  • meeting with Senator Barbara Mikulski and staff members Aaron Edelman and Laurel Albin;
  • meeting with Jedd Bellman, Senior Policy Advisor for Congressman Elijah Cummings; and
  • the House Philanthropy Caucus congressional staff briefing on the role of American Philanthropy.

Anna Bard, Community Affairs Manager for the Mid-Atlantic at Wells Fargo, Tim Huber, Research and Policy Associate at Council on Foundations, and Mike Litz, President of the Forum of Regional Associations of Grantmakers helped ABAG illustrate the impact of philanthropy and remind our elected officials that tax policy matters to foundations and nonprofit organizations.  With the President’s budget again calling for a cap to charitable deductions and Congressman Dave Camp’s plans for tax reform, the sector faces legislative challenges.

What we learned is that Members of Congress know about the efforts of Maryland’s grantmakers.  In conversation, they revealed deep personal histories with ABAG members and awareness of philanthropic achievements.  ABAG members may have felt their ears burning March 5-6, and should feel confident in open and easy communication with elected officials in Washington, DC.

Expressing strong support for the charitable deduction, Senator Barbara Mikulski taught us to stop thinking about incentives for charitable giving just in terms of money won or lost.  What is at stake is participation in civic life, where citizens combine their skills, time, and resources to address community needs together.  We hope all agree that a thriving society requires a strong nonprofit and philanthropic sector.

Congressman Sarbanes recommended vigilant monitoring.  Congressional leadership signaled that comprehensive tax legislation will not move to a voting stage in 2014, but there are many ideas discussed in the context of tax reform that will directly impact the operations of foundations and nonprofit organizations.  Congressional staff asked that we keep them informed -- with specific detail --the potential impact of tax policies on Maryland. 

With and on behalf of our members, ABAG will do just that – monitoring and informing. We are already past the first marker in a marathon race toward tax reform.  Slowed by snow and national politics, tax reform will still happen.  Private and community foundations, supporting organizations, donor advised funds, and nonprofit organizations are all public charities under the tax code.  Suit up in your Under Armour ColdGear® and join us in the marathon.

Tags:  charitable deduction  Foundations on the Hill  March 2014 Members' Memo  tax 

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Foundations on the Hill 2014 Begins

Posted By Adam Donaldson, Wednesday, March 5, 2014
Updated: Wednesday, March 5, 2014
March 5, 2014

This week ABAG participates in Foundations on the Hill, joining regional association colleagues and member philanthropists in Washington, DC to highlight the impact of philanthropy in local communities.

Americans donated an estimated $316.23 billion to charitable causes in 2012; giving by foundations was an estimated $45.74 billion.  Individual Marylanders contributed $4.9 billion and 1,479 Maryland private foundations invested $745 million to address critical community needs and improve our quality of life.

The charitable sector employs one out of every seven private workers in Maryland.

Meeting with Members of Congress and their staff, I will explain that philanthropy helps communities thrive through:

Grantmakers are more risk-tolerant than public entities and flexible with their funds, enabling them to test new ideas and advance those that are most effective.

Grantmakers are neutral brokers that bring together diverse stakeholders to work on critical community issues such as schools, health and economic development.

Grantmakers contribute expertise, local relationships, and resources to public-private partnerships to bring successful programs to scale, promote effective policies and work for systemic change.

I will also explain that tax policy matters to philanthropy.  Our philanthropic organizations are created under the tax code, and we want to be consulted on tax reform. The DC meetings take place one week after Congressman Dave Camp introduced a comprehensive tax reform plan that included several proposed changes that concern philanthropy. Click here for details..

Although both Speaker Boehner and Senate Minority Leader McConnell have said tax reform is not on the agenda this year, as the Council on Foundations has stated, “it will provide a critical starting point for comprehensive tax reform conversations in the near future.”

ABAG will always promote a tax code that provides strong incentives for charitable giving and maximizes the use of private money for public good.  While working hard to improve communities in Maryland, we cannot forget the potential harm or benefit from decisions in Congress.  Look for an update next week on what we learn from our Senators and Representatives.

Led by the Forum of Regional Associations of Grantmakers, Foundations on the Hill is part of Philanthropy Week in Washington, March 3-7, an inaugural week-long series of events and activities, including the ACR Summit for Leaders, which highlight the role of philanthropy in our society. Hosted by the Council on Foundations, the week provides an opportunity for philanthropic leaders to spend time on Capitol Hill highlighting the impact of philanthropy in Member’s districts and states. #FOTH2014 #PWDC | #PhilanTHRIVE.

Tags:  charitable deduction  Foundations on the Hill  tax  Washington 

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Congressman Camp Releases Tax Plan

Posted By Adam Donaldson, Thursday, February 27, 2014
Updated: Monday, March 3, 2014
On February 26, 2014, Congressman Dave Camp (R-MI-4), Chairman of the House Ways and Means Committee, released a plan to completely reform the individual and corporate tax codes. Although both Speaker Boehner and Senate Minority Leader McConnell have said tax reform is not on the agenda this year, as the Council on Foundations has stated, “it will provide a critical starting point for comprehensive tax reform conversations in the near future.”

Find details of the proposed bill here:

Executive Summary
Summary of Bill
Legislative Language
Joint Committee on Taxation Explanations and Revenue Estimates

Philanthropic organizations are created under the tax code, and Congressman Camp’s plan included several proposed changes that concern philanthropy. 
  • 2 percent floor on the charitable deduction – Under the Chairman’s proposal, an individual’s charitable contributions could be deducted only to the extent that they exceed 2 percent of an individual’s adjusted gross income. ABAG, in the past, has opposed any change to the charitable deduction that would reduce the value of the charitable deduction for donors.
  • Private foundation excise tax simplification – The bill simplifies the current two-tiered excise tax to a flat rate of 1 percent. Many ABAG members favor the reduced administrative burden.  The proposal also removes the current exclusion for exempt operating foundations, making them subject to the excise tax for the first time.
  • Mandatory e-filing of Form 990s for all tax-exempt organizations – The bill requires all tax-exempt organizations required to file Form 990s to file these returns electronically, and for the IRS to make the returns publicly available electronically. We need to better understand the potential implications for small nonprofits and private foundations.
  • Extension of the charitable deduction to April 15th of the calendar year – This provision would allow individual taxpayers to deduct charitable gifts made after the close of a tax year but before April 15th, the calendar year deadline for the filing of tax returns. This will give donors more flexibility in planning their charitable contributions throughout the year.
  • Five year payout requirement for donor advised funds –The proposal would assess a 20 percent excise tax on public charities—including community foundations—that fail to distribute contributions from donor advised funds (DAFs) within 5 years. ABAG will seek more information on the details and effects of this proposal, but it raises serious concerns about DAFs unique ability to engage individuals in permanent, strategic giving.
  • Repeal of Type II and Type III supporting organizations – The plan eliminates Type II and Type III supporting organizations altogether. This proposal has the potential to reduce the flexibility of community foundations and other organizations to establish separate but related entities. Type III supporting organizations are often viewed as alternatives to private foundations, but under the proposal, they must be operated, supervised or controlled by a public charity—sacrificing some of their autonomy.
  • Changes to the treatment of certain unrelated business income – Chairman Camp’s proposal extends the Unrelated Business Income Tax (UBIT) and changes the manner in which it is calculated. It applies UBIT to all name and logo licensing, ends aggregate calculations for the net unrelated taxable income of unrelated trade or business activities, applies UBIT to income from fundamental research that is not made available to the public, and heavily regulates when UBIT applies to sponsorship at a recognized event. These changes could chill the innovative ways that some tax-exempt organizations generate additional revenue.
  • Phase-out of itemized deductions for certain taxpayers – The Chairman’s plan phases out itemized deductions for single taxpayers with adjusted gross incomes above $250,000 and married taxpayers with incomes above $300,000, which could have an impact on what portion of their charitable contributions these taxpayers can deduct.
  • Excise tax on certain private colleges and universities – The bill imposes a one percent excise tax on the net investment income of many private colleges and universities, similar to the private foundation excise tax. The tax would apply to those private colleges and universities with investment assets that exceed $100,000 per full-time student.
  • Excise tax on excess executive compensation – Chairman Camp proposes a 25 percent excise tax on executive compensation in excess of $1 million paid to any of an organization’s five highest paid employees for the tax year.
ABAG will be monitoring reactions to these proposals and the next steps Congress takes to move any of these ideas forward.  If you have concerns or are excited by these proposals, leave comment here or contact Adam Donaldson at

Tags:  charitable deduction  House Ways and Means 

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2014 ABAG Public Policy Update

Posted By Adam Donaldson, Monday, January 20, 2014
Updated: Tuesday, February 18, 2014

January 20, 2014

By Adam Donaldson, ABAG Member Services Director

Maryland’s General Assembly officials, and thus advocates, are busy in Annapolis again. It’s the time of year when we start reading the paper. ABAG members have numerous sources for public policy news, but let us name the big issues of 2014 and policies of particular interest to achieving the missions of some grantmakers.

1.Minimum Wage: An increase of some kind seems certain, but not without debate. Grantmakers should take note of the Sun opinion piece from Laura Howell, Executive Director, of the Maryland Association of Community Services who raises the issue of reimbursement rates in state contracts to nonprofit agencies.

2.Pre-School: Complicated by politics in the Democratic race for governor, nevertheless, the potential is strong for Maryland to support universal voluntary pre-school . The Baltimore Community Foundation is among many grantmakers and nonprofit organizations that support expanded access to pre-kindergarten.

3.Storm water fees: Senate President Thomas Mike Miller and House Speaker Michael Busch have publically vowed not to repeal the storm water fees praised by environmental advocates for bay protection, but there will be attempts to modify this policy.

4.Fracking: Environmental groups will seek legislation banning hydraulic fracturing for natural gas in Maryland. The state commission studying the issue is expected to finish this summer.

5.Estate Tax: Proposals to couple the state estate tax with the federal tax are aimed at keeping wealth in Maryland.Maryland estates worth more than $1 million are taxed by the state at a rate of up to 16 percent, but the federal government exempts the first $5.25 million of estates.

Marijuana legalization,Pit Bulls, and reform of theBaltimore City Jailwill be well covered also in the newspapers. Another proposal,Earned Sick Leavefor all workers should be of interest to everyone. In Maryland, more than 700,000 workers must choose to go to work sick or lose their day of pay.

Maryland Nonprofits held a Legislative Preview in Annapolis. The associations’ priorities, as outlined here, are to Protect Vital Services, Assure Health Care Access, Reform Procurement Practices, Provide Fair Housing Access, and Measure Genuine Progress.

There are many more important policy issues that will be debated and voted upon daily in Annapolis. The ABAG Public Policy Committee invites members to share what issues most concern them and their mission.

Members can contact or register to attend the Public Policy Committee meeting on February 6 from 12:00-1:30PM.

Tags:  Adventures in Philanthropy  grantmakers  legislation  public policy 

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Mikulski Writes ABAG In Support of Charitable Tax Deduction

Posted By Adam Donaldson, Thursday, January 9, 2014
Updated: Friday, January 24, 2014

On December 12, 2013, U.S. Senator Barbara Mikulski (D-MD) expressed her support for the charitable tax deduction in a letter to the Association of Baltimore Area Grantmakers. Writing that "Taxpayers should have incentives to make charitable contributions,” Senator Mikulski agreed that "Charitable organizations are needed now more than ever. But philanthropy cannot do it alone – you need a government on your side.”

Senator Mikulski joined 17 Republican and 15 other Democratic Senators in signing a letter to Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) of the Senate Committee on Finance, which began "We write to you to underscore the importance of protecting the full value and scope of the charitable deduction during a comprehensive rewrite of the tax code.” 

The Senate remains committed to tax legislation in 2014. Discussion papers and proposals have been released from the Senate Committee on Finance, but to date do not indicate a specific direction for the charitable deduction. The tax administration draft does propose requiring all tax-exempt organizations to electronically file their Form 990s, but gives organizations the ability to request a waiver from this requirement if they lack the technology necessary to e-file.

The Association of Baltimore Area Grantmakers has consistently voiced the important role that incentives have in charitable giving and called on Congress to protect the current charitable deduction program.

Tags:  charitable deduction  Charitable Giving Coalition  Charitable Tax Deduction  Protect Giving 

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