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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 

President's Budget Includes FOUR Philanthropy Proposals

Posted By Adam Donaldson, Tuesday, February 14, 2012
President's budget would:

  1. Cap Itemized Deductions
  2. Reinstate Itemized Deduction Phase-Out
  3. Establish "Buffett Rule”
  4. Create a Simplified Excise Tax for Private Foundations

The President’s fiscal year 2013 federal budget proposal includes four proposals to modify existing tax law that would have significant effects on foundations and charitable giving.  The Association of Baltimore Area Grantmakers will continue to monitor these proposals and encourages members to inform us of their concerns by contacting Adam Donaldson at adonaldson@abagrantmakers.org or leaving PUBLIC comment below.

Cap Itemized Deductions - proposal to limit the tax value of itemized deductions high-income taxpayers can claim to a maximum of 28 percent, regardless of their marginal tax rate. Similar to previous proposals, the deduction cap would apply to married taxpayers filing a joint return with income higher than $250,000 and to single taxpayers with income higher than $200,000. These thresholds would be set "at 2009 levels,” and thereafter would be adjusted for inflation. The Administration estimates that its proposal to cap the value of itemized deductions, together with limitations on other "tax benefits” for persons with incomes above the specified thresholds, would increase tax revenues by $584 billion over the 10 years from 2013 to 2022.

Reinstate Itemized Deduction Phase-Out - proposal to reinstate a limit on itemized deductions that was phased out a decade ago. Reinstating this limitation would reduce the itemized deductions an individual could claim by 3 percent of the amount by which that taxpayer’s income exceeded a certain threshold, provided that deductions could not be reduced by more than 80 percent. Though abolished in 2001, the limitation has been scheduled to be reinstated in 2013, and the administration supports letting this occur as scheduled. The administration estimates doing so will raise an additional $123 billion in tax revenue over the next 10 years. If the limit were in place in 2012, the adjusted gross income floor for the personal exemption phase-out would be $260,500 for married taxpayers filing a joint return and $173,650 for single taxpayers.  

Establish "Buffett Rule” - the budget also includes the "Buffett Rule.” The budget overview states that "the president is now specifically proposing that in observance of the Buffett rule, those making over $1 million should pay no less than 30 percent of their income in taxes. The administration will work to ensure that this rule is implemented in a way that is equitable, including not disadvantaging individuals who make large charitable contributions. And he is proposing that the Buffett rule should replace the Alternative Minimum Tax.

Create a Simplified Excise Tax for Private Foundations - the budget also includes a provision calling for a single, 1.35 percent excise-tax rate on investment income of private foundations. Under current law, private foundations are subject to a two-tiered rate structure that generally imposes a 2 percent rate but that allows a foundation to pay only 1 percent if certain requirements are met. Importantly, the president’s budget states that a single flat rate will "simplify the tax laws and encourage increased charitable activity.” Taking simplification one step further, the budget proposes a flat rate of 1.35 percent, rather than the revenue-neutral 1.39 percent which the Council on Foundations has been advocating. The administration estimates that the proposal would result in the loss of $54 million in tax revenues over 10 years.

(Source: Council on Foundations)

Tags:  Council on Foundations  deduction  excise-tax 

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Baltimore Community Foundation Advocacy

Posted By Adam Donaldson, Friday, January 13, 2012
The Baltimore Community Foundation [ABAG member] has updated its advocacy goals for 2012.  Although the community foundation has broad interests, BCF focuses advocacy efforts on three areas: education, transportation, and the environment.

Learn more about BCF's public policy goals on their Advocacy webpage.

BCF also supports and promotes philanthropy across the region, advocating for legislative and policy measures that make it easier for people to give--and give more--to their communities.  As part of the Maryland Community Foundations Association (MCFA), BCF and other community foundations across the state aim to create a tax credit program that would promote charitable giving in Maryland and encourage business owners to keep their companies and their wealth in-state.

In 2011, legislation was introduced but not adopted that would have allowed an individual with a capital gain of $10 million or more who makes a gift to unrestricted endowments at one of Maryland's  community foundations to receive a tax credit equal to the amount of the gift. The passage of the bill would promote a climate conducive to both entrepreneurship and charitable giving, where business owners have incentives to keep their companies and their wealth in Maryland, and are encouraged to give to good causes in their communities.  Similar legislation is sought for 2012.

This content is presented for informational purposes only and may not reflect the specific views of the Association of Baltimore Area Grantmakers or its individual members.

Tags:  community foundations  general assembly 

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Maryland Nonprofits Policy Priorities

Posted By Adam Donaldson, Thursday, January 12, 2012

Timed to the start of the Maryland General Assembly 2012 legislative session, Maryland Nonprofits held its annual legislative preview and published its policy priorities.  Maryland Nonprofits will seek to: 

  1. Protect important state programs and services by adopting reasonable new revenue measures – a "Balanced Approach”
  2. Make Maryland’s health care exchange an effective system for access to quality affordable health care for all Marylanders
  3. Assure Reform of State Procurement Practices
  4. Allow Fair Access to Housing

You can learn more from the attached file or at the Maryland Nonprofits public policy website.  The Maryland Budget and Tax Policy Institute also released a brief guide to budget advocacy that outlines the budget process. 

The Association of Baltimore Area Grantmakers is a member of Maryland Nonprofits and supports efforts to strengthen the nonprofit sector and promote philanthropy.  This content is presented for informational purposes only and may not reflect the specific views of ABAG or its individual members.

Download File (PDF)

Tags:  general assembly  health  housing  Maryland Nonprofits  procurement 

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Foundations on the Hill 2012

Posted By Adam Donaldson, Monday, December 12, 2011

Foundations on the Hill 2012 will take place March 21-March 22. 

SAVE THE DATE and visit www.foundationsonthehill.org for more information or contact Adam Donaldson, adonaldson@abagrantmakers.org to be part of the Maryland delegation.

Tags:  Foundations on the Hill 

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ABAG Signs Charitable Giving Letter

Posted By Adam Donaldson, Monday, November 14, 2011

Via a letter campaign led by the National Council of Nonprofits, the Association of Baltimore Area Grantmakers joined more than 4,000 nonprofit organizations to urge the Joint Select Committee on Deficit Reduction to expressly preserve the charitable giving incentive for individuals so that charitable contributions can continue to support the vital programs and services on which communities and policymakers rely. Click here to read the letter.

Maryland Representative Chris Van Hollen is a member of the "super” Committee.

Tags:  deduction 

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New Study on Capping the Charitable Deduction

Posted By Adam Donaldson, Friday, October 28, 2011

A new study by the Center on Philanthropy at Indiana University finds that reducing the value of itemized deductions from 35 percent to 28 percent would reduce charitable giving. The Center on Philanthropy estimates that if the Administration’s proposals had taken effect in 2009 and 2010 respectively, itemized charitable giving would have declined by 0.4 percent ($820 million) in the first year and by 1.3 percent ($2.43 billion) in the second year.

Press release (October 25): http://www.philanthropy.iupui.edu/News/2011/10/pr-TaxAnalysis2011.aspx

The full report is available at http://philanthropy.iupui.edu/Research/taxpolicy.aspx

 

Tags:  deduction 

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Senate Hearing on Charitable Deductions

Posted By Adam Donaldson, Monday, October 17, 2011

The Senate Finance Committee will hold a hearing on tax reform options and incentives for charitable giving, Tuesday, October 18, 2011. You should be able to watch or read recorded testimony on the hearing website.

List of Witnesses

  • Mr. Frank Sammartino, Assistant Director For Tax Analysis, Congressional Budget Office, Washington, DC
  • Elder Dallin H. Oaks, The Quorum of the Twelve Apostles, The Church of Jesus Christ of Latter-day Saints, Salt Lake City, UT
  • Dr. Eugene Steuerle, Richard B. Fisher Chair and Institute Fellow, The Urban Institute, Washington, DC
  • Mr. Brian A. Gallagher, President and CEO, United Way Worldwide, Alexandria, VA
  • Mr. Roger Colinvaux, Associate Professor, The Catholic University of America, Columbus School of Law, Washington, DC

In expectation of the hearing, staff of the Joint Committee on Taxation (JCT) released "Present Law and Background Relating to the Federal Tax Treatment of Charitable Contributions." The paper contains an overview of the present-law relating to the federal tax treatment of charitable contributions and a discussion of economic issues relating to federal tax incentives for charitable giving.

Tags:  deduction 

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Council on Foundations Letter to Congress

Posted By Adam Donaldson, Monday, October 17, 2011

The Council on Foundations recently sent a letter opposing a cap on charitable deductions to the co-chairs of the congressional supercommittee considering deficit reduction. The letter to Rep. Jeb Hensarling (R-Texas) and Sen. Patty Murray (D-Wash.) was signed by 149 foundation members representing 37 states.

Learn more about the position of the Council on Foundations on their Legislative Agenda webpage.

ABAG reminds our private foundation members that contacting your legislators about changes to the charitable deduction rate is permissible under the self-defense exception to the lobbying rules. Private foundations do not have to remain neutral on legislation if it affects their existence, tax-exempt status, powers and duties, or the deductibility of contributions. The exception allows private foundations to communicate with legislators and their staff on these issues and to express an opinion on such legislation. Note that this exception applies to communications with legislators and their staff and does not apply to communications with a broader audience. While we are confident that communicating with legislators on this issue qualifies for the self-defense exception, the information in this notice is intended for educational purposes only and is not legal advice. If you have any questions about how this general information applies to your specific situation, you should contact your legal counsel.

Download File (PDF)

Tags:  Council on Foundations 

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Position Statement – ABAG Opposes Cap on Charitable Deductions

Posted By Adam Donaldson, Monday, October 17, 2011

On October 17, 2011, ABAG adopted the following position statement regarding the deductibility of charitable contributions:

The Association of Baltimore Area Grantmakers urges policymakers to support charitable giving by opposing current proposals to cap the charitable deduction for federal taxpayers at 28%. Recent studies show that a 28% cap would reduce charitable giving by four to nine billion dollars at a time when nonprofit organizations struggle to meet increased demand for their services resulting from the economic downturn.

ABAG will share this message with its members, partners, and relevant public officials.  Please see additional information and news regarding this policy issue above.

Tags:  deduction  position statement 

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