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New Charity Package Introduced in Senate

Senators John Thune (R-S.D.) and Ron Wyden (D-Ore.)  have introduced a series of charity provisions called The CHARITY (Charities Helping Americans Regularly Throughout the Year) Act, which calls on the Senate to  ensure that the “value and scope of the deduction for charitable contributions is not diminished during a comprehensive rewrite of the tax code.”

The CHARITY Act, S. 2750, builds on several significant charitable tax provisions that were signed into law late last year, including one that makes permanent a law allowing taxpayers at least 70 ½  to make charitable contributions directly from their IRAs.

Long-term, the key provision is the non-binding Sense of the Senate that states that "encouraging charitable giving should be a goal of tax reform. Congress should ensure that the value and scope of the deduction for charitable contributions is not diminished during a comprehensive rewrite of the tax code."

The backing of the bill from both Thune and Wyden is a strong demonstration of the bi-partisan support that the charitable deduction has in Congress. Getting additional Senators and Representatives to support the bill this year will make a strong statement for future deliberations about tax reform and the fate of the deduction.

Other provisions in The CHARITY Act (S. 2750) would:

  • Make donor-advised funds an eligible charity for purposes of the IRA rollover law that permits an IRA owner at least 70-and-a-half-years old to exclude from their gross income up to $100,000 per year in distributions made directly from the IRA to certain public charities.
  • Simplify how foundations are required to calculate the federal excise tax imposed on investment income.
  • Authorize the Treasury Department to adopt regulations that align the simplified standard mileage tax deduction rate for personal vehicle use for volunteer charitable services with that for medical and moving purposes.
  • Promote transparency by requiring nonprofits to file their paperwork electronically.
  • Encourage philanthropic enterprises wishing to donate profits to charity by creating a limited exception to the excess business holding tax rules.

“I want to thanks Sens. Thune and Wyden for their continued leadership on giving and nonprofit issues,” said Andrew Watt, FInstF, president and CEO of AFP. “There are several provisions in the bill that will affect different parts of the sector and encourage donors to consider giving in different ways. This legislation sets the next marker for our work in public policy, and we’ll be working with House and Senate offices to grow support for the bill, including reaching out to AFP chapters to get them engaged in the legislation as well.”

The full text of the bill can be found here, and a summary of the provisions can be read here.

AFP will be closely monitoring the bill’s progress and will alert members if action is necessary



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