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Summer 2008 Public Policy Update

IRA Rollover Provision Held Up in Senate


In May 2008, the House passed H.R. 6049, the Energy and Tax Extenders Act of 2008, which would extend the IRA Rollover provision through Dec. 31, 2008 (a one-year extension). 

In June, the Senate held a vote to move forward on its version of H.R. 6049 that also included a one-year extension of the IRA Rollover provision. That vote failed along party lines due to issues unrelated to the giving incentive. The Senate subsequently introduced a separate bill, S. 3335, that included a one-year extension of the IRA Rollover provision. The Senate held a vote to move forward on the bill on July 30, but that vote failed, so that bill also continues to languish.

Negotiations for votes continue behind closed doors, but we do not have a clear indication as to when the bill(s) will be considered on the Senate floor.

Action Required:

Please contact your Members of Congress and urge them to pass the IRA Rollover provision extension found in the tax extenders package.

An easy way to contact your Members is by using the Vote for Philanthropy website here. You can send a pre-drafted letter to your Members of Congress with the push of a button.

You can find your list of Senators here, and you can find your House Member here (just enter your zip code in the top left-hand corner of the webpage).


The IRA provision (Section 204 of the bill) would be retroactive back to Jan 1, 2008, when the provision expired. The provision would remain in its original form, applicable only to direct gifts of cash to charitable organizations (capped at $100,000 annually) from donors age 70½ or older.

AFP has already been in contact with key senators’ offices about moving the bill and the IRA Rollover provision forward.  

AFP Submits Comments to the IRS on Draft Instructions for Redesigned Form 990


On June 1, 2008, AFP submitted comments to the IRS regarding its redesigned Form 990.  Two sets of comments were submitted:

  1. a comprehensive set of comments covering the core form and the various schedules that were drafted with the assistance of Perlman & Perlman, LLP, and
  2. a set of comments from a coalition (formed by AFP, CASE, the DMA Nonprofit Federation and The Association of Direct Response Fundraising Counsel) that focused primarily on Schedule G.

Action Required:



Most of the comments focused on technical changes that made the instructions more consistent and easier to understand.

In addition, AFP once again urged the IRS to separate fundraising from gaming on the new Schedule G because fundraising and gaming are distinct, unrelated and separate activities.

AFP's comments and the Fundraising Coalition's comments can be found below in the attachments section.

Congress Introduces Legislation to Increase the Charitable Mileage Rate


Recently, Rep. Todd Platts (R-PA) introduced H.R. 2020, and Rep. Thomas E. Petri introduced H.R. 1827. These bills would set the Charitable Mileage Rate to be equivalent to the Standard Business Mileage Rate. Both bills are currently before the House Ways and Means Committee. In the Senate, Sen. Charles Schumer (D-NY) introduced S. 3032 that would raise the charitable mileage rate to a fixed 40 cents, but requires legislation for any future increases. S. 3032 was referred to the Senate Finance Committee.

Action Required:

None at this time.


You may have seen the recent eWire story which noted that, in response to rising fuel costs, the IRS increased the mileage rates for business automobile use and medical/moving automobile use but did not change the rates for charitable purposes (because the latter requires an act of Congress):

The mileage rates increased to 58.5 cents per mile (up from 50.5 cents) for business automobile use and to 27 cents per mile (up from 19 cents) for medical/moving automobile use. The new rates will be in effect from July 1, 2008 through Dec. 31, 2008.  However, the Charitable Mileage Rate for volunteers who use their own vehicle for charitable service remains at 14 cents per mile (a rate that has remained unchanged for 10 years). 

California Diversity Bill Withdrawn


In response to Assembly Bill 624, legislation that would have required disclosure about their organizational diversity and their grants to minority organizations, a group of 10 large California foundations have agreed to allocate millions of dollars to charities that serve diverse and minority communities.

The foundations—including the William and Flora Hewlett Foundation, the Ahmanson Foundation and the California Endowment—have indicated they will develop a plan by the end of 2008 that will involve “a comprehensive set of grant-making activities, which we expect to be overall in the multimillion-dollar range and over several years,” according to a joint statement by the foundations.

Action Required:



Assembly Bill 624 was introduced to bring more exposure to how foundations spend their money and pressure larger foundation to grant more funds to organizations that work in minority communities. Foundations were resisting the legislation because of concerns over government interference in how they should be spending their funds.

Assemblyman Joe Coto (D-San Jose), the chief proponent of the legislation, said that by asking foundations "to shed some light on their investments," he hoped "they would then be in a position to make greater investments,” according to an article in The Sacramento Bee. "They saw this as an opportunity to do what we were suggesting and we've worked out this agreement that I think will be positive for everyone," Coto said.

The bill was scheduled to be considered at a recent meeting of the Senate Committee on Business, Professions and Economic Development. The deal between Coto and the foundations was announced at the meeting, and Coto immediately moved to drop the bill.

Assembly Bill 624 would have required foundations with more than $250 million in assets to post the following specific information both in their annual reports and on the Internet:

  • The racial, gender and sexual orientation composition of the board of directors or trustees, as well as their staff
  • The number of grants awarded to organizations that serve ethnic minority communities and lesbian, gay, bisexual and transgender communities
  • The percentage of grant dollars awarded to organizations where 50 percent or more of the board members and/or staff are ethnic minorities or are lesbian, gay, bisexual or transgender
  • The percentage of business contracts awarded to businesses owned by ethnic minorities or individuals who are lesbian, gay, bisexual or transgender

Other foundations involved in the agreement include the James Irvine Foundation, the UniHealth Foundation, Ralph M. Parsons Foundation, the California Wellness Foundation, the Annenberg Foundation and the David and Lucile Packard Foundation.

National Philanthropy Day Vote Postponed Until Fall 2008


AFP is disappointed to report that the House of Commons did not vote on Bill S-204, the National Philanthropy Day (NPD) legislation.

While the bill had been widely expected to receive consideration and ultimately be approved, unrelated and unexpected administrative matters held the bill up in the House Procedure Committee.

As a result, the bill will not be debated until the next session, likely in late September.  

Action Required:

Every member of the AFP should be asking their MP for their assistance again for the fall session when the NPD legislation is expected to be considered again. AFP will be sending out a legislative alert on this issue in early September.


The bill still has a very good chance of passage, and AFP has many opportunities to work with MPs throughout the year. 

In the meantime, AFP wishes to thank all of its members who contacted their Members of Parliament (MPs) in support of the bill. AFP understands that many fundraisers talked with several offices about the legislation, and we very much appreciate their work.

AFP also would like to thank Senator Jerahmiel S. Grafstein (Liberal, Metro Toronto), Senator Terry M. Mercer (Liberal, Northland Halifax), Mr. Michael Savage (MP, Liberal, Dartmouth-Cole-Harbour), and all of their staff for the continued hard work and dedication on this file.  

For additional information, please go here:

If you have any questions, contact Jason Lee, director, government relations, at

AFP Submits Pre-Budget Consultations Brief


In August, as part of the Standing Committee on Finance’s Pre-Budget Consultations, AFP submitted testimony calling on Parliament to eliminate the capital gains tax on gifts of land and real estate.

Action Required:

None at this time.


This year, the committee asked for organizations to provide one recommendation that reflects the most important federal program spending or taxation priority. In its brief, AFP urged Parliament to eliminate the capital gains tax on gifts of land and real estate. AFP added that the government and the nation’s economy both benefit when the voluntary sector receives the necessary resources it needs and that this important charitable giving incentive could help provide those resources.

AFP also reminded the committee that it had already endorsed the proposal in its 2004 report. In addition, the Senate Banking Committee supported a similar provision in a report it published on ways to encourage charitable giving.

AFP plans to testify before the committee about this issue later this year.

You can find AFP’s brief below, in the attachments section. 

AFP Submits Comments Regarding the CRA’s Proposed Fundraising Guidelines


AFP, Imagine Canada and the Health Charities Coalition of Canada filed a “Sector Submission” to the Canada Revenue Agency (CRA) Charities Directorate on Friday, Aug. 29, in response to CRA’s Consultation on proposed policy on fundraising by Registered Charities. More than eighty-five organizations formally endorsed the sector Submission.

Action Required:

None at this time.


In the comments, AFP and others agreed with the CRA’s strong stance against tax shelter abuses. These abuses damage the sector’s reputation, and we applaud the CRA’s efforts to eliminate them. However, AFP and the coalition also noted that many organizations were uneasy with what appears to be the assumption by the CRA that fundraising itself is inherently something charities should not do. 

The Grid: Encouraging Oversimplification

The core of the proposed guidelines is a fundraising cost-ratio grid.  We support greater disclosure about fundraising costs. However, if the ultimate goal of these guidelines is to increase consistency and transparency, we believe the proposed grid will not serve this purpose and may be counterproductive.

Suggestions for Improvement

AFP and the coalition made the following suggestions:

1. Simplify the guidelines: Add a section on the T3010A where the charity must disclose its cost allocation methodology and other major assumptions used in calculating its fundraising expenses and revenues. In addition, another section should be added to the T4033A containing simplified instructions for calculating fundraising revenues and expenses. Including this section in the T4033A will ensure that small charities and preparers who are unfamiliar with the T3010A see the guidelines in a simplified and more easily understandable form.

2. Provide Guidance on Fundraising Revenue: Offer guidance on calculation of fundraising revenue as well as costs is required.

3. Endorse Third-Party Fundraising: Provide clarification that third-party fundraising is not “bad” in and of itself. A well-written contract will protect the charity from abuse and help maximize the return on its investment. Contract checklists and sample third-party contracts might be posted on the CRA website.

4. Allow for a Phase-In Period: Include a phase-in period. Charities will need time to adapt fundraising practices, renegotiate third-party fundraising contracts if necessary, and gather the information to make proper disclosure of fundraising revenues and costs, as well as other associated information.

AFP, Imagine Canada and the Health Charities Coalition of Canada continue to work with the CRA on this issue.

You can find the group’s submission below, in the attachments section.

AFP and Imagine Canada Petition CRTC’s Telemarketing Rules


AFP and Imagine Canada filed a joint Petition to the Governor in Council (the federal Cabinet) on April 28, 2008, asking Cabinet to require the Canadian Radio-television and Telecommunications Commission (CRTC) to change its position on new telemarketing rules and the federal Do-Not-Call List and their application to charities.

Action Required:

None at this time.


The petition focuses on the CRTC decision relating to the new national Do-Not-Call List (DNCL) established under the Telecommunications Act.  In that decision, the Commission ruled that “it is necessary to make rules requiring all telemarketers…, including those making unsolicited telecommunications that are exempt from the National DNCL Rules, to register with…the National DNCL operator… and to pay a fee.” The decision was handed down despite the fact that Parliament explicitly exempted registered charities from the DNCL. 

The petition filed by AFP and Imagine Canada states that Canada’s charities object, as a matter of public policy, to the requirement that they must register and pay fees under the national DNCL regime, given the statutory exemption of telemarketing activities by charities. The impact of the CRTC Rule is that not only are charities required to establish and pay for their own organizational-level DNCL regimes, they must also register with and pay for the national regime, from which their activities are exempt.

Paying for the costs of a federal regulatory regime from which the activities of charities are exempt is not a charitable purpose, nor is it a reasonable operating expense for registered charities.

Cabinet has up to 12 months from the time of the CRTC decision in January 2008 to render its decision.

In addition to Imagine Canada and AFP staff, the Petition was prepared with volunteer support from David Stevens, partner, Gowlings LLP, Andrew Roman, partner, Miller Thomson LLP, and Bob Wyatt, executive director, The Muttart Foundation.

That brief is available below, in the attachments section.


AFP and Imagine Canada Brief — PDF Format, 99403KB

Fundraising Coalition Comments — PDF Format, 175031KB

AFP Pre-Budget Consultations Brief — PDF Format, 225248KB

AFP Comments Regarding the CRA’s Proposed Fundraising Guidelines — PDF Format, 234349KB

Comments to the IRS on Form 990 — PDF Format, 154580KB

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