PUBLIC POLICY UPDATE - WINTER 2011
Slashing the Charitable Deduction is Now ON the Table!
Take action today to urge your Members of Congress to oppose any tax reforms that would harm charitable giving!
The Joint Select Committee on Deficit Reduction is drafting tax code changes behind closed doors, and it is slated to introduce recommendations at the end of the month. It has just been reported that Republicans are open to eliminating certain tax deductions for the wealthy in exchange for a permanent reduction of the marginal tax rates set under President George W. Bush. At the same time, the Democrats are open to capping the tax reduction that high income taxpayers can get from tax expenditures (such as itemized deductions) based upon a percentage of adjusted gross income. This approach was suggested by Martin Feldstein in a New York Times article.
Now is the time for you to tell Congress to preserve the existing charitable deduction!
Various entities, including the Obama Administration, have suggested proposals to alter itemized deductions such as a 28 percent cap on deductions for higher income individuals or a floor that would only allow a tax break for charitable contributions that exceed 2 percent of adjusted gross income.
AFP opposes any proposed change to the itemized deduction (such as a cap or a floor) that would reduce charitable giving.
We urgently need your help!
AFP urges its members to educate their Members of Congress about preserving the current charitable deduction. As a constituent, you represent a key voice that will be heard.
Engaging Networks has generously allowed AFP to use their online platform where you can contact your Members of Congress with the mere touch of a button. Please click this link to send an electronic letter to your House member and two Senators of your state (or copy and paste this link into your browser: http://e-activist.com/ea-action/action?ea.client.id=1686&ea.campaign.id=12160).
We also urge our U.S. members to consider contributing to the AFP Political Action Committee (AFP PAC). The AFP PAC enhances our advocacy reach by giving us greater access to key Members of Congress. You can make a contribution to the AFP PAC online here.
The loss of these charitable dollars will have a direct impact on the nation’s poorest and most disadvantaged. Any changes to the deduction that will diminish charitable giving will eliminate the funds that charities need to fuel their philanthropic missions such as social services, healthcare, education, housing and other essential programs and services that assist those in need.
AFP continues to chair a coalition of umbrella groups and nonprofit organizations and lobby Congress directly. The coalition sent this letter to the Senate Finance Committee. AFP also sent the following submission to the committee in response to the committee’s Oct. 18, 2011 hearing on the charitable deduction.
Senate Version of the Postal Reform Bill Preserves the Nonprofit Rate
As was reported by the Alliance of Nonprofit Mailers, the postal reform bill introduced recently in the Senate by Senators Lieberman, Collins, Carper and Brown is being considered by the Committee on Homeland Security and Governmental Affairs. The bill does not propose any change to existing nonprofit Standard postal discounts, unlike the House version of the bill and a Senator McCain-introduced bill that would phase out the nonprofit rate.
None at this time, but AFP will call upon its members to act if the Senate bill reaches and impasse and the nonprofit rate is threatened.
The Chronicle of Philanthropy wrote the following article about the bill.
Ottawa to Review How it Finances Charities
Parliament recently announced that it intends to look closely at how the federal government finances charities and may institute changes to traditional grants, according to an article in The Globe and Mail entitled “Ottawa looks at rewriting rules on charitable giving.”
None at this time.
As part of its new series on philanthropy, The Globe and Mail reported that to ensure greater accountability in the sector, “MPs on the House of Commons finance committee will soon embark on a broad round of hearings on reforming the rules related to charities.” AFP Canadian Government Relations Chair Ken Mayhew was interviewed as part of this series.
This issue complements AFP’s efforts to address charitable and fundraising issues as part of an ongoing dialogue with the governments and partners in the charitable sector. As was the case with the Canada Revenue Agency’s fundraising guidance, AFP hopes to work closely with Ottawa’s government and others in the sector to provide comments and feedback based upon AFP’s unique insight and expertise as new policies and approaches are developed.
Marcel Lauzière, president and CEO of Imagine Canada, commented on the pros and cons of partnerships at the AFP Leadership Academy in Montreal. It will be crucial that AFP continues to partner with the Ottawa government and others in the sector such as Imagine Canada to ensure that efforts to increase accountability around government grants provides actual transparency, not just added bureaucracy. AFP supports greater transparency and accountability but in a balanced manner that does not hinder charities from fulfilling their philanthropic missions.
In the meantime, AFP continues to leverage its work with the Sussex Strategy Group that provides AFP with advocacy and public affairs consulting around issues such as the Ottawa government’s review of charitable financing. AFP also will participate in Imagine Canada’s National Summit for the Charitable and Nonprofit Sector in November where this topic and many others will be addressed.
Canada’s National Philanthropy Day® Legislation Receives Second Reading
On June 7, 2011, Senator Terry M. Mercer, CFRE (Liberal, Nova Scotia-Northend Halifax) introduced Bill S-201 that would permanently recognize National Philanthropy Day every November 15th. The bill currently is awaiting second reading in the Senate.
Every member of AFP should be asking their MP for their support of the NPD legislation.
Last year, the Senate passed the previous version of the bill and the House of Commons was poised to pass it as well. Unfortunately, the House was unable to take action prior to the election, and the bill died.
NPD acknowledges the entire spectrum of support provided by the voluntary sector and recognizes the profound impact that philanthropy has on the fabric of society. An estimated 50,000 people attend more than 125 NPD events and celebrations across North America every year. Celebrations take place in every province and major metropolitan area in Canada.
During National Philanthropy Day and throughout the month of November, Canadian AFP chapters honor exemplary local philanthropists, volunteer fundraisers, corporations, foundations, media outlets, children and young adults, and fundraisers at every level for their outstanding work in and contributions to the community. They also use this special occasion as a chance to educate the public about the importance of informed charitable giving and meaningful volunteerism.
Canada Revenue Agency to Release Revised Fundraising Guidance in December
The Canada Revenue Agency is poised to introduce a revised, more user-friendly version of the fundraising guidance on its website in December 2011.
None at this time.
Every registered charity in Canada must provide the CRA with their fundraising expenses and revenues. This process often resulted in inconsistently reported results and lowered the value of information donors need to make informed decisions.
To address the importance of transparent and accurate information, the CRA undertook a lengthy and detailed review of their reporting process and procedures in 2008. AFP was one of many groups invited to submit content during this consultation. Thankfully this feedback was considered and in many cases incorporated. The resulting CRA Guidance on Fundraising was released in June 2009. AFP has continued to provide direct feedback on the Guidance to the CRA.
AFP provided these comments to the CRA this past August regarding the proposed revision.
Related AFP ResourcesWrapping Up 2012: Important Tax Reminders for U.S. Nonprofit Professionals
Getting Familiar With the New Form 990
Summer 2008 Public Policy Update
Presidential Campaigns Have Little Impact on Direct Mail Fundraising
IRS Boosts Gas Mileage Rates, Charitable Deduction Unchanged