Washington Snapshot - November 1, 2013
Welcome to November! There are less than 3 weeks until the Charitable Giving Coalition D.C. Fly-In on Wednesday, November 20th! Join your foundation and nonprofit colleagues here in D.C. as we meet with key lawmakers and their staff to advocate for the charitable deduction.
Recent developments on Capitol Hill have elevated the importance of our efforts to protect charitable giving incentives. The budget conference committee began negotiations this week, and tax deductions may again be among the potential revenue-generating options they consider. And, leaders of the tax writing committees remain committed to comprehensive tax reform in which provisions like the charitable deduction are still at play.
It is imperative for leaders in philanthropy and charity to continue to educate lawmakers on the impact of charitable giving on their local constituencies.Check out the Council’s fly-in invitation for more information!
Tax Reform Uncertain as Budget Talks Begin
This week, House and Senate budget conference committee members began the budget negotiations mandated in the agreement to end the government shutdown and suspend the debt ceiling. Ahead of the budget negotiators’ first meeting, 29 business coalitions and trade associations released a statement urging committee members to include tax reform instructions in any budget agreement they reach. "The undersigned coalitions and trade associations share a common interest in pro-growth, comprehensive tax reform in the United States,” the organizations said.
But despite this lobbying push, House Budget Committee Chairman Paul Ryan (R-WI-3) and Senate Majority Leader Harry Reid (D-NV) have said that the budget conference committee will not pursue a “grand bargain” that includes comprehensive tax reform, in part because Republicans and Democrats remain divided over the issue of revenue. Many Democrats, including the Administration, have hinted that they are open to cuts to entitlement programs like Medicare and Medicaid to replace sequestration, the across-the-board spending cuts that are due to hit federal agencies on January 15th. Democrats also want to make revenue-raising changes to the tax code, which many Republicans are firmly against. Political commentators and Washington insiders say to keep expectations low—the committee will struggle to reach consensus on the budget and will probably not have the bandwidth to tackle broader policy changes.
Meanwhile, Senate Finance Committee Chairman Max Baucus (D-MT) and House Ways and Means Committee Chairman Dave Camp (R-MI-4) are feeling mounting pressure to make movement on tax reform. Camp vows that he will release some type of proposal before the end of the year, which may occur as early as mid-November. Senator Baucus also released a public statement this week reiterating his commitment to tax reform, focusing on the corporate tax code. Our sources tell us that Baucus will likely release several tax reform discussion drafts over the next few weeks that will likely address international taxation, IRS reforms, and changes to the educational tax provisions.
As we mentioned in last week’s Snapshot, dozens of tax benefits known as “tax extenders”—including the IRA charitable rollover—are on the line this year. Tax committee members typically wage an annual battle over which benefits should be renewed before they expire in January, but this year Congress is preoccupied with the broader fiscal debates. We’ll let you know what we hear from our sources as the deadline for renewing these tax preferences approaches.
Stay tuned for more tax reform and budget negotiation updates in the coming weeks as we catch the inside scoop on what is happening on Capitol Hill!
Noteworthy News and Op-eds
Washington Post investigation and sector response
As many of our readers already know, this week the Washington Post released an investigative report that looked at the public tax filings of thousands of nonprofits around the country between 2008 and 2012. The Post found that over 1,000 organizations reported that they had discovered a “significant diversion” of assets, including losses attributed to theft, investment fraud, embezzlement and other unauthorized uses of funds.
As Tim Delaney of the National Council of Nonprofits (NCNP) points out in his op-ed responding to the report and NCNP’s letter to Washington Post editors, many of the organizations discussed were “victims of scams by for-profit vendors, employee theft, and outside investment advisers,” rather than perpetrators of any wrongdoing. Delaney encourages nonprofit leaders to reach out to local reporters to shift the headlines to the vital work that nonprofits are engaged in all across the country. Rick Cohen’s piece in Nonprofit Quarterly op-ed echoes Delaney’s view, and adds that many nonprofits are highly transparent compared to their for-profit counterparts. “Don’t misread the 1,000 victimized nonprofits in the Washington Post database as evidence of a broken nonprofit sector—because it’s not,” Cohen emphasized to readers. Independent Sector President and CEO Diana Aviv also sent in a letter to Washington Post editors on the issue, stating that the majority of nonprofits are good actors who are “committed to deepening the public trust.”
Knight Foundation report on nonprofit news ventures
This week, the Knight Foundation released a report that looks at the evolution of 18 nonprofit news sites to get a sense of how these new organizations form and grow. Nonprofit Quarterly published a flattering commentary on the report and its recommendations for nonprofit media sites, stating: “Philanthropy in other fields should think about the need for such practically useful information.”
Decision-making in tough economic times
With continued uncertainty about the federal budget and tax reform, we hear from our members that nonprofits often come to you for advice on how to manage in uncertain times. A recent Nonprofit Quarterly piece lists critical considerations for organizational decision-making when a charitable organization is experiencing financial duress.
Redistribution of private charitable dollars
Back in the September 5th edition of Snapshot, we discussed Stanford professor Rob Reich’s piece on the school funding gaps that can be amplified by local school foundations in California. The issue of whether philanthropic dollars can perpetuate social inequities is back in the news this week. New York City Mayoral candidate Bill de Blasio came out in support of legislation to require the Central Park Conservancy to redistribute 20 percent of its operating funds to other city parks. We are following the question over the redistribution of private charitable dollars closely, and will continue to highlight it for you in upcoming Snapshots.
Interview with Council of Michigan Foundations President & CEO Rob Collier
Rob Collier of the Council of Michigan Foundations sat down with Bridge Magazine recently to talk about trends in Michigan philanthropy. Collier highlighted a movement among Michigan philanthropic organizations that focuses on funding the needs of rural communities, particularly access to education. “Foundations are coming together to see what they can do to be helpful in addressing rural issues,” he told the magazine.
HUD Secretary's Award for Public-Philanthropic Partnerships
Wells Fargo Regional Foundation - New Jersey Revitalization Grants Program
Wells Fargo Regional Foundation aims to improve the quality of life for children and families living in low-income communities in Eastern Pennsylvania, New Jersey, and Delaware by concentrating resources on comprehensive, neighborhood-based economic and community development initiatives.
Since 2003, the Wells Fargo Regional Foundation’s Neighborhood Grants Program, the New Jersey Department of Community Affairs’ Neighborhood Revitalization Tax Credit Program (NRTC) and the Housing and Community Development Network of NJ (The Network) have worked together to create a resident-driven collaborative approach to revitalize New Jersey’s low-income neighborhoods.
Women's Foundation for a Greater Memphis - Memphis HOPE
The Women’s Foundation for a Greater Memphis (WFGM) joined forces with the City of Memphis, the Memphis Housing Authority (MHA), and national nonprofit Urban Strategies to implement US Memphis HOPE, a model public-philanthropic partnership dedicated to breaking the cycle of intergenerational poverty for Memphians. Since 2004, the partnership has secured $88 million in grant funds under the U.S. Department of Housing and Urban Development (HUD) HOPE VI program for the community revitalization of three public housing locations — Lamar Terrace/University Place, Dixie Homes/Legends Park and Cleaborn Homes. The transformation of Memphis’ languishing public housing became the keynote project of this partnership.
Keep in touch!
Please feel free to reach out to any of us on the public policy team with any comments or concerns, or to share an issue, article, or op-ed you’d like to see covered in a future Snapshot.
