Washington Snapshot - April 8, 2016

News from the Hill

Charity Bill Introduced in Senate

The Council is pleased to announce that this week, Senators John Thune (R-SD) and Ron Wyden (D-OR) introduced the Charities Helping Americans Regularly Throughout the Year Act (S.2750).

This bill would:

• Express the sense of the Senate that encouraging and preserving charity should be a goal of tax reform;
• Expand IRA charitable rollover to donor advised funds (DAFs), and require disclosure of “inactive funds” policy and aggregate DAF grant percentage;
• Simplify the private foundation excise tax to flat 1%;
• Require electronic filing of the Form 990;
• Authorize the Department of Treasury to regulate the deduction rate for mileage associated with volunteer charitable activities;
• Create an exception for excess business holding tax rules applying to philanthropic business enterprises.

The Council has played an active role in encouraging the introduction of this legislation and is urging lawmakers to co-sponsor this bill. The provisions highlighted above reflect important components of our public policy agenda, and together with our colleagues in the Charitable Giving Coalition—a group of organizations dedicated to preserving the charitable deduction—we have submitted a letter to Senators Thune and Wyden in support of this bill’s position on preserving the charitable deduction.

Executive & Regulatory News

Council Signs Onto Administration's Fair Business Pledge

The Council recently signed onto the Obama Administration’s Fair Chance Business Pledge.

As a part of the growing efforts to reform the criminal justice systems and reduce barriers facing people who have been involved in this system, the pledge represents a call-to-action for members of the private sector to eliminate barriers for individuals with a criminal record and create a pathway for a second chance. It also represents a targeted effort to convene leaders, identify effective strategies, and work as a coalition to accomplish the shared goal of creating a stronger set of opportunities for people who have been impacted by the criminal justice system.

Happening in the States

Exclusive from our colleagues at the National Council of Nonprofits.

States Addressing Employment Policies in Different Ways

2016 is shaping up to be a year when states take the leadership role in setting employment policies, but no two states have yet taken the same approach.

California approved legislation this week to raise the state minimum wage from the current $10 per hour to $15 per hour over a seven-year period. The new law, signed by Governor Brown on Monday, increases the wage rate to $10.50 on January 1, 2017, $11.00 in 2018, and then $1-per-year increases through 2022. The bill delays by one year the increases at smaller nonprofits and for-profit businesses with fewer than 25 employees, meaning the $15 hourly wage would not go into effect at those organizations until 2023.

Also this week, New York State approved budget legislation that includes a minimum wage hike to $15 per hour by 2018, with a one-year delay for employers employing 10 or fewer workers. Earlier this year Oregon raised minimum wage rates over six years, setting three separate rates depending on where in the state a worker is employed (a top rate of $14.75 in urban areas, but less in rural areas).

The New York budget bill also mandates 12 weeks of paid family leave. The program will be funded through a payroll deduction on employees and ultimately pay up to 67 percent of the statewide average weekly wage. In March, Vermont enacted a law requiring employers of all sizes to provide employees five days of paid sick leave annually. Paid leave bills are pending in the District of Columbia and Maryland.

While those states have set policies that exceed federal standards, other states are taking action to restrict local authority on employment policies. Alabama, following the example of Missouri last year, recently enacted legislation preventing local governments from setting their own minimum wage rates. Virginia’s Governor vetoed a similar bill last month. The new North Carolina legislation most noted for banning local ordinances acknowledging LGBT rights, also pre-empts the abilities of cities to mandate wage rates or other employment policies on most contractors (including nonprofits) providing services for the government.

Philanthropy News and Op-Eds

Council Board Chair Pens Op-Ed on Value of Perpetuity

Council Board Chair, and President of the Jessie Ball duPont Fund, Sherry Magill penned a letter to the editor of the Chronicle of Philanthropy this week. This piece was a response to an op-ed published earlier this week, which speculated that perpetuity in philanthropy may not be a productive or effective way to address society’s pressing issues.

Magill challenges this theory, arguing that the central question of “should charitable dollars ‘be deployed more quickly’” cannot be considered independent of another question: “what might the consequences be for the nonprofit and for citizens around the world if more foundations decided to spend their assets over a set period [of time]?”

Drawing on her expertise as a leader in the philanthropic sector, Magill notes that philanthropy is not one size fits all—that the sector is comprised of both foundations that give in perpetuity and foundations that spend down their assets. She invites her colleagues in the field to consider how their communities and their work may be different if their foundations spent down their assets.