Five Minutes for Philanthropy: Take Action on Charitable Tax Extenders

December 2, 2015

Ann Saxton, Vice President

Philanthropy Northwest continuously tracks policy developments and actively connects with our peers, other policy-focused organizations and experts throughout the country. Because we know that many of you speak regularly with your elected officials, we carefully consider whether and when we should alert you about the timing of action in support of a policy issue in which we believe you have interest. We try to do so on a very limited basis, when we believe the likelihood of legislative action to be high.
The year-end federal tax bill currently under negotiation is expected to be completed by December 15. In addition to the reauthorizing the currently expired tax extenders which include three important philanthropic provisions — the IRA charitable rollover, enhanced deduction for contributions of food inventory, and enhanced deduction for contributions of conservation easements — the sector is working to include two additional provisions aimed at promoting charitable giving:

  1. Expand the IRA charitable rollover, making donor-advised funds eligible to receive IRA charitable contributions.
  2. Streamline the private foundation excise tax to 1%.

Our colleagues at the Alliance for Charitable Reform, National Council of Nonprofits, Council on Foundations and others believe this tax extender bill is “the best chance to advance philanthropy in a decade.” The tax extender package will likely come in the form of a two year extension, retroactive to January 1, 2015, though we should take the opportunity to show our support for making these charitable extenders permanent.
We have been informed that new House Ways and Means Chairman Kevin Brady has said that the most effective way to impact legislation is for representatives to hear from 15-20 different people on an issue.

We ask you to take five minutes to contact your members of Congress and encourage their support.

How to contact your legislators

  • Go to Open Congress' legislator lookup tool
  • Enter your zip code and click “show me”
  • Your Senators and Representatives will appear, along with their phone numbers in D.C.
  • Call their office
  • State your name and organization, and ask to speak to the tax staffer
  • You will likely be sent to voicemail or be asked to leave a message with the receptionist. In either case ask them to “tell Senator X or Rep. X to support adding to the tax extenders bill two provisions: one to streamline the private foundation excise to a flat 1% and a second to allow donors to give from their IRAs to donor-advised funds.”

Suggested talking points

  • The House has already passed this legislation three times in the America Gives More Act.
  • IRA Charitable Rollover is a middle class giving tool not a tool for the very wealthy.
  • The average IRA gift is less than $20,000.
  • Donors need planning time with their advisors in order to use the IRA Charitable Rollover effectively — renewing it every year or even every other year causes confusion and loss of gifts to needy charities.
  • Donor-advised funds at community foundations are the most flexible giving tool and allow donors and community foundations the ability to respond quickly to changing and often emergency needs.
  • The collective charitable distribution on donor advised funds exceeds 15 percent so the myth about donor advising funds warehousing money is indeed  a myth.
  • Simplifying the excise tax on private foundations to a flat one percent will make more money available for charitable giving. Our colleagues in Michigan report that one private foundation there confirmed that it can outfit a 400 person elementary school completely with winter clothing for the fee that they have to pay to their accountants to calculate their annual excise tax payment.
  • The charitable nonprofit sector provides jobs to one in ten Americans — more than 10 million jobs.