The Senate adjourned for the elections without taking up the America Gives More Act (H.R.4719). The Senators voted to approve the Iraq/Syria military plan and to fund the government into December. The House adjourned earlier. Congress is scheduled to return on November 12 and is expected to work into December on its long list of “must pass” legislation, which includes funding the government through the end of the fiscal year (through September 30, 2015) and a tax bill.
What did we get from the push to pass the bill this month?
Conventional wisdom is that the tax bill to be considered in the post-election “lame duck” session could potentially contain all or most of the components of the America Gives More Act. This means that the expansion of the food donation incentive, the streamlined foundation excise tax, and the extended deadline for making charitable donations (to April 15) are still in play. Likewise, the temporary charitable provisions (food donations, conservation easements, and IRA rollover) could be made permanent. No certainties, of course, but the items are undeniably “on the table” for the lame duck tax bill.
We will post updates here as they become available.
America Gives More Act
You may have heard recently about the America Gives More Act (H.R. 4719), a bill that passed in the House of Representatives in July. This bill brings together five tax provisions (described below) related to philanthropy. Philanthropy Massachusetts joins The Forum of Regional Associations of Grantmakers, the National Council of Nonprofits, the Council on Foundations, Independent Sector, Alliance for Charitable Reform, and a number of our sister regional associations in supporting this legislation.
Philanthropy MA’s board has endorsed this proposed legislation and encourages our members to lend their voice in support as well. Philanthropy MA has also sent letters to Massachusetts and New Hampshire Senators to support this legislation as well.
These vital giving incentives will help increase the resources available to charitable organizations that are working hard to help people in need throughout Massachusetts and New Hampshire.
Below, we have included a brief description of the five tax provisions in the America Gives More Act. We have also included talking points from which you may draw to craft your own EMAIL, and we have provided links to submit an email. We have also included mailing addresses, if you prefer to send via USPS.
If you have any questions, please feel free to contact Philanthropy MA Executive Director Jeff Poulos at 617.426.2606 x113 or email Jeff.
AMERICA GIVES MORE ACT Summary
IRA Charitable Rollover
H.R. 4719 would make the IRA charitable rollover permanent law, removing the uncertainty of this tax incentive for charitable giving requiring new legislation every year or two. Under the Rollover provision, individuals age 70½ and older can donate up to $100,000 to charitable organizations directly from their Individual Retirement Account without having to treat the distribution as taxable income. In order to qualify, contributions must go directly to a public charity and be made from traditional IRAs or Roth IRAs. Donors may receive no goods or services in return for their contributions and must obtain written documentation of their contribution from each recipient charity.
Private Foundation Excise Tax
H.R. 4719 would simplify the private foundation excise tax on net investment income to a single rate of 1 percent. The current two rate system is viewed by many foundations as an administrative burden and disincentive for increased giving. Under current law, private foundations are required to pay a 2 percent excise tax on investment income. The excise tax rate is reduced to one percent in any year in which the foundation’s distributions for charitable purposes exceeds the average level of the foundation’s charitable distributions over the preceding five tax years. Foundations spend money on accountants to comply rather than communities. Additionally, the perverse result of this current system is that foundations are penalized for giving away large sums of money when they want to respond to natural disasters or communities in crisis.
Charitable Deduction Deadline
H.R. 4719 would give taxpayers until April 15 to make charitable contributions eligible for the charitable deduction, instead of requiring those gifts to be made by the end of the calendar year.
Food Inventory Donations
H.R. 4719 would make permanent and enhance the benefit of a current provision that allows a tax deduction for charitable contributions of food inventory.
Land Conservation Easements
H.R. 4719 would make permanent and enhance the benefit of a current provision that allows a tax deduction for contributing land conservation easements.
ACTION: >>>>> Please send an email or letter to your Senators to urge Majority Leader Harry Reid and Minority Leader Mitch McConnell to bring the America Gives More Act (H.R. 4719) to the Senate floor for a vote as soon as possible in September when the Senate returns from recess.
Senator Elizabeth Warren
317 Hart Senate Office Building
Washington DC 20510
Senator Edward J. Markey
218 Russell Senate Office Building
Washington DC 20510
New Hampshire Grantmakers:
Senator Jeanne Shaheen
520 Hart Senate Office Building
Washington, DC 20510
Senator Kelly Ayotte
144 Russell Senate Office Building
Washington, D.C. 20510
TALKING POINTS FOR EMAIL OR LETTER
- Urge Majority Leader Harry Reid and Minority Leader Mitch McConnell to bring the America Gives More Act (H.R. 4719) to the Senate floor for a vote as soon as possible in September when the Senate returns from recess.
- These vital giving incentives will help increase the resources available to charitable organizations that are working hard to help people in need throughout our state.
- Simplifying the private foundation excise tax to a single rate, for example, will lift an administrative burden that creates a perverse incentive for private foundations to give less, not more, in times of need. When foundations want to increase their giving for unanticipated grants, such as for disaster relief, they could be penalized with a higher tax burden. Simplifying this complex tax will free up foundations to invest less resources in tax compliance and more in communities in our state.
- The IRA charitable rollover, for example, encourages individuals to donate retirement account assets directly to a public charity without incurring a tax liability on the donation. Rollover donations help countless public charities to fulfill their charitable purposes. Our community foundations manage these rollover gifts and invest them in projects you see every day—from the new center at the local hospital or the new college scholarship program to the preservation of a historic community landmark and community development centers. We know firsthand that the IRA charitable rollover makes a difference in growing philanthropy in our state.
- The IRA charitable rollover, along with the enhanced deductions for food contributions and conservation easement donations, have been passed, expired and extended several times in the past decade. The practice of extending these provisions at the eleventh hour—or later—chills these charitable activities. With certainty, donors can plan in advance and contributions will increase.
- We also know from our work with donors that extending the deadline for claiming charitable donations on the previous year’s tax filing through April 15 will help grow charitable giving in our state. It would provide a natural time for people to make financial decisions in a comprehensive way.
This position is that of Philanthropy Massachusetts and does not necessarily represent the individual views of Philanthropy MA Members, trustees and staff of Member organizations.