This year’s Foundations on the Hill (FOTH) meeting brought together over 250 participants from private foundations across the country, to Washington DC, the largest contingent in its 17 years of history, to speak with a strong, collective voice at Capitol Hill about the vital work of the charitable community. This year’s meeting was more critical than ever because of a new administration, a new Congress and the forthcoming comprehensive tax reform legislation.
Four specific areas of concern were discussed, and FOTH’s position on each concern was conveyed to lawmakers:
- The first concern is on the House’s proposed blue print for comprehensive tax reform. This concern is centered on the House’s plan to double the amount of standard deduction as a means to make filing tax returns simpler. While this is a welcome change, there is a potential major unintended consequence. The plan would cause a reduction in the percentage of itemized tax returns from 33 to 5 percent. Since the current 33 percent of “itemizers” contribute 80 percent of all charitable deductions, this would negatively impact charitable giving. When Congress considers comprehensive tax reform, FOTH urges lawmakers to preserve and protect the full scope and value of the current charitable tax deduction.
- The second concern is in regard to repealing the Johnson amendment. This is a current law that prohibits 501(c)(3) charitable organizations from endorsing, opposing or contributing to political candidates and engaging in partisan campaign activities. Three bills introduced in the 115th Congress would adversely affect this law. FOTH supports the continuation of current law, and protecting religious freedom and nonprofit independence from politics..
- The third concern centers on the simplification of the excise tax. A uniform excise tax rate would increase funds available for local communities by freeing private foundations from the administrative task of calculating the amount of additional eligible expenditure needed to qualify for the lower 1 percent rate. FOTH urges lawmakers to support simplification of the private foundation excise tax to a flat rate of 1 percent.
- The fourth concern is about donor advised funds. These are powerful tools—both for average people who want to make lasting commitments to their communities, as well as for those with significant financial resources who are looking for an alternative to a private foundation. FOTH urges lawmakers to expand the IRA charitable rollover to include rolling funds into donor advised funds.
Read more about FOTH and some of the issues the nonprofit community is facing.
