In light of recent developments in Congress, Philanthropy West Virginia is providing updates to our members on the policy proposals impacting charitable giving for nonprofits and foundation grantmaking. The current proposals before the U.S. Congress are identified to have a major impact on charitable giving, nonprofits, and foundations in our state. Current proposals include:
- Reducing the itemized charitable deduction for only 5%of Americans being able to access it(U.S. House & Senate versions both)
- Simplifying the excise tax on private foundationsto 1.4%(U.S. House version only)
- Imposes new reporting requirementson the sponsoring organizations of Donor Advised Funds (DAFs), such as community foundations. The House bill requires such organizations to annually disclose their policies on inactive DAFs as well as the average amount of grants made from their DAFs.(U.S. House version only)
- Johnson Amendment impacts:the U.S. House bill creates a special exception by permitting Section 501(c)(3) organizations to make political statements in the ordinary course of business.It modifies the existing political campaign prohibition on Section 501(c)(3) organizations by providing that such organizations will not fail to be treated as organized and operated exclusively for Section 501(c)(3) purposes or deemed to have participated in a political campaign solely because of the content of any statement which is made in the ordinary course of the organization’s activities and results in the organization incurring not more than de minimis incremental expenses. (U.S. Senate removes this provision protecting the Johnson Amendment)
Check out resources providing full summaries and updated information on the proposals in Congress below:
- National Law Review Article “Tax Reform & Nonprofits: The Devil’s in the Details” on 11/10/2017 provides a condensed overview of the impacts by U.S. House and U.S. Senator proposals. Access it by CLICKING HERE!
- The U.S. Congress’ Joint Committee on Taxation Report released on 11/07/2017 confirms other research that increasing the standard deduction while keeping the charitable deduction as is, as H.R. 1 proposes, will result in far less charitable giving to American communities. Under current law, JCT estimates that 40.7 million taxpayers who itemize will deduct charitable contributions totaling $241.1 billion in 2018. If H.R. 1 is enacted, JCT finds that only 9.4 million taxpayers who itemize will deduct charitable contributions totaling $146.3 billion in 2018. Without changes, H.R. 1 reduces the amount of charitable gifts that taxpayers deduct by nearly $100 billion. You can access the report by CLICKING HERE!
- Review of the Chairman’s Marks in the U.S. Senate on the Proposed Legislation can be accessed by CLICKING HERE!
Philanthropy WV’s statement on the Universal Charitable Deduction can be reviewed and shared by CLICKING HERE!
For talking points to contact WV’s U.S. Senators and your House of Representatives’ member, CLICK HERE!
(Private foundations: Please refer to this COF statement on the self-defense exception allowing lobbying for the universal charitable deduction but note that you can’t encourage your grantees or others to do so.)