America Gives More Act
Thursday, August 21, 2014
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. Associated Grant Makers 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.
AGM’s board has endorsed this proposed legislation and encourages our members to lend their voice in support as well. AGM 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 AGM 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 Associated Grant Makers and does not necessarily represent the individual views of AGM Members, trustees and staff of Member organizations.
Explaining the Community Investment Tax Credit for Foundations
Tuesday, August 19, 2014
A new state tax credit taking effect in 2014 provides foundations, individuals and corporations with an unprecedented opportunity to deepen the impact of their philanthropy. The Community Investment Tax Credit (CITC) is designed to encourage individuals, companies, foundations, and others to donate to highly effective organizations that are helping to expand economic opportunities for families and communities across the state. These organizations, called Community Development Corporations, enable local residents to come together and take concrete steps to improve their communities by building affordable housing, renovating dilapidated properties, starting and growing local businesses, helping families build financial knowledge and capacity, and otherwise improving the quality of life in their community. What’s more, emerging research is demonstrating that effective community development can improve community and public health, increase educational attainment, reduce violence and crime, and promote environmental sustainability. This means that donors with a wide range of philanthropic motivations might be interested in the CITC.
The CITC was enacted in 2012 and took effect earlier this year when the state allocated $3 million in tax credits to 38 organizations across the state. These tax credits allow donors to receive a 50% tax credit for every dollar donated to these selected organizations: Give $10,000 and receive a $5,000 tax credit on your Massachusetts state taxes. And if you don’t have any tax liability, you can get a refund! This means that Donor Advised Funds and Foundations can participate as well, with the 50% refund (or rebate) being deposited back into the Fund or the Foundation for future giving. The Mass. Department of Revenue has just released its regulations which explain how different entities can claim the credit.
Foundations with specific geographic areas of focus can target their donations to CDCs serving those areas. Foundations with specific programmatic priorities can target their donations to CDCs which advance those priorities. And foundations that want to support the entire sector can donate to the United Way’s Community Partnership Fund that is aggregating donations on behalf of the entire sector. In each case, state government will effectively match your donation dollar for dollar.
The CITC will generate a total of $6 million for high-impact, resident-led community development in 2014 and twice that amount in 2015 and beyond when the tax credit cap is extended to $6 million annually. The scale and structure of this exciting new program provides a great opportunity for Individuals, foundations and corporations to work with the best CDCs in the state to improve our communities.
For more information, contact Joe Kriesberg or John Fitterer at MACDC or Susan Dickason at the United Way.
Poverty in New England - It’s a Suburban Thing
Thursday, August 14, 2014
In follow-up to “Big Impact, Small Cities”, a program presented by AGM in MetroWest in September 2012, we recently came across this article of interest. At that program, Stephen Pratt, Director of Consulting for Root Cause, presented findings from his article Creating Big Impact in Small Cities, noting that “philanthropy has not yet caught up to the changing demographics of poverty.” This article, Poverty in New England - It's a Suburban Thing by Elizabeth Kneebone, The Brookings Institution, which was published in Communities & Banking, by the Federal Reserve Bank of Boston, touches upon many of the same themes. We welcome your feedback, input and thoughts on what work is taking place at your organization in relation to the issues expressed here.
House Passes America Gives More Act
Thursday, July 17, 2014
The U.S. House of Representatives passed the America Gives More Act of 2014, a package of bills to extend a number of giving incentives for charities. “This legislation is a big win for those who are served by the nonprofit community, which in one form or another, is much of the country,” Joanne Florino, senior vice president for public policy for The Philanthropy Roundtable, said via a statement.
The package, H.R. 4719, is a combination of five measures. Four of them are existing, temporary giving incentives that were allowed to expire on December 31, 2013. The America Gives More Act will make them permanent and retroactive to that date. The fifth will take effect in 2015.
The Art Connection Sets the Mood at AGM's Office
Thursday, July 10, 2014
Associated Grant Makers has received donated original art work through a local organization, The Art Connection. To learn more, please visit their website at www.theartconnection.org.
The artists include:
John Borchard, Madeleine Evans, Marja Lianko, Janet Shapero, David Barnes, Deborah Clearman, Cassandra Tondro, Martha Jane Bradford, Carol Monacelli and David Kupferman.
(artist credit: John Borchard)
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