January 2009
January 30, 2009
Revised IRS Publication Explains Latest Charitable-Contribution Rules
In a revised guide for taxpayers, the Internal Revenue Service explains how people who used their cars to help charities provide disaster relief during Midwestern storms last year can take an increased deduction for the miles they drove.
Each year in its Publication 526, “Charitable Contributions,” the IRS tells taxpayers how to claim deductions for contributions, describes organizations that are qualified to receive deductible gifts, and explains the effects of changes in federal law.
The newly revised publication, for use in preparing 2008 tax returns, describes how a federal law enacted last fall provided tax incentives for charitable giving to help victims of summer storms, tornadoes, and floods in the Midwest.
For example, people who used their cars to provide disaster relief in the Midwest can deduct up to 41 cents per mile, depending on the date of their volunteer work. The usual charitable mileage rate is 14 cents per mile.
Volunteers in the Midwest can also exclude from their income any reimbursements from charities for the use of their vehicles, up to the amount of the standard business rate in effect at the time.
The revised Publication 526 also details how the federal law enacted last fall allows people older than age 70½ to give up to $100,000 to charity from their individual retirement accounts each year without paying income taxes on the money. That provision had expired at the end of 2007 but was renewed for 2008 and 2009.
January 29, 2009
White House Office of Social Innovation in the Works?
President Barack Obama seems to be in the process of setting up an Office of Social Innovation in the White House. At least, such an entity is included on a list of White House offices on an official Web page describing the Executive Office of the President.
However, no information is provided about the office and White House press spokesmen have so far not returned messages asking for explanation.
Many nonprofit leaders have been calling for a White House or federal office to promote innovative approaches to social problems and help entrepreneurial nonprofit groups expand their programs. America Forward, a coalition of more than 70 nonprofit groups, for example, has proposed a White House Office of Social Innovation and Results.
“The office would lift up promising nonprofit organizations for greater visibility and promote outcomes measurement and competition for federal funding within the nonprofit sector,” the group says. (Jennifer Macauley, an America Forward spokeswoman, says she has no information about the status of that proposal.)
In a “progressive blueprint” published last November, the advocacy arm of the Center for American Progress, a liberal think tank with close ties to Mr. Obama, proposed a White House Office of Social Entrepreneurship to give innovative nonprofit leaders a “greater voice in the public-policy debates of the day.”
It suggested that the office, for example, ensure that all relevant federal agencies spend money to help successful social projects expand and create an “impact fund” at the Corporation for National and Community Service to help nonprofit groups collect data and better evaluate their success.
President Obama may have taken some of those suggestions to heart. Stay tuned.
Senator Says He Has Won Colleagues' Commitment on Charity Mileage Issue
Sen. Charles E. Grassley, the senior Republican on the Senate Finance Committee, says key colleagues have agreed to work to get a provision that would increase the tax deduction for people who use their vehicles as part of their volunteer work for charities into the Senate version of the economic-stimulus package.
Mr. Grassley said in a statement that he sought to offer an amendment on the mileage provision when the finance committee considered its part of the economic-stimulus bill earlier this week.
He said he withdrew the amendment after he received a commitment from fellow Senators — including Max Baucus, the Montana Democrat who chairs the committee — to deal with the mileage provision when the economic-stimulus legislation comes to the Senate floor.
“The stimulus [package] focuses on paying jobs, but the non-paying jobs are just as important for a strong society, especially providing help in an economic crisis,” Mr. Grassley said.
Under federal law, volunteers who drive their cars for charitable purposes may deduct 14 cents a mile for their car costs or be reimbursed by a charity at that rate without the payment being subject to federal income tax.
Mr. Grassley is a co-sponsor of a bill introduced earlier this year that would allow the Internal Revenue Service to continually adjust the mileage rate for charitable activities for inflation and other costs without seeking Congressional approval as the IRS already does for business, medical, and moving expenses.
The current business rate is 55 cents per mile; the medical and moving rate is 24 cents.
Under the bill — the Giving Incentives to Volunteers Everywhere Act, or GIVE Act — the IRS could set the rate as high as the business rate but no lower than the deduction set for medical and moving expenses.
Sponors of the measure said that despite the recent decline in oil prices, the cost of a gallon of gas still outpaces the current mileage deduction limit.
“Unfreezing the charitable-mileage rate allows those charities that are on the front lines of the economic crisis to provide some incentives to volunteers,” said Senator Grassley. “Giving the IRS the discretion to change the charitable-mileage rate is a no-brainer from a tax policy perspective.”
Senator Encourages Foundations to 'Step Up and Help' Charities
As Independent Sector and other nonprofit associations in Washington push Congress to help cash-strapped charities, at least one key member of the Senate is resisting the move.
In a statement to the news media, Sen. Charles E. Grassley, the senior Republican on the Senate Finance Committee, said that charities should seek support from foundations and other donors before asking for financial aid from the government.
“I don’t like to see any segment of our economy, including the nonprofit sector, have a hard time getting credit. Private foundations, donor-advised funds, and other grant-making charities are already set up to make payouts and even loans, if they want to, with an oversight structure already in place,” he said.
“They have to do oversight of their grantees when they give grants to make sure the grants are being used for their intended purpose. Instead of reinventing the wheel with a new layer of government loans, I’d like to see these charities step up and help their fellow tax-exempt groups. That would be more efficient and without more government involvement, which charities usually dislike.”
Independent Sector, which represents about 600 nonprofit organizations, wanted Congress to include a $15-billion bridge-loan fund for charities in the economic-stimulus proposal. (See a Chronicle article about the credit challenge facing many charities.) So far, the Senate and the House of Representatives have not included such a fund in their legislation to bolster the economy.
An aide to Mr. Grassley told The Chronicle that another Independent Sector proposal — to reduce the foundation excise tax — is unlikely to be in the stimulus bill as well.
January 28, 2009
Senate Stimulus Plan Offers Less Generous Benefits to Arts and Social-Service Groups
One casualty in the economic-stimulus spending plan that was approved by the Senate Appropriations Committee on Tuesday: new money for the National Endowment for the Arts.
The House version of the “American Recovery and Reinvestment Act of 2009” (H.R. 1) proposes $50-million for the federal arts agency, so it can provide grants to struggling arts groups. The Senate version, S. 336, offers no money for the agency.
Americans for the Arts, an advocacy group, is pressing Congress to keep the $50- million appropriation, arguing that it would help cash-starved arts groups save more than 14,000 jobs.
“We have our champions in Congress and we will work with them and their staffs and with [Nancy Pelosi, the House Speaker],” says Liz Bartolomeo, a spokeswoman for the group. The group says every dollar of money from the National Endowment for the Arts generates an additional $7 in state, local, and private contributions.
Among other differences between the House bill and the version approved by the Senate committee:
- The House proposes adding $200-million to the Emergency Food and Shelter Program, which is governed by a board of social-services charities; the Senate proposes $100-million.
- The House proposes $100-million for the Compassion Capital Fund, which provides grants to religious and other charities to provide social services; the Senate included no money for the program.
The House is set to vote on its version of the bill later today.
Senator Urges Colleges to Avoid Tuition Increases
Sen. Charles E. Grassley, the senior Republican on the Senate Finance Committee, says he hopes a new report showing a big drop in the value of college endowments due to the crash in the stock market and other investments does not lead higher-education institutions to put the squeeze on students.
“I hope colleges won’t use the recent volatility as an excuse to raise tuition or freeze student aid,” said Mr. Grassley in a statement.
“They might forget the very recent years of double-digit gains or that many of them still have a lot of money in the bank,” the senator continued. “They might overlook that there always seems to be money for a salary increase for the president or a football coach.”
Earlier this week, the National Association of College and University Business Officers released a report showing that endowments at institutions surveyed by Nacubo lost 22.5 percent of their value from July through November.
Senator Grassley has been leading an effort to determine whether colleges and universities should be required to spend a minimum percentage of their endowments to reduce costs for students.
“Contrary to what colleges might argue, the weak economy makes a strong case for more endowment spending on student aid,” Mr. Grassley said. “If an endowment is a rainy day fund, it’s pouring. Colleges’ smart saving and investing could really help students right now. And the right kind of modest pay-out requirement for endowments above a certain dollar amount might do a lot of good for universities and students regardless of economic conditions.”
Key Senate Committee Approves Nonprofit Stimulus Spending
Note: The Chronicle originally reported that committee approved money for YouthBuild USA, a nonprofit group in Somerville, Mass. In fact, the money would go to YouthBuild, a program operated by the U.S. Labor Department that provides grants to groups that train low-income young people in construction skills. YouthBuild USA supports the federal program—for example by offering training, setting quality standards, and raising private money—but will not directly receive any stimulus money. This item has been corrected to omit the error.
The Senate Appropriations Committee approved part of the proposed economic-stimulus package on Tuesday, including spending that would help nonprofit groups weather the recession and meet rising demand for social services.
The committee has not yet posted online a full list of the measures it approved, but a summary says it endorsed the following proposals:
- $2.1-billion for Head Start and Early Head Start, the early-education programs.
- $2-billion for Child Care and Development Block Grants, which help states provide child-care services to low-income families.
- $400-million for Social Services Block Grants, to help states provide services to unemployed and low-income people.
- $200-million to AmeriCorps, the national-service program, to create positions to help nonprofit groups hit by increased need and shrinking donations.
- 150-million for food banks.
- Money for YouthBuild, a federal program that trains low-income young people to do construction work. (The exact amount is not listed, but the House version of the bill proposes $50-million.)
Separately, the Senate Finance Committee on Tuesday approved another part of the stimulus bill, $87-billion to increase temporarily the federal share of Medicaid, the health program for poor people that provides revenue to many nonprofit medical centers.
The House is scheduled to vote on its $825-billion stimulus legislation — the “American Recovery and Reinvestment Act of 2009” (H.R. 1)—on Wednesday.
January 23, 2009
Charities React to Repeal of Global Gag Rule
Charities that provide family-planning services are celebrating Barack Obama’s repeal today of a policy that prevented government money from supporting groups that counsel women overseas on the availability of abortion.
Known as the “global gag rule,” the policy was first implemented by President Reagan and later reinstated by President George W. Bush when he took office in January 2001.
“With the stroke of a pen, President Obama has lifted the stranglehold on women’s health across the globe,” Cecile Richards, Planned Parenthood’s president, said in a statement. “His repeal of the global gag rule ends eight long years of policies that have blocked access to health care for women worldwide.”
Advocacy organizations that oppose abortion raised concerns about the move.
In a statement on its Web site, the group National Right to Life said that President Obama’s move would “divert many millions of dollars away from groups that do not promote abortion, and into the hands of those organizations that are the most aggressive in promoting abortion in developing countries.”
—Caroline Preston
January 22, 2009
Obama Expected to Overturn 'Global-Gag' Rule
President Obama is expected to scrap a rule that prevents government money from supporting family-planning groups that counsel women overseas about the availability of abortion.
According to CNN, Mr. Obama is considering overturning the so-called global-gag rule this week.
President Ronald Reagan first instituted the rule as an executive order in 1984 at a population conference in Mexico City. President Bill Clinton rescinded it, but President George W. Bush reinstated it.
Several international aid groups, including Population Action International and Population Services International, have called for the rule to be overturned.
Antiabortion groups, which are gathering in Washington today, have raised concerns about Mr. Obama’s views toward the rule and other abortion issues, reports The Washington Post.
January 21, 2009
Obama Urged to Scrap Bush Executive Order on Religious Groups
As part of a top 10 list of Bush administration executive orders that President Obama should scrap immediately, Slate magazine says, No. 8 is Mr. Bush’s rule that allows religious charities that receive federal money to discriminate in hiring based on religion.
The authors, Emily Bazelon, Slate senior editor, and Chris Wilson, an editorial assistant, identify two problems with the rule.
“The first is that the groups get to define for themselves who counts as a good Baptist or a good Jew — and what if they decide someone is out because he or she is gay, for example? The second problem is that it’s not really clear why Catholic charities should be able to hire only Catholics to serve meals to the homeless if that work is being funded by the government,” they write.
President Obama has pledged to continue the White House Office of Faith-Based and Community Initiatives but has said he would change the hiring rule.
Read The Chronicle’s article about what will happen to the so-called faith-based imitative under the Obama administration.
January 16, 2009
Antipoverty Groups See Opportunity in Economic-Stimulus Plan
Now that House Democrats have released their economic-stimulus package, antipoverty charities say the proposal is an unprecedented opportunity to help the needy.
The package includes billions of dollars in spending on Medicaid and other federal programs that will help nonprofit groups in cash-strapped states, reports The Chronicle.
Calling it “the mother of all stimuli,” the Bread for the World Institute, an antipoverty group in Washington, says that the package is “positively breathtaking. There’s no other way to describe it.”
“For those who are used to fighting for every nickel of new spending on antipoverty, this is also, perversely, our moment. We’ll never see spending like this ever again,” an unnamed staff member writes on its blog.
Angela Glover Blackwell, chief executive of PolicyLink, a nonprofit group in Oakland, Calif., has also said the stimulus proposal could provide a huge lift to impoverished Americans — if it’s spent wisely.
What do you think of the stimulus package? How can it best help nonprofit groups? Click on the comment button below to share your views.
January 14, 2009
Bill Would Raise Rate for Volunteers' Car Use
Several members of Congress are trying again this year to pass legislation that would increase the tax deduction for people who use their vehicles as part of their volunteer work for charities.
Under federal law, volunteers who drive their cars for charitable purposes may deduct 14 cents a mile for their car costs or be reimbursed by a charity at that rate without the payment being subject to federal income tax.
Last year, in a bid to help volunteers cope with high gas prices, a dozen bills were introduced in Congress that would have increased the mileage rate in various ways.
None of the measures passed. But today one of the bills was revived in the new session of Congress: the Giving Incentives to Volunteers Everywhere Act, or GIVE Act.
The measure would allow the Internal Revenue Service to continually adjust the mileage rate for charitable activities for inflation and other costs without seeking Congressional approval as the IRS already does for business, medical, and moving expenses. The current business rate is 55 cents per mile; the medical and moving rate is 24 cents.
Under the bill, the IRS could set the rate as high as the business rate but no lower than the deduction set for medical and moving expenses.
Sponsors of the measure said that despite the recent decline in oil prices the cost of a gallon of gas still outpaces the current mileage deduction limit.
“The volunteer spirit of America has always been a source of hope and strength during troubled economic times,” said Sen. Benjamin L. Cardin, a Maryland Democrat who is a sponsor of the legislation. “Our volunteers and charitable organizations need this fix now.”
Other Senate sponsors include John Ensign, a Republican from Nevada; Charles E. Schumer, a New York Democrat; and Olympia Snowe, a Maine Republican. In the House, identical legislation was introduced by several members, including Reps. John Lewis, a Georgia Democrat, and Devin Nunes, a Republican from California.
Nonprofit Tax Expert Urges IRS to Clarify Stance on Governance Practices
A former top official of the Internal Revenue Service is asking the Treasury Department to publish guidelines that would tell charities — and the IRS itself — what the federal government specifically expects from nonprofit organizations on matters of governance.
The federal tax code does not explicitly set out specific governance standards for the IRS to enforce, but the tax agency has shown increasing interest in keeping an eye on charity governance practices.
“Because there is no precedential federal tax law guidance that prescribes the appropriate standards for nonprofit governance, a number of my clients have raised questions about how to comply with the new IRS initiatives,” Marc Owens, a lawyer specializing in nonprofit issues in Washington, told the Treasury Department in a letter today.
“To address these inquiries, it would be helpful to have clear direction from the Treasury Department regarding the specific standards to which nonprofits will be held,” said Mr. Owens, who is the former chief of the IRS’s tax-exempt division.
Mr. Owens noted that the IRS’s internal “work plan” for 2009 includes the development of a governance checklist for agents’ use in conducting audits and that the new Form 990 informational tax return includes questions for charities about their governance policies.
“Additionally, we are aware of specific situations in which the service has questioned the governance practices of nonprofit organizations in the course of an ongoing examination,” Mr. Owens said.
But, he said, to date the Treasury Department has not issued guidelines that charities can rely on, a situation that he said creates a risk that “similarly situated” organizations could get differing treatment from the IRS.
“For example, without enforceable uniform standards, [organizations] who submit exemption applications or ruling requests may obtain disparate and subjective interpretations of the service’s policy, depending on the agent who happens to handle the matter,” Mr. Owens wrote.
In speeches in recent months, IRS officials have explained the tax agency’s interest in governance matters.
In November, Steven T. Miller, commissioner of the IRS’s tax-exempt and government-entities division, told a conference that “a well-governed organization is more likely to be compliant with the tax law, while poor governance can easily lead to trouble. Good governance also allows organizations to self-identify and self-resolve problems.”
Mr. Miller added: “We are not interlopers trying to regulate an area that is beyond our sphere. Rather, the effects of good or bad nonprofit governance cut across virtually everything we see and do in our work.”
Senate Aide Says IRS Could Question Board Members Over Madoff Investments
A top Senate aide says the Internal Revenue Service might have grounds to tax board members of private foundations who placed all of their organizations’ assets with Bernard L. Madoff, the investor who allegedly ran a $50-billion pyramid scheme.
Under Section 4944 of federal tax law, foundations and their officers, directors, and trustees can be liable for tax if the organizations make any investments that would financially jeopardize the carrying out of the foundations’ work.
“I’d be curious to know if any of those foundations [that placed all assets with Mr. Madoff] considered the impact of Section 4944 before they made those investments,” said Theresa Pattara, tax counsel to Republicans on the Senate Finance Committee. “It would be fair to ask for board minutes, the thought processes, and the decision making they went through before putting all their money at risk.”
The Madoff scandal may prompt Congress to make a second attempt to require charities, as well as foundations, to abide by prudent-investor rules. In 2004, staff members on the Senate Finance Committee proposed expanding the rules to all public charities.
In a statement, the senior Republican on the finance committee, Sen. Charles E. Grassley, said that he might try again this year to apply the rules to charities. “Better transparency of investments might help to prevent this kind of mess in the future,” said Mr. Grassley. “It may be time to re-examine that reform.”
See The Chronicle’s full story on board members’ potential liability related to Madoff investments.
— Ben Gose
Community Foundations and Arts Groups Ask for Economic-Stimulus Help
As Congress and President-elect Barack Obama grapple with how to structure their economic-stimulus measures, two more groups have proposed ways the package could help the nonprofit world:
- Five community foundations in Ohio and Pennsylvania have asked for almost $165-million to help nonprofit groups in their states meet a surging demand for social services from people who have been hit hard by the country’s recession.
- Americans for the Arts, an advocacy group, has proposed a package of measures to increase spending on arts groups.
The foundations — the Cleveland Foundation, Columbus Foundation, Philadelphia Foundation, Pittsburgh Foundation, and Toledo Community Foundation — today submitted a report to the Obama transition team and Congress that documents an “abnormal, rapidly increasing stress on the safety net” in their cities.
“We understand the need to bail out financial institutions and businesses, but we also need to focus on those who have lost their jobs, people who are hungry and cold, and families who are losing their homes,” Grant Oliphant, president of the Pittsburgh Foundation, said in a statement.
A study commissioned by the grant makers calculated that it would take $3.3-billion over the next two years to cover increased demands for social services from both government and charities in Ohio and Pennsylvania. The foundations’ request for aid in the stimulus package covers only money that would help local charities provide services like food and transportation subsidies, or about $165-million.
The study documents rising demand for help in areas including food, mortgage payments, utilities, transportation, and child care.
For example, the Cleveland Foodbank delivered 46 percent more food in June through October 2008 than it did during the same period a year earlier.
Action-Housing, an affordable-housing charity in Pittsburgh, saw calls about mortgage-delinquency problems jump 50 percent during the last six months. The United Way of Greater Cleveland received 70 percent more requests for transportation assistance in June through November 2008 than it did in the same period in 2007.
“It is our intention that this report serves also as an urgent indicator of what is happening across the country,” Mr. Oliphant said. The Pittsburgh Foundation started an emergency fund, Neighbor-Aid, last month with the United Way of Allegheny County to help nonprofit groups meet the increased demand for social services. It has raised $800,000, the statement said.
Americans for the Arts urged lawmakers to consider the needs of arts organizations — which it says employ 5.7 million people and generate $166.2-billion in economic activity — in crafting the stimulus package.
“This marks an unprecedented opportunity for our nation’s arts community to play a role in revitalizing America’s economy,” Robert L. Lynch, the group’s president, said in a statement.
The group proposed the stimulus measures provide at least $2-billion under the Community Development Block Grants program for projects to build and modernize arts facilities; and emergency funds to the National Endowment for the Arts, National Endowment for the Humanities, and Institute of Museum and Library Sciences.
It also proposed increased arts funds for a range of federal programs, including the Labor Department’s adult, youth, and dislocated worker programs; the Agriculture Department’s rural-development program; the Commerce Department’s economic-development grants; and the Transportation Department’s transportation-enhancement program.
See The Chronicle‘s articles on the troubles arts groups are experiencing because of the recession, on a request from public broadcasters for help in the stimulus package, and on other proposals to help nonprofit groups.
IRS Podcast Offers Tutorial on Politicking Rules
The Internal Revenue Service has released a series of new podcasts to help charities, businesses, and individuals during the 2009 tax filing season.
In one podcast, Steve Miller, the commissioner of the IRS’s Tax-Exempt/Government Entities division, offers nonprofit officials information about the agency’s rules on political activities by nonprofit organizations.
The three-minute, 30 second audio segment comes as part of a larger effort by the agency to teach nonprofit groups about the rules that prohibit political activities by tax-exempt organizations.
January 13, 2009
The Presidential Inauguration: Share Your Stories
Many people in the nonprofit world plan to travel to Washington next week to call attention to their causes as Barack Obama is inaugurated to the presidency.
To document what charity and foundation workers are doing, both in Washington and elsewhere, we have created an easy way for readers to share photographs and videos of events related to the inauguration.
To participate, join the The Chronicle of Philanthropy group on the photo-sharing site Flickr.com and upload your photos and videos.
We also welcome news about what your organization is doing as the new president takes office. To share your thoughts, e-mail us.
Obama Names Nonprofit Leader to Top Health and Human-Services Position
President-elect Barack Obama today nominated a nonprofit leader—William V. Corr, executive director of the Campaign for Tobacco-Free Kids—as Deputy Secretary of Health and Human Services.
Mr. Obama said in a statement that Mr. Corr would play a key role in improving the country’s health-care system and making it more affordable. “Bill Corr has the depth of experience and commitment to this issue necessary to take on this challenge,” he said.
Before joining the Campaign for Tobacco-Free Kids—a group in Washington that works to prevent smoking—in 2000, Mr. Corr worked for two years as chief counsel for Tom Daschle, then the Senate minority leader. Mr. Obama has nominated Mr. Daschle as Secretary of Health and Human Services.
Mr. Corr previously served as chief of staff and deputy assistant secretary for health at the Health and Human Services Department in the Clinton administration and held several Congressional staff positions.
From 1974 to 1977, he directed four nonprofit community health-care centers in the Appalachian Mountains area of Tennessee and Kentucky.
Mr. Corr is also a member of a group that has been reviewing the Health and Human Services Department for the Obama transition team.
January 12, 2009
Public Broadcasters Ask for Help from Economic-Stimulus Package
Public broadcasters have asked President-elect Obama to spend $550-million on several communications-infrastructure projects—and a cash infusion to help stations weather the recession—as part of the economic-stimulus package that he is preparing.
“We are already working in many areas related to the well-being of our communities—economic, educational, and civic,” says a letter signed by the heads of the Corporation for Public Broadcasting, National Public Radio, and the Public Broadcasting System. “With further investment, we can expand these efforts to generate additional jobs and create economic stimulus.”
Public television and radio stations could lose $300-million in revenue this year, according to preliminary estimates, the letter says. It asks for a one-time allocation of money to help them cope and protect as many as 1,000 jobs that are at risk.
It says the stimulus money could also be used to:
- Expand super-high-speed connections among public media organizations, public schools, universities, government agencies, and other groups, a proposed effort it dubs National Public Lightpath. It says that would help strengthen civic life.
- Create an American Archive of broadcast material of historical interest that is now “languishing” at public television and radio stations and in danger of disintegrating. The project would digitize and catalogue the material and build data bases and a retrieval system so people could gain access to the material.
- Train 15,000 teachers and child-care workers to use new-media educational tools with young children in neighborhoods with a lot of poor people.
- Help families in 75 metropolitan areas save their homes from foreclosure. Public broadcasters would work with community organizations to educate people about their options on the air and on the Web.
- Train thousands of people to produce multimedia materials as a way to bring new voices to public media; and expand content aimed at African American, Latino, and native American audiences.
See The Chronicle‘s article about other organizations that are suggesting ways the economic-stimulus package could help nonprofit groups.
White House Details President Bush's Social-Service Efforts
During the last eight years, President Bush has helped steered billions of public dollars to religious organizations and other charities to fight poverty and provide other services, according to a new White House report.
The report, Innovations in Compassion: A Final Report to the Armies of Compassion, outlines Mr. Bush’s controversial effort to allow more churches and other religious groups to compete for money from federal social-service programs. Civil-liberties groups have criticized the effort, saying it is tantamount to government support for religion.
The report also promotes Mr. Bush’s work to grow HIV/AIDS treatment overseas, curb malaria, and provide incentives for Americans to volunteer or donate to charity.
As part of the White House’s Faith-Based and Community Service Initiative, “federal partnerships with faith-based and other community organizations have greatly expanded,” Mr. Bush writes in the introduction to the report. “Most importantly, together we have brought life-changing aid to millions in need.”
Among Mr. Bush’s accomplishments, the report says, are providing addiction services to more than 250,000 drug addicts, offering antiretroviral treatment to 10.1 million people with HIV/AIDS in Africa and elsewhere, and helping to reduce the number of chronic homeless people by 30 percent from 2005 to 2007.
But Americans United for Separation of Church and State, a civil-liberties advocacy group in Washington, says the report “seeks to mask the shortcomings of a badly failed policy.”
“President Bush should have gotten the Golden Globe for playing a ‘compassionate conservative’ while doing precious little to actually help disadvantaged Americans,” says the Rev. Barry W. Lynn, the group’s executive director, in a statement.
With President-elect Obama taking office next week, the report offers several suggestions for how the next administration should continue efforts to aid religious charities. It advises expanding the number of social-service vouchers, doing more to teach small nonprofit groups management and other administrative skills, and increasing partnerships with corporations, foundations, and state and local governments.
Mr. Obama has said he will keep the White House Office of Faith-Based and Community Initiatives, though he plans to rename it and refocus its work.
In addition, he promised to reverse a contentious Bush administration rule that allows faith-based groups that receive federal grants to discriminate based on religion when hiring employees.
Read The Chronicle’s article about how Mr. Obama’s is expected to change the faith-based initiative. (A paid subscription or free temporary pass is required to view the article.)
January 08, 2009
Independent Sector Outlines Public-Policy Priorities
The new Congress and administration should bolster the social safety net, promote national service and charitable giving, ease lobbying restrictions on charities, and ensure that foreign-aid programs respect workers’ civil rights, according to policy proposals issued this week by Independent Sector.
The group, a coalition of big charities and foundations, urged policymakers to take action including:
- Provide adequate money for non-defense discretionary programs that reflects inflation, population growth, and increased needs. It should not come at the expense of mandatory programs like Social Security, Medicaid, or Temporary Assistance for Needy Families.
- Ensure that government contracts with nonprofit groups cover the full cost of services, including administrative overhead costs.
- Pass legislation to expand national-service programs, for example the Serve America Act that has been introduced in the Senate.
- Extend and expand legislation allowing older people to donate money from their individual retirement accounts to charity without paying taxes on it.
- End the “two-tier” excise tax on foundations’ net investment income. Under the present system, a foundation that substantially increases its distributions in a given year will also increase the five-year average used to determine its tax rate. It could then have to pay a 2-percent tax rate (instead of 1-percent) for five years. That penalizes foundations for increasing donations in times of need, the group says.
- Create a high-level office in the executive branch to coordinate education and oversight efforts of all federal agencies that provide help to nonprofit groups.
- Raise the $1-million annual limit on charity lobbying activities to at least $3-million; change the tax code to allow private foundations to support nonpartisan lobbying activities by charities.
- Ensure that federal agencies follow the Principles of International Charity that were drawn up by foundations and charities as an alternative to U.S. Treasury Department guidelines designed to prevent the diversion of charitable money to terrorism.
- Prevent the U.S Agency for International Development and other federal foreign-assistance agencies from requiring relief charities to screen employees in a way that would violate their civil rights under the Privacy Act.
- Give more money to the Internal Revenue Service for oversight and enforcement of tax laws affecting charitable organizations.
Congress Urged to Give IRS Authority on Volunteer Mileage
Congress should allow the Secretary of Treasury to adjust the tax deduction rate for volunteers who use their own vehicles for volunteer work, the national taxpayer advocate told Congress this week.
Nina E. Olson, the taxpayer advocate, said in her annual report to Congress that the Internal Revenue Service has the authority to amend the deduction rates for business-related travel to adjust for inflation.
The rate for volunteers, however, remains fixed in the tax code.
As a result, volunteers are eligible for a deduction of 14 cents per mile driven, while taxpayers can deduct 55 cents per mile for business-related travel.
Ms. Olson, who operates independently of other IRS offices and reports to Congress, also criticized the IRS’s tax-exempt division for relying too heavily on its Web site to communicate with charities and other tax-exempt organizations.
The IRS has, in the past, has relied more on speeches by its officials to tax-exempt groups in face-to-face settings.
“Electronic taxpayer service should not supplant face-to-face outreach unless EO has data that supports organizations preference for these services,” Ms. Olson wrote in her report to Congress.
The 2008 report did not mention a key recommendation from Ms. Olson’s 2007 report, which stated that the IRS needs to take more aggressive steps to help smaller charities understand the increasingly complex tax code.
Obama Should Meet With Foundation Leaders, Says Philanthropy Consultant
Within a few months of his inauguration, President-elect Obama should organize a meeting of the nation’s 100 leading foundations “and explicitly ask them to help him implement his agenda,” writes Trevor Neilson, a philanthropy consultant who has worked with Bill Gates, Angelina Jolie, and others.
In an article on The Huffington Post, he also suggests the incoming president call on wealthy people to be philanthropic while they are young; create new tax benefits for individual giving and for companies that pursue a social mission; and celebrate charitable works with awards similar to the Kennedy Center Honors, which recognize trailblazers in the performing arts.
Read The Chronicle’s collection of nonprofit proposals for the Obama administration. (A paid subscription or free temporary pass is required to view The Chronicle article.)
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January 02, 2009
U.S. Aid Agency Issues Final Rule for Controversial Security Program
Despite loud protests by international aid groups, the U.S. Agency for International Development has made final the rules for a security program to screen charities and their employees for possible ties to terrorists.
While the move is the last step in the regulatory process, the agency postponed the decision to start the controversial program, known as the Partner Vetting System, or PVS, saying President-elect Barack Obama and his administration would ultimately decide its fate.
“The decision as to whether to implement PVS will be made by the incoming Obama
administration,” the agency writes in today’s Federal Register.
Under the system, nonprofit groups that apply for agency grants and contracts must provide the names of “key individuals” overseeing their projects, including board members, executives, and other employees. The federal government would then check the names against a classified intelligence database that contains information on terrorists.
Agency officials say that the system is needed to make sure U.S. foreign aid distributed in politically unstable regions and war zones is not diverted — intentionally or unintentionally — to terrorists or violent militant groups.
But charity leaders argue it violates the civil rights of their employees and could place aid workers in danger overseas because they would appear to be working as an arm of American security agencies or the military. The nonprofit groups say that there is no substantial evidence that aid money has gone to support terrorists.
In today’s Federal Register, the agency dismissed such concerns. “USAID does not believe that it should wait for hard proof that our funds are actually flowing to terrorists before implementing additional safeguards to its anti-terrorist financing program — even the suggestion that our funds or resources are benefiting terrorists is harmful to U.S. foreign policy and U.S. national
interests,” it writes.
The regulation published in the Register exempts portions of the screening program from privacy laws that govern record-keeping by federal agencies. For example, while the government is required to provide Americans copies of most of the documents it maintains about them, the Vetting System would be exempt from the requirement.
Read The Chronicle’s article about how nonprofit aid organizations are asking Mr. Obama and his aides to change the Partner Vetting System and other Bush administration rules related to foreign assistance.