March 2009
March 31, 2009
International Charities Press Congress to Restore Money for Overseas Aid
Nonprofit groups that work overseas are urging Congress against cutting support for foreign aid from President Obama’s proposed budget.
Charities are asking supporters to press members of Congress to reject moves by the Senate and House Budget Committees that would trim $4-billion and $5.3-billion, respectively, from the amount Mr. Obama had requested.
Mr. Obama sought $53.8-billion for foreign assistance in his budget proposal for 2010. Senators John Kerry, a Democrat, and Richard Lugar, a Republican, have introduced an amendment that would restore the money to the level requested by Mr. Obama.
Nonprofit leaders say the decrease would hinder efforts to help poor people abroad. “Anything less than the request level of $53.8-billion will greatly hamper President Obama’s efforts to implement programs essential for millions of children and families around the world,” said Save the Children in an online message to supporters.
House Approves Amended Version of National-Service Bill
The House of Representatives today adopted the Senate version of a bill to expand the country’s national-service programs, the final legislative action needed before the legislation goes to President Obama.
On a vote of 275-149, the House approved the Edward M. Kennedy Serve America Act, H.R. 1388, which amended a bill the House had passed earlier.
President Obama, who has championed the legislation, is expected to sign it sometime after he returns from his overseas trip next week.
Rep. George Miller, Democrat of California, one of the bill’s chief sponsors, said the new volunteers who are authorized by the bill would help Americans weather the economic crisis.
“Our public needs are growing while our resources for meeting them are disappearing,” he said before the vote. “This bill will help meet some of those urgent needs.”
For more information about the Serve America Act’s content, see The Chronicle’s coverage of the Senate vote on the main bill and on amendments on nonprofit advocacy, management help for small charities, and the charitable deduction.
March 27, 2009
Senator's Bill Would Make Estate Tax Permanent at Current Levels
Sen. Max Baucus, the Montana Democrat who chairs the Senate Finance Committee, has introduced legislation that would make the estate tax permanent and at levels that are already in effect this year.
In 2001, Congress passed the current law that gradually phases out the estate tax through 2009 and repeals it for 2010. In 2011, however, the current law is set to expire and estate-tax levels that applied years earlier go back into effect unless Congress takes action.
The bill proposed by Mr. Baucus — the Tax Certainty and Relief Act of 2009, or S 722 — would permanently keep the estate tax at 2009 levels (and do away with the 2010 repeal). Heirs could exempt $3.5-million from taxes ($7-million for couples), with amounts above that taxed at 45 percent. The exemption threshold would be adjusted for inflation in the future.
“This bill would offer certainty on the estate tax,” Senator Baucus said.
Many nonprofit organizations say the estate tax plays an important role in encouraging people to make charitable bequests.
Steve Gunderson, president of the Council on Foundations, a Washington association that represents about 2,000 grant makers, said his organization endorsed Mr. Baucus’s bill.
“The Council on Foundations, and the many grant-making organizations we represent, welcome the greater certainty that Chairman Baucus’s proposal would provide, which will help philanthropies plan more effectively to serve their communities in a time of increasing needs,” Mr. Gunderson said.
Independent Sector Says Obama Deduction Plan Presents "Solomon's Choice"
Independent Sector, a coalition of charities and foundations, has issued a statement saying that President Obama’s proposal to limit some charitable deductions to help finance a plan to reshape the country’s health-care system presents a “Solomon’s choice” for the charitable world.
In wording that reflects an internal debate over how to respond to the president’s plan, the group says that the proposed limits on income-tax breaks for wealthy people would reduce charitable gifts “that are needed more than ever in these difficult economic times.”
At the same time, it says, charities are suffering from the rising cost of providing health insurance to their employees and, if they work in the human-services field, of offering care to people who do not have health coverage.
President Obama has proposed limiting tax breaks for itemized deductions, including donations to charity, to 28 percent for married couples earning more than $250,000 (individuals $200,000), starting in 2011. The tax revenue raised would be used to help finance a plan to cut health-care costs and extend care to people who are now uninsured.
Diana Aviv, Independent Sector’s president, has said her group’s members are divided over whether to fight the president’s plan because it would dampen giving or support it as a way to improve health care.
The statement, in essence, presents a brief for both arguments. “While there are many reasons Americans choose to make charitable contributions, research has shown that changes in tax benefits do have an impact on when and how much an individual or family contributes to charitable organizations,” it says.
Internal Revenue Service statistics show that in 2006, 49 million Americans who itemized their tax deductions accounted for $196.8-billion in charitable contributions — 88 percent of the total giving by living individuals that year, it adds.
“In the end, the proposed policy change, combined with the current economic crisis, would diminish the flow of dollars to many charitable organizations, leaving many of our most vulnerable populations on the losing end.”
On the other side, it says that in 2005 (the latest year for which data is available) nonprofit groups paid more than $48-billion for employee health-care coverage and related benefits, excluding pension contributions or payroll taxes — or more than 4.6 percent of their total expenditures.
“Since then, the cost of health-care coverage has skyrocketed and nonprofits now face difficult decisions about whether to cut benefits for employees and risk losing qualified staff, or cut staff positions, both of which would diminish the programs they provide to communities,” it says.
The statement concludes by asking lawmakers to both “move forward on the health-care challenges facing our nation” and “preserve these and other strong incentives to encourage Americans to give back to their communities,” especially those of “substantial means.”
“We are living in extraordinary times, and we believe it is important to work closely with the administration and the Congress to find workable solutions to the Solomon’s choices that lie ahead,” it says.
Council Tells Lawmakers 28% of Donor-Advised-Fund Grants Went to Social Services
More than a quarter of the grant money awarded last year by donor-advised funds held at community foundations supported basic social services, such as hunger-relief and health-care programs, according to a new survey.
And the survey, conducted by the Council on Foundations in time for its annual lobbying event this week, Foundations on the Hill, found that despite the drop in the value of assets at many community foundations, more than half the grant makers expect giving from donor-advised funds in 2009 to stay the same or grow from last year.
“Our message from this survey and to the hill is that donor-advised funds are doing their part to address critical human needs in these tough economic times, and that people count on them,” says Sigurd Nilsen, director of policy research and analysis at the Council on Foundations, in Arlington, Va.
The findings are based on responses from 264 community foundations with assets totaling $29.1-billion. Together, the foundations made more than $3-billion in grants last year, of which 56 percent, or $1.7-billion came from donor-advised funds. Twenty-eight percent of that money, the survey found, was directed to social services, such as assistance programs to help prevent home foreclosures.
Donor-advised funds allow people to donate cash, stock, and other assets to special accounts, claim a charitable deduction on their federal income taxes, and then recommend how, when, and to which charities the money in the account should be distributed.
The Council on Foundations supports legislation introduced in Congress earlier this month (H.R. 1250) that would, among other provisions, allow taxpayers to make distributions from their individual retirement accounts to donor-advised funds.
Currently, people age 70 and a half and older are allowed to donate up to $100,000 annually from their IRAs, but cannot put the money into donor-advised funds or other types of gifts, such as charitable annuities and trusts.
— Debra E. Blum
March 26, 2009
Foundation Center Shows Grants by Congressional District
The Foundation Center, in New York, has developed new tools to help identify how foundation and corporate support is distributed throughout U.S. Congressional districts, the organization announced this week.
The tools are available for anyone who is a subscriber to the center’s Foundation Directory Online, and gives users the chance to search for nonprofit groups, corporations, and grants by congressional district.
Congress May Cut Some Foreign-Aid Money From Proposed Budget
International charities may not receive as much money from President Obama’s budget as they have hoped.
In an interview with National Public Radio this morning, Kent Conrad, the Democratic senator who chairs the Senate Budget Committee, said he intends to cut $4-billion in foreign assistance from Mr. Obama’s proposed budget. The president’s proposal would have increased foreign aid to more than $50-billion by 2012.
An article today in The Christian Science Monitor said the Obama administration is signaling that its pledge to increase foreign aid to $50-billion may not be met by the end of the president’s first term. “With a significantly worse economic and budgetary picture, the White House Office of Management and Budget speaks of ‘extending out’ the goal of doubling foreign aid — presumably into what administration officials envision as a second term for the president,” the newspaper reports.
Senate Narrowly Rejects Language Opposing Obama Deduction Plan
The Senate today narrowly rejected a move to criticize President Obama’s proposal to limit tax breaks wealthy people can get for charitable gifts, instead adopting language saying only that Congress should preserve the charitable deduction on income taxes.
Sen. John Thune, Republican of South Dakota, had proposed that the lawmakers express support for the current deduction system, arguing that the president’s plan would harm charities by lowering an incentive for giving.
But the senators rejected his proposed resolution by a 48-49 vote after Sen. Max Baucus, chairman of the Senate Finance Committee, offered an alternative text.
Senator Thune’s proposal, an amendment to a national-service bill, asked lawmakers to approve a “sense of the Senate” that Congress should preserve the “full” federal income-tax deduction “and look for additional ways to encourage charitable giving.”
Senator Baucus, Democrat of Montana, argued that language was too broad. “It would put the Senate on record as favoring preservation of incentives for charitable giving over all other priorities,” he said. For example, it could prevent the Internal Revenue Service from cracking down on a charity scam or impede efforts to repeal the estate tax, which encourages charitable giving by allowing people to decrease the tax liability on inherited wealth, he said.
“What if we reach a bipartisan budget agreement to limit the deficit and help to balance the budget,” he added. “Might we want to consider, I say just consider, limiting the ability of upper-income taxpayers to take their full deductions?”
Senator Baucus proposed that the Senate remove the word “full” and just express support for preserving the charitable deduction.
That amendment passed by 56 to 41. All those voting against were Republicans.
President Obama has proposed curbing tax breaks on itemized deductions, including donations to charity, for the wealthiest Americans as a way to raise money to revamp the health-care system, starting in 2011.
“The Senate missed an opportunity to affirm our commitment to charitable giving,” Senator Thune said in a press release after the vote. “Government programs alone cannot replace the services that nonprofits and private charities provide to those in need, especially during these difficult economic times.”
Foundation Leaders Visit Lawmakers on Capitol Hill
More than 260 foundation leaders came to Washington this week to meet with members of Congress — and their timing could not have been better.
Nonprofit issues were a hot topic all week. Lawmakers debated whether to expand national-service programs; President Obama on national television defended his controversial plan to reduce tax breaks for charitable deductions for wealthy people; and several senators introduced legislation that would change the way grant makers pay taxes on their net investment income.
As one foundation official put it, the stars were aligned.
Indeed, for members of Philanthropy Northwest, a regional association of grant makers based in Seattle, the annual “Foundations on the Hill” event was an exhausting, but productive, day.
In previous years, members of Congress had asked mostly about abuses in the nonprofit world, wondering whether foundations were elaborate tax dodges, said Carol Lewis, chief executive of Philanthropy Northwest. Now the government officials have a better understanding of the positive role foundations play in society, she said.
An aide for Rep. Jim McDermott, a Democrat from Washington, said that Americans don’t fully understand the amount of good that philanthropic dollars do in their neighborhoods and cities, she said.
“I was like, cha-ching. He gets it,” Ms. Lewis said
Christopher (Kit) J. Gillem, program director at the M.J. Murdock Charitable Trust, a foundation based in Vancouver, Wash. and a member of the association, agreed that the tone of the conversations had changed.
“They are asking, How can we help you?” he said about lawmakers.
For the foundation officials, their day started with morning meetings with members of the House of Representatives, then after a quick lunch, it was time to woo the Senate. They hustled from meeting to meeting in the sometimes maze-like Hart and Dirksen Senate office buildings, discussing who would lead conversations and what themes to hit.
In several afternoon meetings with senators from northwestern states or their aides, the discussions focused on finding ways for government to partner with philanthropy during the recession. Policy makers seemed pleased that Murdock and other grant makers have helped charities seek out money made available by the recent economic-stimulus package.
During the meetings, Philanthropy Northwest members kept their pitches short and sweet, often telling success stories about grantees.
“We don’t do the heavy lifting; the nonprofits do. We’re the fuel,” Mr. Gillem told the deputy chief of staff of Sen. Mark Begich, a Democrat from Alaska.
While Mr. Gillem and his colleagues stressed they take a soft-sell approach with lawmakers, they did ask for support on some philanthropic issues.
For example, they asked members of Congress to join the new Philanthropy Caucus. Several lawmakers and their aides were unaware of the caucus, but expressed interest in it. “We need Western representation” in the caucus, Mr. Gillem said in more than one meeting.
The high point of the day was sitting down with Sen. Max Baucus, a Democrat from Montana, who as head of the Senate Finance Committee, oversees tax-exempt organizations.
While the meeting was quick — about 10 minutes or so — the Philanthropy Northwest group said any face time with such a prominent senator is important and demonstrated Mr. Baucus’s commitment to philanthropy.
As if on cue, only a few hours after the meeting, the Senate approved a proposal co-sponsored by Mr. Baucus to provide $25-million to improve accounting and management skills at small and medium-sized charities. (The measure is part of the Serve America Act.)
It seems lucky stars really did shine down on foundations that day.
Senate Approves Plan to Offer Management Help to Small Charities
The Senate has approved a plan to create a new program to provide $25-million over five years to help small- and medium-size charities get training and management help.
The legislation was proposed by Sens. Max Baucus, Democrat of Montana, and Charles E. Grassley, Republican of Iowa — the two top members of the Senate Finance Committee. It comes in the form of an amendment to the Serve America Act, a bill to expand the country’s national-service programs. The Senate adopted the bill late yesterday by “unanimous consent” (a procedure allowing a measure to go forward if no one objects).
The amendment creates a “Nonprofit Capacity Building Program” within the Corporation for National and Community Service.
The National Council of Nonprofits, which represents state nonprofit associations and has been pushing for such legislation for several years, said in a press release that the measure was “especially crucial now during the nation’s economic crisis, when nonprofits must be strong safety nets for so many individuals and families in need.”
Doug Sauer, who chairs the group’s board, said nonprofit organizations across the country had influenced the outcome by creating a “collective national voice.” More information about the legislation is available on the Council’s Web site.
March 25, 2009
Senator Wants National-Service Bill to Criticize Obama Deduction Plan
Sen. John Thune, Republican of South Dakota, proposed today that the Senate amend a national-service bill to express its opposition to President Obama’s proposal to curb charitable deductions for the wealthiest taxpayers.
Mr. Thune, in a debate over the Serve America Act, introduced an amendment expressing a “sense of the Senate” that Congress should preserve the full income-tax deduction for charitable contributions “and look for additional ways to encourage charitable giving, rather than to discourage it.”
However, Sen. Barbara Mikulski, Democrat of Maryland — who is managing the bill on behalf of Sen. Edward Kennedy, Democrat of Massachusetts, who is ill — said the matter was not appropriate for the national-service legislation and should be taken up instead by the Senate’s budget or finance committees.
She asked Senator Thune to withdraw the amendment.
President Obama has proposed limiting tax breaks for itemized deductions, including donations to charity, to 28 percent starting in 2011 as a way to raise money for a plan to revamp the health-care system. Taxpayers in the top tax brackets can now get 33 percent or 35 percent for every dollar donated.
One day after President Obama defended the proposal at a televised news conference, Senator Thune said it would dampen giving at a time when charities are suffering from the economic downturn. “These organizations that educate our children, care for the sick and poor, and facilitate religious opportunities should not have to pay the price for additional spending on new federal programs,” he said.
Senator Mikulski, who is trying to get the Serve America Act adopted before Congress breaks for spring recess at the end of next week, said adopting the amendment would create “one more quagmire” in negotiations over the legislation with the House of Representatives.
She also said she supported President Obama’s budget and noted that the charitable-deduction proposal would affect a small percentage of households, especially since the majority of people who give to charity do not itemize their deductions.
“We believe these taxpayers, fortunate enough to be doing well and who also want to do good, will continue to give even if it’s a 28 percent rate,” she said.
Senator Mikulski told her colleagues she hopes they will be able to finish debate and vote on the Serve America Act on Thursday.
Join the Debate Over President Obama's Charitable-Deduction Proposal
Followers of The Chronicle’s Twitter feed are weighing in on President Obama’s comments last night defending his proposal to limit tax breaks for charitable deductions as a way to raise money for a plan to revamp the health-care system.
President Obama told a televised news conference that the proposal, which would apply to married couples making more than $250,000 ($200,000 for individuals) starting in 2011, would not have much effect on giving and would bring more fairness to the tax code.
Some of the responses:
“I think Obama’s right. Donors give because it feels good, not because of taxes. Tax breaks don’t hurt, but it’s not the be-all.”
“In this economy any excuse not to give is bad! He may be right about fairness but it will hurt!”
“‘The most important thing I can do for charitable giving is to fix the economy.’ Amen.”
“Won’t make big difference to strategic givers with their fav orgs. More likely to decrease scattered year-end surprise giving.”
What do you think? Share your thoughts on Twitter (@philanthropy) or by clicking on the comment link below.
March 24, 2009
Lawmaker Seeks to Support Nonprofit Groups, Aide Says
Rep. John Lewis, an influential Democratic lawmaker, is interested in supporting the work of charities and foundations during the economic downturn, an aide to the congressman said today.
Michaeleen Crowell, legislative director for Mr. Lewis, said the congressman from Georgia formed strong opinions of the nonprofit world after working with grass-roots groups as part of the civil-rights movement.
“Because of these experiences in many ways, he’s one of your biggest allies,” she said. “But his experiences also make him a sober judge to hold high expectations for the charitable community.”
Ms. Crowell spoke at a meeting of the Council on Foundations, an association of grant makers in Arlington, Va. Members of the council are in Washington this week to meet with federal lawmakers.
Ms. Crowell encouraged nonprofit leaders to tell members of Congress about the social problems in their regions and how they could partner with government.
“You represent a powerful force in our economy, and we need to figure out ways to nurture the relations between you and the federal government to meet the most pressing needs of the people in our country,” she said.
Mr. Lewis encourages foundations to stir up “good trouble, necessary trouble” to help the less fortunate, she said.
As chairman of the Oversight Subcommittee of the Ways and Means Committee, which oversees tax issues and tax-exempt groups, she said Mr. Lewis has been primarily focused on the financial crisis, but he is interested in nonprofit issues.
“You can be sure that even if we’re not having hearings that impact you directly on the issues of foundations, we are listening,” she said.
Senators Propose Legislation to Help Small Charities Get Management Help
The Senate Finance Committee’s top two members — Democrat Max Baucus and Republican Charles E. Grassley — teamed up today to introduce legislation that would provide money to help small and medium-sized charities get training and management assistance.
The legislation, introduced as an amendment to a national-service bill now being debated by the Senate, would provide $25-million over five years to a “Nonprofit Capacity Building Program” within the Corporation for National and Community Service.
The amendment would “strengthen small charities around our country, especially where resources are scarce,” Senator Baucus of Montana, who chairs the finance committee, told his colleagues on the Senate floor. He said it would allow groups to get training, for example, in how to manage their finances, raise money, fill out tax forms, work with new technology, or plan long-term budgets.
He said it is especially hard for charities in rural areas to get such training.
Senator Grassley of Iowa, the committee’s senior Republican, co-sponsored the legislation, which has been promoted by nonprofit associations including Independent Sector and the National Council of Nonprofits.
The program would provide the grants to “intermediary” nonprofit groups that have experience offering training to charities. They would be required to raise or provide matching funds from non-federal sources.
The legislation was offered as an amendment to the Serve America Act, S. 277, a bill to expand the country’s national-service programs. Sen. Barbara Mikulski, Democrat of Maryland, who is helping to shepherd the Serve America Act through the Senate, praised the amendment and said she would discuss it with two other key sponsors of the national-service bill — Republicans Orrin Hatch of Utah and Mike Enzi of Wyoming.
Speculation about Obama's Social-Innovation Efforts
While the White House has been quiet about the Office of Social Innovation that it plans to create, Diana Aviv, chief executive of Independent Sector, shed some light on the new government effort.
Ms. Aviv said she expected the Obama administration to officially announce the new office in a few weeks and that Sonal Shah, who used to lead global-development giving at Google.org, will lead it. Ms. Shah was a member of a group that advised the incoming Obama administration on “innovation and civil society” during the transition.
The White House press office declined to comment about personnel appointments to the office.
Ms. Aviv made her remarks to members of the Council on Foundations, who are in town this week to discuss policy issues with members of Congress. The council represents about 2,000 grant makers, and Independent Sector represents about 600 charities and foundations.
The goal of the White House office will be to promote innovative approaches to solving social problems. (Read The Chronicle’s article about the proposals for the social-innovation office.)
Ms. Aviv said the office is considering providing money to new projects and to help nonprofit groups who have demonstrated their success expand their work. She also said the office is considering operating a Web site to promote innovative charities to the American public and donors.
Steve Gunderson, chief executive of the council, said he praised the administration’s pledge to work more closely with the nonprofit world. But he cautioned that with the growing government deficit, the president and Congress will be forced to make tough choices in future years and possibly decrease the money for new programs.
“I want to both encourage us to pursue [partnership] and to encourage us to pursue this with a note of caution,” he said.
Revised IRS Publication Explains Tax Rules on Charity Business Activities
In a revised guide for taxpayers, the Internal Revenue Service explains the rules that tax-exempt organizations must follow when they raise money through business activities.
Charities and other nonprofit groups must pay unrelated-business income tax, known as UBIT, on retail sales, magazine publishing, and other commercial operations that are not directly related to their missions.
The tax agency’s updated Publication 598 explains which organizations are subject to the tax; what an unrelated trade or business is; and how groups should calculate their unrelated-business taxable income.
March 23, 2009
Lobbying Ban in National-Service Bill Comes Under Fire
In approving a bill last week to expand national-service programs, the House of Representatives adopted a last-minute amendment that would bar participants in the programs from attempting to influence legislation or taking part in various other political activities, including protests or voter-registration drives.
Two nonprofit organizations are now sending e-mail messages urging supporters to fight to keep the language out of the Senate version of the bill.
“The First Amendment protects against speech restrictions such as those in [this] amendment,” says OMB Watch, a government-watchdog group.
The Center for Lobbying in the Public Interest, a group that promotes nonprofit advocacy, calls the language “anti-nonprofit” and “anti-democratic,” adding that “civic participation is the touchstone of American democracy.”
The amendment was proposed by Rep. Virginia Foxx, Republican of North Carolina, to the Generations Invigorating Volunteerism and Education (GIVE) Act, H.R. 1388, at the end of the debate on the bill. Ms. Foxx opposed the GIVE Act and voted against it after her amendment was approved.
“Funds must be used for the purpose of service and encouraging others to serve within their communities,” she said on the floor. “They must not be allowed to be used for prohibited activities.” She said she did not want money going to ACORN, the Association of Community Organizations for Reform Now, which is often criticized by Republicans for its voter-registration activities.
The amendment would prohibit spending for organizations that provide abortion services, have been indicted for voter fraud, or are “engaged in political or legislative advocacy” — or, in a provision especially criticized by the two nonprofit groups, if they are “co-located on the same premises” as such organizations.
The groups say the language would ban individuals from lobbying even if they were using private money or engaging in activities outside the context of a national-service program.
The Senate is debating its version of the national-service bill, the Serve America Act, S. 277, this week.
March 20, 2009
GOP Leader Opposes Charitable-Deduction Cap
Sen. Mitch McConnell of Kentucky, the Senate Republican leader, has criticized the Obama administration’s proposal to limit federal tax breaks that wealthy people can get for their itemized deductions for donations to charity.
To help pay for a plan to reshape the country’s health-care system, President Obama wants to limit the federal tax breaks that wealthy people can get for their itemized deductions, including donations to charity, starting in 2011.
“With a challenged economy already causing endowments at colleges and universities, charities, museums, and other nonprofits to shrivel up, the last thing America’s nonprofit organizations expected was for the administration to introduce another disincentive to charitable giving,” Senator McConnell said on the Senate floor yesterday.
Mr. McConnell noted that a recent report showed that college and university endowments lost more than 20 percent of their value in a recent five-month period largely as a result of the decline in the stock market.
“The administration’s proposal is a bad one at any time,” Mr. McConnell said. “But now is the worst time of all.”
Senator McConnell said that Americans “don’t understand why charitable organizations and the people they serve should suffer in order to pay for new or expanded government programs.”
He said the proposal could lead to “less money for places like Western Kentucky University, the Juvenile Diabetes Foundation, hospitals, churches, food pantries, and countless other causes that are worthy of our support.”
Mr. McConnell added: “These organizations are hurting enough. The administration doesn’t need to hit them up for more tax revenue while they’re down — and it doesn’t need to blunt one of the things that Americans are most proud of, and that’s their generosity.”
He concluded that “Congress should preserve the full deduction for charitable donations and look for additional ways to encourage charitable giving, not discourage it.”
First Lady Witnesses National Service in Action on the Mall
The spirit of national service was contagious this week in Washington. Not only did Congress adopt key legislation to expand federal volunteer programs, but more than 100 participants in the YouthBuild program gathered on the National Mall to build the frame for an energy-efficient house — with the encouragement of Michelle Obama.
The house will go to a woman in Brownsville, Tex., whose mobile home was damaged last year by Hurricane Dolly.
YouthBuild, a federal program that provides money to nonprofit groups to teach low-income young people construction skills and enlist them to build housing for poor people, is marking its 30th anniversary this year. Most of the students who helped build the house on the Mall participate in YouthBuild programs allied with AmeriCorps, the national-service program.
“The message of YouthBuild is so important,” said the first lady, who dropped by for a tour. “Participating in national and community service is not just an escape for the wealthy or for those students who can afford it.”
YouthBuild began in 1978 as a project to renovate housing in New York. Dorothy Stoneman, who started that project, founded YouthBuild USA, a nonprofit group, in 1990, to help expand the program nationwide.
It became a federal program in 1993 and is today active in more than 220 localities. Ms. Stoneman, who was present for the Mall activities earlier this week, remains president of YouthBuild USA, in Somerville, Mass., which offers training, money, and other support to the program.
The recent economic-stimulus package adopted by Congress provided $50-million for YouthBuild.
— Suzanne Perry
(Photo by Dayna Smith for YouthBuild)
March 17, 2009
Rise in Federal Spending on Social Programs Not Enough, Critics Say
The 2009 “omnibus” budget bill that President Obama signed last week will boost spending on a range of social programs, increasing funds for the Health and Human Services Department by 4 percent, according to an analysis by Independent Sector, a coalition of charities and foundations.
Among the winners: the Commodity Supplemental Food Program, Community Services Block Grants, community-service jobs for older people, Head Start, and Job Corps. The analysis shows a few losers too: budgets were cut for abstinence education and for grants to religious and other local organizations under the Compassion Capital Fund.
The $410-billion package, H.R. 1105, authorizes spending for most federal agencies for the rest of fiscal year 2009.
Despite some one-year increases, the Coalition on Human Needs, an alliance of antipoverty groups, says spending on social-service programs has not kept pace with the needs, especially given that the number of people in poverty has been mounting. In an analysis of federal spending on 99 health, housing, nutrition, and other “human needs” programs, it found only 22 had received increases above inflation from 2005 to 2009.
“As the recession worsens and the number of people in poverty grows more rapidly, it is imperative that funding for human-needs programs does not fall further behind,” it said in a statement. (The analysis does not include money from the economic-stimulus package, which will channel additional money to some of the programs.)
March 12, 2009
Treasury Secretary Says Economy Most Important to Charitable Giving
Treasury Secretary Timothy Geithner, asked today if the administration’s proposal to cap the value of charitable deductions would hurt charities, said it would depend on the state of the economy.
“It depends on what else is happening,” he told the Senate Budget Committee in response to a question by Sen. Lindsey Graham, Republican of South Carolina. “The most important thing you can do to affect charitable giving is to get this economy back on track.”
Senator Graham responded: “I think the most important thing you can do is reward it when it’s done.”
That brief exchange took place during a hearing by the Senate Budget Committee on President Obama’s 10-year budget strategy.
The president has proposed limiting tax breaks for itemized deductions for families making more than $250,000 in 2011 as a way to raise money to help reshape the country’s health-care system. In questioning Mr. Geithner, Senator Graham referred to a study by the Tax Policy Center showing the proposal, in conjunction with a plan to raise the top income-tax brackets, could depress annual giving by $9-billion in 2011.
The administration has argued that the limits would affect a very small percentage of households and would not take effect until the economy is expected to be in recovery.
But the plan is running into some resistance in Congress, especially among Republicans.
“I question the wisdom of providing any disincentive for giving during this economic crisis,” Sen. Charles E. Grassley of Iowa, the senior Republican on the Senate Finance Committee, told a legal seminar this week. “Or for that matter, I’m not an advocate for changing the tax deductibility that we have and putting limits on it. I think it serves a very good purpose.”
Sen. Max Baucus, chairman of the finance committee, has also said he wants to explore alternatives to the cap on itemized deductions, mainly because he believes the administration should try to raise money from within the health-care system itself. The Montana Democrat has proposed capping the dollar amount of employer-paid health-care benefits that employees can exclude from income taxes.
March 11, 2009
Foundation Group Opposes Charitable-Deduction Cap and Supports Estate Tax
The Council on Foundations has decided to oppose President Obama’s proposal to limit the tax break wealthy Americans get for charitable deductions, fearing that it would dampen giving, Steve Gunderson, the group’s president, said today.
The council, which represents more than 2,000 grant makers, also for the first time has decided to weigh in on the estate tax, formally backing President Obama’s plan to keep it at current levels, Mr. Gunderson said in an interview.
The council’s board, which met last week, adopted both positions as part of a comprehensive review of tax policies affecting philanthropy, he said.
President Obama has proposed capping the tax break (at 28 percent) that families who make more than $250,000 can get for itemized deductions. The move would raise money for a fund to help pay for efforts to reshape the country’s health system. Many people in upper tax brackets can now get charitable tax breaks of 33 percent or 35 percent.
Unlike mortgage interest and state and local taxes, which also qualify for itemized deductions, giving to charity is discretionary, Mr. Gunderson said. “If our goal is to both recognize the appropriate role and responsibilities of government and create an environment for philanthropy to grow in size and service, you have to oppose a cap,” he said.
President Obama has also proposed keeping the estate tax, which is now being phased out and is scheduled to disappear in 2010. He would maintain the current rates, which exempt amounts of up to $3.5-million ($7-million for couples) and impose a 45-percent tax on the value above that.
Without further action, the estate tax would return in 2011 to the levels that existed before the phaseout was adopted in 2001. Critics of the tax want to repeal it permanently or to raise the exemption further.
Studies have shown that the estate tax prompts wealthy people to give more money to charity, both while living and in bequests, since they can shield some assets from taxation.
While the issue has in the past been considered “too hot to handle,” Mr. Gunderson said, the council now agrees it should take a stand because of the tax’s impact on charitable donations.
Mr. Gunderson said previous debates occurred before he took the helm in 2005, but that he believes the issue has been sensitive partly because many people who run foundations come from wealthy families that would be affected by the estate tax.
“I said you can’t have probably the most significant issue affecting the growth of philanthropy and not take a position on it,” he said.
Mr. Gunderson said the two new positions will be integrated into the council’s overall tax-policy strategy, which also calls for changes in areas like excise taxes on foundations, donations from individual retirement accounts to donor-advised funds, and foundation support of “low profit limited liability companies.”
House Committee Approves National-Service Bill
The House Education and Labor Committee today approved a bill to expand the country’s national-service programs — the Generations Invigorating Volunteerism and Education (GIVE) Act — by a vote of 34 to 3.
The legislation, H.R. 1388, is expected to go to the full House for a vote next week.
A summary of the bill is available on the committee’s Web site.
It excludes one provision that was in the original text — a Volunteer Generation Fund, which would provide grants to help nonprofit groups recruit and manage volunteers. But a House aide said that measure would be added as an amendment from the House floor.
The Senate is debating a similar bill, the Serve America Act, which is expected to be voted on next week by the Senate Health, Education, Labor, and Pensions Committee.
White House Chooses Nonprofit Founder to Lead 'Green Jobs' Effort
The nonprofit leader Van Jones has been tapped by the White House to serve as an adviser on green jobs, the Obama administration announced this week.
Mr. Jones, founder of the nonprofit group Green for All and co-founder of the Ella Baker Center for Human Rights, was an early leader in the push for creating jobs that could promote environmental sustainability.
He will serve as special adviser for green jobs, enterprise, and innovation within the White House Council on Environmental Quality.
“Van Jones has been a strong voice for green jobs and we look forward to having him work with departments and agencies to advance the president’s agenda of creating 21st century jobs that improve energy efficiency and utilize renewable resources,” said Nancy Sutley, chair of the White House council. “Jones will also help to shape and advance the administration’s energy and climate initiatives with a specific interest in improvements and opportunities for vulnerable communities.”
In addition to founding two charitable organizations, Mr. Jones is also the author of The Green Collar Economy.
(Click here to read a 1999 Chronicle article about Mr. Jones’s emergence as a leader for improving communities).
March 10, 2009
National-Service Agency Must Have Resources to Manage Growth, Senator Says
Witnesses at a Senate hearing today said legislation before Congress to expand national-service programs is critical because applications from potential volunteers are soaring at a time when they are needed to help Americans weather the economic downturn.
But the senator who chaired the meeting, Barbara Mikulski, Democrat of Maryland, urged supporters to ensure that enough money is allocated for managerial functions so the Corporation for National and Service, the federal national-service agency, can handle the growth effectively.
“To pass an authorization that does not have the resources behind it makes us feel good,” she said. “We want to do good.” Congress should ensure such money is provided when approving a 2010 budget for the agency, Ms. Mikulski said, adding that there is otherwise a danger of offering “hollow opportunities.”
The Senate Health, Education, Labor, and Pensions Committee held the hearing on the Serve America Act (S. 277), a bill to triple the number of participants in year-long national-service programs to 250,000 by 2014.
The bill would create a ServeAmerica Corps (in place of the current AmeriCorps) that would be made up of specific “corps” working on issues like clean energy, poverty, education, and health care. It would also create new service programs for young people and older people and create funds to help nonprofit groups expand innovative programs and recruit and manage volunteers.
The bill, introduced by Sens. Edward Kennedy, Democrat of Massachusetts, and Orrin Hatch, Republican of Utah, has broad bipartisan support, and many senators spoke warmly at the hearing about the benefits of national service both for the volunteers and the people they help.
But Ms. Mikulski said the legislation will face some “naysayers” as it moves through Congress.
She recalled that the Corporation for National and Community Service faced a “bureaucratic boondoggle” in 2003, when it did not have the money to handle all of the volunteers it had enrolled. She asked if the agency has the administrative systems to handle the increasing number of applications it is receiving, as well as manage the money it received from the economic-stimulus package just approved by Congress ($201-million, mostly to expand AmeriCorps).
Alan Solomont, chairman of the corporation’s board, said the agency will pursue growth “responsibly and gradually.” He said while some people were hoping for more money from the stimulus package, “we were all restrained by the sense that it didn’t make any sense to get more without the capacity” to manage it. He added that the growth to 250,000 members authorized by the Serve America Act will take place gradually.
Stephen Goldsmith, vice chair of the corporation’s board, added that the legislation includes money to help the agency provide information-technology support to the field and hire an outside management consultant. “We can rethink the way this organization is managed as a result of this bill,” he said.
House Bill to Expand National Service Introduced
Two Democratic lawmakers have introduced a bill in the House of Representatives to expand the country’s national-service programs and set up funds to help nonprofit groups expand innovative programs and recruit volunteers.
The bill, the Generations Invigorating Volunteerism and Education Act, is similar to legislation that has been introduced in the Senate, the Serve America Act (S.277).
The House bill was introduced on Monday by Reps. George Miller of California, chairman of the House Education and Labor Committee, and Carolyn McCarthy of New York. The education committee is scheduled to vote on the measure on Wednesday.
It would triple the number of participants in AmeriCorps to 250,000 and increase the education grants for participants; create new service programs for young people and older people; and create a Clean Energy Corps, Education Corps, Healthy Futures Corps, and Veterans Service Corps. It would also create a National Day of Service and Remembrance on September 11 to commemorate the 2001 terrorist attacks.
It would create a Community Solutions Fund to award competitive grants for innovative projects to tackle social problems and a Volunteer Generation Fund to provide grants to help organizations that work with volunteers improve their programs.
More information about the legislation is available on the House Education and Labor Committee’s Web site.
The Senate Health, Education, Labor, and Pensions Committee is holding a hearing Tuesday afternoon on the Serve America Act.
March 09, 2009
Nonprofit Coalition Asks States to Get Stimulus Money to Low-Income Workers
A coalition of 20 advocacy and research groups has endorsed a set of principles designed to ensure that states use money from the economic-stimulus package adopted by Congress to help low-income families and unemployed workers.
The “Principles for State Implementation of the American Recovery and Reinvestment Act” were drawn up by the Working Poor Families Project, a foundation-financed program that promotes state policies that help low-income workers.
“States should make sure to use resources that help workers get the education and experience needed to obtain middle-skill jobs in high-demand sectors such as construction, health care, and ‘green’ industries,” Brandon Roberts, the project’s manager, said in a statement. “If used effectively these funds can foster economic growth and build secure economic futures.”
Among the principles:
- Make it a priority to create family-supporting jobs.
- Use money to build worker skills and link training to job-creation efforts.
- Invest in distressed neighborhoods.
- Allocate resources based on goals and standards through transparent processes.
The document was endorsed by groups that include the Center for Community Change, the Coalition on Human Needs, the Economic Policy Institute, and Wider Opportunities for Women.
Nonprofit Leader Named Ambassador for Women's Issues
President Obama has nominated a nonprofit leader to the new post of ambassador-at-large for global women’s issues — Melanne Verveer, co-founder of Vital Voices Global Partnership, in Washington.
The post is in the State Department, which means Ms. Verveer will be working with Hillary Clinton, now the secretary of state, a second time around.
Before co-founding Vital Voices, which helps train women leaders around the world, in 2000, Ms. Verveer was chief of staff for Ms. Clinton, then the first lady, as well as assistant to the president. She helped establish the President’s Interagency Council on Women, which was set up to help implement an action plan adopted at a 1995 United Nation conference on women.
Ms. Verveer has also served as executive vice president of People for the American Way, coordinator for civil rights and urban affairs at the U.S. Catholic Conference, and field manager at Common Cause.
“The president’s decision to nominate an ambassador-at-large for global women’s issues is unprecedented and reflects the elevated importance of global women’s issues to the president and his entire administration,” the White House said in a statement.
March 06, 2009
Estimated Impact of Obama's Charitable-Deduction Proposals Detailed
Indiana University’s Center on Philanthropy has posted a paper explaining how it calculated how much giving would fall under proposals by President Obama to limit charitable deductions and raise the upper tax brackets.
The center announced last week that charitable donations would have dropped almost $3.9-billion in 2006 if the two measures had been in effect that year.
President Obama has proposed capping the tax break for itemized deductions on federal taxes, including donations to charity, at 28 percent as a way to raise money to help reshape the country’s health-care system. He has also proposed raising the upper tax brackets from 33 percent and 35 percent to 36 percent and 39.6 percent.
The Tax Policy Center has made a different calculation of how much giving would be affected if the two tax proposals were imposed in 2011, as suggested by the president. The center, a joint venture of the Urban Institute and Brookings Institution, projects donations would fall by $9-billion. The explanation is posted on the center’s blog, TaxVox.
Charities Urge President to Coordinate Humanitarian Efforts in Iraq
More than 40 charities have called on President Obama to develop a plan for alleviating the humanitarian crisis in Iraq and helping Iraqis who have fled their country because of violence.
The charities said, in a letter this week, that efforts by nonprofit groups to improve conditions in local Iraqi communities, supported largely by the U.S. Agency for International Development, are “among the few U.S.-sponsored development programs in Iraq that have largely accomplished their goal.”
But they said charities’ efforts in Iraq have been overshadowed by projects undertaken by the military and by for-profit companies. In order for charities to better assist Iraqis in improving their lives, the organizations suggested that Secretary of State Hillary Clinton ought to lead an effort that would involve nonprofit groups, the United Nations, the Iraqi government, and its neighboring countries, in developing a comprehensive strategy to improve the conditions in which Iraqis live.
The charities, which include Refugees International, International Rescue Committee, International Medical Corps, and many others, suggested the strategy ought to include: goals for measuring progress; more support to vulnerable people living in Iraq; aid to Iraqi refugees; and a commitment to resettle more Iraqis in the United States.
March 04, 2009
NEA Posts Guidelines for Stimulus Grants
The National Endowment for the Arts has posted grant guidelines for the $50-million it will distribute as part of the recently passed stimulus bill.
Sixty percent of the money — $30-million — will be awarded competitively to nonprofit groups. Applicants must be previous NEA award recipients from the past four years.
Organizations can request a grant amount of $25,000 or $50,000 either to pay the salaries, full or partial, for one or more positions that are critical to their artistic mission but that have been or are in danger of being cut because of the difficult economic climate, or to pay fees for previously engaged artists to maintain or expand the period during which they would be engaged.
Regional and statewide arts councils can apply for grants of $100,000 or $250,000, which they will then distribute to local arts organizations.
Applications must be submitted online by April 2. The grants will be awarded in July.
The remainder of the money — $20-million — will be distributed to designated state and regional arts agencies for projects that focus on the preservation of jobs in the arts. Applications for those funds are due March 13.
March 03, 2009
Tax-Deduction Proposal Would Cause Giving to Drop by 1.3%, Study Finds
President Obama’s proposal to limit the tax breaks would cause giving to decline by an estimated 1.3 percent a year, the Center on Budget and Policy Priorities said today in a new analysis. They said that other proposals in the budget further minimized the effects of the tax changes.
“Over all, the effect of the budget proposals on charities is probably a very small negative at worst—and quite likely a net positive,” the center, which analyzes the impact of government spending on low and middle-income people, said in a report.
President Obama has proposed limiting the tax break that families earning more than $250,000 can get on their itemized deductions, including donations to charity, at 28 cents for each dollar of expenses — starting in 2011. The current top rate, for people in the highest tax bracket, is 35 cents. The tax savings would help pay for a plan to make health care more affordable and available to more people.
The center said an analysis by the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institution, found that the proposal would affect only 1.2 percent of U.S. households, those in the the 33-percent and 35-percent tax brackets.
To counter that, “Health reform will greatly reduce the burden on nonprofit organizations to provide free health care, thereby offsetting to a significant extent the overall drop in contributions,” the center said.
Furthermore, the center said, the president’s budget proposes keeping the estate tax as it stands, rather than allowing it to be repealed or shrink further, which will operate as “a powerful incentive for charitable giving.” (This tax prompts some people to give to charity as a way to decrease the tax liability on their estates.)
March 02, 2009
Congressman Makes Push to Oppose Deduction Plan
Rep. Roy Blunt said he plans to lead an effort to oppose President Obama’s plan to limit the amount of money wealthy donors can deduct from their federal taxes for charitable contributions.
Mr. Blunt, a Missouri Republican, said he is calling on House Speaker Nancy Pelosi, a Democrat, to engage in a bipartisan effort against the proposal.
“This is a tax increase and it’s being levied at a time when contributions are sorely needed but at an all-time low,” Mr. Blunt said in a letter to Ms. Pelosi. “I am puzzled why this President — who has frequently called upon Americans to take responsibility for building their communities and institutions — would hinder many Americans from continuing to contribute voluntarily to our nation’s charitable organizations.”
IRS Says Charity Web Site Crossed Line Into Prohibited Activity
The IRS has ruled that a local chapter of a national nonprofit group violated the prohibition against politicking by including the political-campaign materials of an affiliated advocacy group on its Web site, even though the materials appeared on discrete pages and the advocacy group paid all associated costs.
Marcus S. Owens, a Washington lawyer specializing in nonprofit issues, says the ruling ignores critical Supreme Court and appeals-court decisions that say charities can wall off the political activities of their related advocacy groups through such means as cost-sharing.
“The IRS set out a sweeping position here, and provides no boundaries for its analysis,” says Mr. Owens, who is the former chief of the IRS’s tax-exempt division.
He says, for example, that if the IRS bars the sharing of Web space between charities and related advocacy groups, what’s to stop the service from ending the long-standing practice of office sharing where the affiliated group pays for its portion of the costs.
At issue in the ruling was whether the organization improperly intervened in a political campaign because its Web site contained the group’s banner, logo, and other indications of ownership on Web pages that included the advocacy group’s endorsements of candidates for political office.
As is its policy, the IRS did not identify the organizations involved (Technical Advice Memorandum 200908050).
The ruling said that the local organization and the advocacy group shared some board members, employees, and office space, with the advocacy group reimbursing the chapter for its costs.
It said that the advocacy group had maintained a separate Web site for several years, but that after repeated technical troubles, the local group’s Web-site manager said the best corrective action was for the local group to house the advocacy group’s Web pages on its Web site. The pages were designed as a subset of the local group’s site, and the advocacy group paid for its share of the space.
But the IRS determined that the Web pages of the two groups were “virtually indistinguishable” from one another, and thus the local organization was considered to have itself distributed the political materials contained on the advocacy group’s pages.
— Debra E. Blum