Tax Issues 2015 – Charitable Giving

Charities-Only Tax Bill Nearly Passes in the House

The work of charitable nonprofits in communities throughout the United States fell just a few votes short of receiving a boost by Congress last week when the Supporting America’s Charities Act, H.R.5806, was introduced, debated, and voted on by the House of Representatives. H.R. 5806 sought to make permanent three charitable giving tax incentives: allowing older Americans to make IRA rollovers for charitable purposes without suffering tax consequences; promoting an incentive for donations of conservation easements to protect the environment; and making it easier for farmers and small businesses to donate food to community food banks. The bill was deemed necessary because separate House-passed legislation (H.R.5771) to provide a so-called “one-year” extension of 50+ expired tax provisions would have the effect of promoting charitable giving for less than three weeks – from the date President Obama signs the bill until December 31, 2014 when the tax provisions expire again. Although a majority of the House voted in favor of H.R.5806, the bill needed support from two-thirds because of the procedural rule that allowed expedited consideration. The final vote was 275 to 149, with 47 Democrats joining 228 Republicans in support of the bill – 65 percent of the vote, eight votes short of the two-thirds needed to pass. Ultimately, the bill failed because the House Democratic leadership and the White House worked hard against the bill, which they reportedly opposed because the tax cuts were not directly offset with revenue increases and they saw it as a precedent-setting test of the power of the President’s veto threat. For more information, see the Nonprofit Community Joint Statement to House leaders, a December 11 ad in Politico, and the statement of the National Council of Nonprofits

Congress Averts a Government Shutdown, Approves Funding Through September

The Senate followed the House in passing a $1.1 trillion appropriations bill that folded a year’s worth of legislating into one 1,600 page document. The legislation provides year-long funding for every federal agency except the Department of Homeland Security, which was singled out for short-term appropriations by Republicans objecting to President Obama’s executive actions removing the threat of deportation for five million individuals in the country illegally. The so-called “Omnibus” bill provides level funding and some increases for some programs, but funding for the Internal Revenue Service, which enforces the tax laws and provides educational assistance to nonprofits, was reduced out of continuing concern over allegations that IRS employees discriminated against conservative groups seeking tax-exempt status. The bill includes numerous controversial provisions, such as language weakening the Dodd-Frank law regulation of banks and a hike in the level that individuals can contribute to political parties for certain purposes. In passing the legislation, which President Obama has said he will sign, Congress averted shutting down the federal government.

Incoming Senate Tax Chairman Issues Backgrounder on Tax Reform

The incoming chairman of the Senate Finance Committee, Sen. Orrin Hatch (R-UT), released a study by Republican committee staff that he believes explains the many reasons why tax reform must happen swiftly, including promoting efficiency and economic growth, achieving a more equitable tax code, simplification, and bringing the outdated tax code into the 21st century.Comprehensive Tax Reform for 2015 and Beyond, which will likely be used as a guide by federal and state legislators alike, provides useful background on the rationale, and potential previously proposed reforms, for such nonprofit issues as the charitable deduction (pages 76, 96-98) and unrelated business income taxes (page 145). In releasing the report, Sen. Hatch issued an open invitation, stating, “I am willing to work with anyone – Republican or Democrat – to fix our country’s tax code and I hope this report will be viewed as an invitation to work together on these critical issues.”

 Difficult Financial Times Continue for States, Nonprofits

Consensus at the November meeting of the National Academy of Public Administration about government funding for services provided by nonprofits was rather bleak. State budget improvements in some states do not mean that state governments have recovered. In 2014, total spending for all 50 states fell below its peak in 2008. This is partially due to the ongoing cuts in federal discretionary spending, a trajectory that is likely to continue unless the Budget Control Act is amended. One speaker opined that if the Budget Control Act and its arbitrary, across-the-board cuts policy known as “sequestration” remain in effect, non-defense domestic discretionary spending will drop below the lowest level in the modern era. Much of the funding for the services that nonprofits provide in communities comes from discretionary grants from the federal government to state and local governments, which in turn contract or grant with nonprofits.

Taxes, Fees, PILOTs

Taxes: A Kirkwood, Missouri Presbyterian retirement home has agreed to pay a $1 million annual property tax bill, 80 percent of what it would owe if it were a for-profit business. Of particular note, the St. Louis County Assessor challenged the tax-exempt status of the nonprofit facility after an investigation by the local newspaper into religious-affiliated retirement communities. The Assessor grabbed attention by stating, “You can have ‘Presbyterian’ in your name all you want, but if you walk like a for-profit and quack like a for-profit, it means that you are a for-profit.”

  • PILOTs: Radnor Township, Pennsylvania has asked three universities to make voluntary paymentsreportedly to help cover their use of police, fire, and other essential services. The schools – Villanova, Eastern University, and Cabrini College – have so far declined the request from the local government, stressing that their legal tax-exemption is based on the real social and economic good they bring to the community.
  • PILOTs: Waterville Township, Maine has agreed to allow Centerpoint Community Church to buy property in a commercial zone after initial resistance. The town council was concerned at the prospect of allowing more non-taxable property, but approved the transaction after a group of churches in the community offered to chip in to defray some costs of the town, such as by purchasing cameras for the police department.
Arizona De-Regulated For-Profit Fundraising Firms

Recent media coverage suggests that a 2013 Arizona law repealing nonprofit fundraising registrations may haveaccidentally eliminated disclosure requirements for for-profit fundraising activities as well, but that result was predicted before that law was passed. The issue came to light as a Scottsdale, Arizona, telemarketing firm and a Texas sheriff’s union came under investigation for not disclosing their fundraising activities to the state as required by Texas law, as well as not disclosing to donors that more than two-thirds of contributions go to the telemarketer. The law to de-regulate fundraising activities of charities in Arizona was proposed and passed on the presumption that regulation activities were a “waste of resources” and a “hassle” for the Secretary of State as well as the charity. However, the legislator who sponsored the bill recently said that eliminating the registration requirements for contracted fundraising firms could have been an oversight. Patrick McWhortor at the Alliance of Arizona Nonprofits pointed out at the time of passage that the bill was poorly drafted and warned that removing all regulations for solicitations may lead to Arizona becoming a haven for fundraising scams.

Florida to Consider Sales Tax Exemption for Original Art

Legislation prefiled this week in Florida could exempt original works of art from the state sales tax. The exemption would apply to original works of art, priced at less than $1000, signed and sold by the artist. The proposal may be considered when the Florida legislature convenes in early March.

 

 The Twittersphere as Megaphone, Focus Group

The decision by lawmakers to push a charities-only tax bill in the waning days of the 113th Congress was not made until the weekend of December 6; the bill (H.R.5806) was introduced on Monday the 8th, and House floor vote occurred on Thursday the 11th. The nonprofit community had to coalesce and mobilize very, very quickly in that compressed time period. “Tweets” turned out to be an effective tool for action advocacy as well as message development.

While not suited for providing detailed analyses of policy proposals, tweets were ideal for getting the word out and for connecting interested people to actions they could take to make a difference. For example, most state associations of nonprofits sent out ACTION ALERT emails to their members on the Mondaymorning, and expanded their reach by tweeting the news as well. Multiple national groups also used this medium and shared common messages to frame and drive home consistent messages to lawmakers. Many nonprofit staffers who didn’t receive (or received but didn’t read) the email messages caught wind of the campaign either directly from the state association or other national groups’ tweets, or from a friend retweeting the message. Mobilization was near instantaneous.

And as a peer-to-peer mobilizer, the use of pictures proved powerful, as this image demonstrates:

HR5806

 Perhaps the most tweeted and retweeted messages were those that combined compassion and outrage over congressional inattention: “Hungry families will still be hungry in January if#HR5806 is voted down in the House today. Demand@HouseDemocrats @HouseGOP vote YES!,” and “It is time for warmer hearts. Tell your Rep to vote YES on #HR5806#IdahoPol.”

And then there is the follow up after the votes have been cast and counted. Despite the outcome of the vote on H.R.5806, the Supporting America’s Charities Act, effective nonprofit advocates took to Twitter to swiftly register their appreciation to the Representatives who stood up to support the work of charitable nonprofits (e.g. from Kentucky, “Thanks @RepHalRogers@RepAndyBarr @RepEdWhitfield @RepThomasMassie@RepGuthrie for supporting #HR5806. Pls keep working to#protectgiving!”)

Social media has been used as an advocacy tool for several years, but it is still evolving. Tweets during the campaign to pass the Supporting America’s Charities Act showed the effectiveness of this tool and demonstrated that in the hands of creative and passionate advocates, tweets can cut to the essence of the issues at hand.

 

Federal Issues
  • Charitable Giving Incentives
  • Omnibus Spending Bill
  • Tax Reform

State and Local Issues

  • Government Budgets: US
  • Taxes, Fees, PILOTs: ME, MO, PA
  • Fundraising Registration: AZ, TX
  • Tax Exemption: FL

Advocacy in Action

♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

Worth Quoting

“What I do, rather than complain or criticize, is just keep coming back. Not give up and complain and throw rotten fruit at each other. Just keep coming back.”

– Sen. Ron Wyden (D-OR), Chairman of the Senate Finance Committee, quoted inWashington Post, December 11, 2014.

“Buncombe County saves huge amounts of taxpayer money by (1) identifying a specific need, (2) partnering by contract with an organization that is set up to provide the need in a cost-effective way, and (3) carefully monitoring the progress and success/failure of the nonprofit to deliver agreed upon benchmarks or results by ongoing and periodic reports …. In short, I believe that partnering with existing nonprofits gives our citizens the best possible delivery of desired services at the lowest possible cost.”

David Gantt, Chair of Buncombe County (NC) Board of Commissions Commission, responding to questions in Asheville’s Mountain Xpress, November 19, 2014.

On the Omnibus Spending Bill

We’re doing more in eight days than we did all year.”

– Retiring Rep. Jim Moran (D-VA), who voted for the Omnibus spending bill, quoted in “A productive week for an unproductive Congress,”Washington Post, December 11, 2014.

“Putting these two things in the same bill illustrates everything that’s wrong with the political process right now: a giveaway to the special interests and then providing them the ability to more easily finance the process.”

– Rep. Chris Van Hollen (D-Md.), who opposed the Omnibus bill in part because of a provision that loosened campaign finance limits, quoted in the sameWashington Post article.

“The rush Tuesday to post the legislation underscored the 113th Congress’s dubious record as one of the least productive in modern history — governing by deadlines and cliffs of its own making, and struggling to pass even some of the most pro forma pieces of legislation.”

– “Congressional Leaders Reach Deal on Spending,” New York Times, December 9, 2014.

Worth Studying

New Jersey Assembly Resolution No. 193, a measure urging Congress and the President to take actions to “enhance the charitable food donation deduction” in federal tax law as proposed in H.R.4719, the America Gives More Act. The resolution serves as a model for presenting data and the rationale for taking action.

Worth Reading

Using Data to Build Nonprofit Advocacy Capacity, Rick Anderson (Senior Policy Coordinator for the state Washingtonassociation Nonprofits), Market for Goodwebsite, December 12, 2014, explaining the work of Washington Nonprofits in presenting data in innovative ways to give local networks tools to demonstrate and communicate measurable impact on complex social problems and improve the state policy and budget environment for the work of nonprofits and their local networks.

Worth Recognizing
CT’s ‘nonprofit guru’ steps down after 35 years,” Hartford Business Journal, December 15, 2014, chronicling the career and nonprofit advocacy successes of Ron Cretaro, Executive Director of the Connecticut Association of Nonprofits, who is retiringDecember 31 after 35 years. Cretaro was one of the founders of the National Council of Nonprofits.
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The Hawaiian Homes Commission welcomed its newest member, Kathleen Puamaeʻole Chin,

HHC Welcomes New Kauaʻi Commissioner Pua Chin

by Ku’uwehi Hiraishi

PuaChin

KAPOLEI, OʻAHU – The Hawaiian Homes Commission welcomed its newest member, Kathleen Puamaeʻole Chin, this morning, prior to the start of its December meeting in Kapolei. Chin was appointed to fill the vacant Kauaʻi Commission seat on November 10, 2014, by former Gov. Neil Abercrombie.

Chin presently serves as Kauaʻi Island Utility Cooperative (KIUC) Executive Administrator and previously served as Administrative Assistant to the KIUC Board of Directors since 2006. She has served as a construction industry administrator, worked in commercial aviation and is an entrepreneur and small business owner.

She is a Hawaiian Homes lessee and an active member of the West Kauaʻi Hawaiian Homes Association and the Kauaʻi Native Hawaiian Chamber of Commerce. She is a graduate of the University of Hawaiʻi at Mānoa and the Kamehameha Schools – Kapālama.

“We’re excited to welcome Commissioner Chin aboard,” said Jobie Masagatani, Chair of the Hawaiian Homes Commission and Director of the Department of Hawaiian Home Lands. “Her business background coupled with her involvement with Kauaʻi’s native Hawaiian community will be an asset to the Hawaiian Homes Commission as well as to the beneficiaries served by the Hawaiian Homes Trust.”

Chin’s appointment to the Hawaiian Homes Commission is on an interim basis, subject to confirmation by the Hawaiʻi State Senate.

Brian Shatz NEWS!

Aloha,Last week, Senator Schatz was named to a seat on the key United States Senate Appropriations Committee.

As a member of the Committee, the Senator will help determine federal funding priorities and ensure Hawai‘i’s needs are represented. He was also one of three Democrats named to the Senate Select Committee on Ethics and will continue to serve on the Indian Affairs and Commerce, Science, and Transportation Committees.

In addition, Senator Schatz was named to the Democratic Steering and Outreach Committee, a leadership committee that makes recommendations on committee assignments and gives community leaders the opportunity to directly discuss their priorities with members of the Senate.

These five Committee assignments will strengthen Senator Schatz’s ability to impact issues important to all of us and make sure Hawai‘i’s priorities are reflected in the national policies and budget.

As always, please feel free to call our Washington D.C. or Honolulu offices if there is anything we can do to assist you.  We’re here to help.

Mahalo,

Sarah Kaopuiki

Director of External Affairs

Office of U.S. Senator Brian Schatz

 

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SCHATZ NAMED TO KEY POST ON SENATE APPROPRIATIONS COMMITTEE

Will Serve on a Total of Five Committees in the Senate

Washington, D.C. – United States Senate Democratic leadership announced the selection of U.S. Senator Brian Schatz (D-Hawai`i) to serve on the key Senate Committee on Appropriations.

The appointment is an especially important one. Prescribed in the U.S. Constitution, the Committee writes the legislation that allocates funds to government departments, agencies and organizations. The Committee also has responsibility for supplemental spending bills as may be needed during the fiscal year.

“This is an important job because the Committee makes appropriations that support our national priorities, and because I will be in a position to ensure that the needs of Hawai`i are strongly represented at a critical juncture,” stated Senator Schatz. “It is an honor and I look forward to working with all Committee members as we move forward.” 

“The Appropriations post is a most significant one for our State and Country,” stated Retired Admiral Thomas Fargo, former Commander of the United States Pacific Command. “This appointment so early in his career speaks to the fact that Senator Schatz has earned the respect of his Senate colleagues and is increasingly effective in Washington.” 

And the Senator will also retain his seats as a member on the Senate Committee on Commerce, Science and Transportation and the Senate Committee on Indian Affairs.

In addition, Senate Democratic leadership selected Senator Schatz to serve as one of three Democrats on the Senate Select Committee on Ethics. The Ethics Committee investigates allegations, and recommends disciplinary action, in cases of improper conduct by senators including violations of law or Senate rules and regulations.

Appointments to these four committees are subject to a full vote by the Senate that is scheduled to occur in early January 2015.

Senate Democrats have also named Senator Schatz to the Democratic Steering and Outreach Committee, a Democratic leadership committee. The group makes recommendations on committee chairmanships and committee assignments to the Democratic caucus. It also brings together senators, community leaders, policy experts, businesses and intergovernmental organizations to help develop policies to strengthen the economy and support families, workers and businesses.

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Volunteer Position – Habitat Restoration Worker

Job Type: Habitat Restoration Worker – Volunteer Positions
Location: Kure Atoll Seabird Sanctuary
Duration: March 2, 2015 to October 2, 2015
Position closed: February 9, 2015
Description:
The State of Hawai’i’s Department of Land and Natural Resources, Division of Forestry and
Wildlife is seeking five volunteers for work at Kure Atoll for the Summer 2015 field camp. Deployment is scheduled to
occur on or near March 18, 2015. All personnel must be on O’ahu and available to work at least one week prior to
departure. The scheduled return date is on or near September 30, 2015, although this is subject to change. Field workers
are not required to stay in Honolulu after the ship has returned and is successfully offloaded

DHHL Meeting with Nanakulli-Waiaiane Homestead Communities

NanakuliWaianae Mtg Flyer Dec 2014

Hale Makana O Nanakuli will be a VITA Site in 2015

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Right now, leaders in the U.S. House and Senate are considering passing H.R. 5806, the Supporting America’s Charities Act. Please take action today to show your support for this important measure.

ACTION ALERT
Take action TODAY to help pass the Supporting America’s Charities Act in Congress!

Right now, leaders in the U.S. House and Senate are considering passing H.R. 5806, the Supporting America’s Charities Act. Please take action today to show your support for this important measure.

The Supporting America’s Charities Act would make three charitable giving incentives permanent — the IRA Rollover, the enhanced deduction for donations of food inventories and donations of conservation easements — so that nonprofits can plan for the future and secure support for their work.

Senators are expected to pass a short-term tax bill that essentially renews three charitable giving incentives for only three weeks. That’s not good enough for the people and communities that nonprofits are able to serve.

Congress needs to hear from you today to understand that passing permanent extensions of tax incentives is very important to nonprofits and the people you serve. CLICK HEREto read more.

TAKE ACTION

Time is truly of the essence, so contact our delegation today by phone, email, or social media. Ask them to pass H.R. 5806 to make the three charitable tax incentives (IRA, food, and conservation extenders) permanent before adjourning for the year; our communities rely on work funded by these incentives and we are counting on your help.

Representative Tulsi Gabbard
Phone: (202) 225-4906 (D.C.) or (808) 541-1986 (Honolulu)
Online form: https://forms.house.gov/formsgabbard/webforms/email-me.shtml
Twitter: @TulsiPress

Representative Colleen Hanabusa
Phone: (202) 225-2726 (D.C.) or (808) 541-2570 (Honolulu)
Online form: https://hanabusa.house.gov/contact-me/email-me
Twitter: @RepHanabusa

Senator Mazie Hirono
Phone: (202) 224-6361 (D.C.) or (808) 522-8970 (Honolulu)
Online form: http://www.hirono.senate.gov/contact/email
Twitter: @maziehirono

Senator Brian Schatz
Phone: (202) 224-3934 (D.C.) or (808) 523-2061 (Honolulu)
Online form: http://www.schatz.senate.gov/contact
Twitter: @SenBrianSchatz

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USDA Natural Resources Conservation Services- Pacific Islands Area

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WHO: Farmers, ranchers, foresters, and anyone interested in climate change.

WHAT: Round-table discussion about Soil & Water Resources Conservation Act (RCA).

WHEN: Thursday, December 11, 2014, from 9 a.m. to 3 p.m.

WHERE: North Conference Room of The Kunia Village & Agri-Business Complex located at 92-1780Kunia Road, Kunia, HI. (See driving directions at the bottom.)

Free to attend and lunch will be provided by the Farm Foundation.

WHY: Established by law in 1977, the RCA requires USDA to gather public input on natural resources conservation policy issues. The goal is to safeguard the nation’s natural resources to meet current and future agricultural needs, improve delivery of conservation services to landowners and communities, and expand participation in conservation programs.

HOW: Details are online at https://secure.farmfoundation.org/np/clients/farmfoundation/eventRegistration.jsp?event=369&

Discussion in each roundtable session will address three core topics:

  1. Water resource management
  2. Soil health
  3. Resilience of soil/water resources to climate change & extreme weather events

Directions to Kunia Village & Agri-Business Complex NORTH Conference Room

Driving west on H-1, you’ll pass the Waikele off-ramp on your right.  Take the next exit, 5B H1-750 KuniaNorth.

The exit puts you onto Kunia Road heading north; move to your left.

After driving approximately 5 to 6 miles through mainly open fields, the speed limit reduces to 35 mph (you will already have passed a golf course on your right).

Next you will see a flashing overhead yellow light and a sign on the left that says “Kunia Village & Agri-Business Complex SOUTH.”  Keep driving past this intersection.

Proceed past a yellow gate entrance on your left and, at the end of the tree line on your left, there will be another sign saying “Kunia Village & Agri-Business Complex NORTH.”  Turn left at this road and pass through the gate straight ahead and then turn left again.

The conference room is set back and to the left of the large warehouse as you enter this property.  Park anywhere; parking area is obvious.  The address is 92-1780 Kunia Road, but there are no visible address signs to go by.  If you get to a traffic light, you have gone too far.  You will be at a military installation.

Please call 621-1350 or 621-1351 if you get lost.

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Natural Resources Conservation Service
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