Public policy has significant impact on foundation work. It not only greatly affects the way foundations operate as organizations, but also shapes the communities that foundations support. SECF typically maintains an educational, non-positional posture that will help facilitate a balanced discussion on significant public policy issues in which philanthropy is engaged.
However, SECF believes that promoting and defending philanthropy is a top priority of the organization. When appropriate, SECF may take a formal position with regard to a specific policy issue, and/or coordinate a program of public action and/or advocacy in an effort to increase awareness of philanthropy, promote its role and purpose, and actively defend its independence with elected officials.
SECF has developed a list of standard issues that it actively monitors and for which it may take a formal position or coordinate a program of action. This list does not preclude SECF from responding to crises, such as natural disasters, or responding to other sector needs as they arise.
- Private Foundation Excise Tax. Proposed legislation to simplify the private foundation excise tax would remove the current two-tiered excise tax imposed on private foundations and replace it with one flat rate. Past proposals have set the excise tax rate at 1.39 percent, a level deemed to be revenue neutral.
- IRA Charitable Rollover. Proposed legislation to extend and expand the IRA charitable rollover would include gifts to donor-advised funds, supporting organizations and private foundations. The Pension Protection Act of 2006 (PPA) permitted individuals to roll over up to $100,000 from an individual retirement account (IRA) directly to a qualifying charity without recognizing the assets transferred to the qualifying charity as income.
- Charitable Deductions. Under current law, charitable contributions are not included as taxable income if taxpayers choose to itemize their deductions. As a consequence, taxpayers generally are not subject to federal income taxes on charitable deductions. Several legislative proposals have considered capping the deduction, which SECF opposes.
- Estate Tax. Many in our sector believe that the federal estate tax provides strong incentives to people to donate from their estates to charitable organizations and encourages the donation of significant revenues to support services and programs that are vital to sustaining healthy communities and the well-being of Americans of all ages.
- Rural Philanthropy. Legislation that seeks investment of existing federal resources through the creation of a program within the U.S. Department of Agriculture or other appropriate federal agencies to provide challenge grants and capacity-building grants to build rural endowments could greatly benefit economically distressed rural counties (i.e. the Rural Philanthropy Growth Act).
- Charitable Tax Extenders. Tax extenders are a set of tax provisions that policymakers routinely extend for a year or two at a time. In recent years, these extensions have occurred at the end of the year, leaving donors and organizations uncertain about how to plan financially.
The Southeastern Council of Foundations also seeks to provide additional value to members by helping to track key state and local public policy issues of interest to Southern grantmakers and their grantees. Using Statescape – a tool available to all SECF members – we track legislation introduced across the Southeast. By monitoring and sharing information, we empower the funding community to advance helpful policies, alert colleagues of issues percolating in other states that have potential to spread, and stop proposals that could harm the philanthropic and nonprofit sectors.
- Tax Exemption Status and Caps. During the 2015 legislative session, several states considered changes to the tax exemption status of nonprofits and the overall value of the exemption. Specifically, in the South:
- During a special session, the Alabama Legislature passed a bill requiring nonprofits that are exempt from Alabama sales taxes to obtain an annual certificate of exemption and file annual information reports with the state Department of Revenue, which is given power to set up a new regulatory scheme. The governor signed the legislation and at the same time created a Tax Exemption Advisory Council of nonprofit representatives to help make sure that the new burdens of the law are imposed “in the least intrusive and least burdensome manner.”
- In North Carolina, lawmakers continue to consider measures that would cap the value of the exemption for larger nonprofits. The Senate also passed a bill to limit sales tax refunds on reimbursed purchases made by nonprofit staff, board members and volunteers for their organizations’ mission-related purposes.
If you know of relevant legislation that is not already being tracked in Statescape, please contact Adena Hill to have the bill added to the SECF tracking system. You can also assist us with identifying issues that can be the subject of further advocacy or member education efforts.
If you are interested in tracking these or other bills in your state’s legislature, either for advocacy or compliance, contact Adena Hill to gain free access to our state tracking tool, Statescape.