Tuesday, July 2, 2013
As part of its ongoing series on tax reform options, the Senate Finance Committee recently published a paper on Tax-Exempt Organizations and Charitable Giving. The report lists and briefly discusses many of the reforms for the sector that have been proposed at numerous hearings, in scholarly articles, in policy and commission papers, and by various lawmakers. It focuses on four broad areas:
Fundamental changes to the deduction, such as repealing it outright, replacing it with a credit, or limiting it via a cap or a floor.
Incremental changes to the deduction; for example, repealing the percentage limits or tightening the rules for contributions of conservation easements.
Commercial activity, such as taxing all such activity or requiring organizations that engage in fee-for-service activities to provide some amount of free or reduced-cost services;
and the proper treatment of political activity and lobbying; for example by requiring disclosure of the amount of such activity, capping such activity, or eliminating the 501(c)(4) category.
The changes mentioned above are only a fraction of the proposals listed in the paper, which provides a very nice listing of most of the major reform options that have been seriously discussed in the last ten or so years. Although many of the proposals in the paper are familiar to readers of this blog, what is particularly useful about this report is that it contains links to primary sources discussing each of these reforms, such as to hearing testimony, news articles, commission reports, scholarly articles, and other studies that propose or discuss a given reform. To that end, the paper is a great resource for anyone wanting to review exempt organization reform proposals.
Monday, July 1, 2013
The new Giving USA Report shows that although giving is slowly increasing, we are still far from pre-recession levels. (The Chronicle of Philanthropy's coverage is here). Contributions in 2012 totalled $316.23 billion, which is a 1.5% increase from 2011 (after adjusting for inflation). Of that, individual contributions rose 1.9%, giving by foundations grew 2.3%, and corporate gifts rose almost 10% (also after adjusting for inflation). On the other hand, charitable bequests decreased by an estimated 9%. Given these small increases, the report notes that it will take six years for giving to reach its 2007 high if growth continues at current rates. Although individual gifts totalled $229 billion in 2012, for example, this figure is still 11% shy of the 2007 levels.
On the recipient side, arts, culture, and humanities groups saw the largest increases, while religion and social service groups were among those with the smallest increases. The report suggests these changes are due to donors returning to pre-recession priorities; if so, it is interesting to see how donors prioritize when they tighten their belts. Gifts to international relief organizations were also fairly flat last year.