Legislative Alerts

What You Can Do:

Send letters to your senators & house members.
Click here if you don’t know who your U.S. senators are.
Click here if you don’t know who your U.S. house member is.
Personalize your letters – it will receive more attention if it doesn’t look like every other letter.
Fax your letters. Mail takes too long and emails receive scant attention. Click here for your members’ fax numbers.
Send this information to as many colleagues you know (non-ALDE members) who are interested in supporting the fundraising profession.

PAST LEGISLATIVE ALERTS:
Click on the underlined ALDEGram for the complete article.

Gift Receipts (ALDEGram December 20, 2006)

The following came from American Charities for Reasonable Fundraising Regulation
We won a nearly complete victory when the U.S. Postal Service withdrew its proposed interpretation of some new rules and adopted a compromise which we helped develop. One caveat remained, however; we are not permitted to use the word “receipt” on a letter to a donor and mail at the nonprofit standard rate. Such letters must be mailed first class.

We all felt we could live with that compromise until Congress passed the Pension Reform Act of 2006. This legislation, which was part of Sen. Grassley’s “charitable reform” proposals, provides that all cash contributions to charities, regardless of amount, be substantiated by a “bank record or a written communication from the donee showing the name of the donee organization, the date of the contribution, and the amount of the contribution” if the donor wants to deduct the amount of the contribution.

Thus, a donor can keep a cancelled check or they may ask the charity for a receipt. It is still true that a charity need only provide a receipt if the gift is $250 or greater. But most charities aren’t used to $25 donors asking for receipts. This law sets no floor. Now, even a cash donation of $1 in a Salvation Army kettle outside a grocery store cannot be deducted without some form of receipt.

Taken together, the effect of the U.S. Postal Service rule and the new law will hurt charities by increasing costs and decreasing donations. Many charities want to accommodate their donors when the donor wishes to have a receipt. But if the charity mails a receipt, it can only be sent using first-class postage at approximately three times the standard nonprofit rate.

For the time being, it is our suggestion that you consider mailing receipts in January to donors who request them, recapping the donors’ gift history for the prior year, but if you wish to do so at the nonprofit rate, be sure it is in the form of a thank-you letter and not a receipt. The letter could say: “Thank you for you generous gifts in 2006. We want you to know how important your support is to our organization, and we want to take this opportunity to tell you what we are doing with those donated funds…”

ALDE Staff found these IRS articles which may help clarify some of the above details:

Recent Tax Law Changes May Affect People Giving to Charity: IRS Offers Tips for Year-End Donations

New Guidelines for Payroll Deduction Contributions to Charities

Changes being proposed by Senate Finance Committee: Filing Fees for non-profits! (ALDEGram May 18, 2005) For clarity on potential changes being proposed by the Senate Finance Committee, please read the staff discussions draft here. For instance, in Section H. Funding of Exempt Organizations and for State Enforcement and Education, the Senate Finance Committee states that a filing fee could be imposed on organizations that file the Form 990. Seven bullet points describe how the fees would be used. You may want to advocate your Senators to encourage adequate authorization of federal appropriations so that the filing fees would not be imposed.

Also consider visiting the Panel on the Nonprofit Sector's interim report at: http://www.nonprofitpanel.org/interim. They do a good analysis and presentation of the issues, with recommendations.

PASSAGE OF MAJOR CHARITABLE REFORMS BY MEMORIAL DAY? (ALDEGram May 9, 2005) According to Capitol Hill staff, Sen. Chuck Grassley (R-Iowa), chair of the Senate Finance Committee, is seeking to have his charitable reform measures passed by Memorial Day. These measures likely will include:

changes to the noncash gift deduction rules, dramatically limiting the deduction a donor could take;
the implementation of a federal accreditation program;
the creation of Form 990 filing fees to be imposed on charities;
state enforcement of federal laws that likely would result in 50 different interpretations;
restrictions on the size of boards; and
a requirement compelling charities to submit extensive and detailed information justifying their tax-exempt status to the IRS every five years.

Harmful Changes to Non-Cash Contribution Rules (ALDEGram May 9, 2005) One of the most troublesome proposals would eliminate or modify deductions for non-cash—“in-kind”—charitable contributions (possibly affecting everything from real estate to art and intellectual property to food, books and household items). Following upon its successful assault on the vehicle donation rules late last year, the Senate Finance Committee is now considering fundamental changes to gifts of just about everything else. Other Proposals:

The implementation of a federal accreditation program (possibly requiring charities to pay accreditation fees and dues)
The creation of Form 990 filing fees to be imposed on charities
State enforcement of federal laws that likely would result in 50 different interpretations
Restrictions on the size of boards
A requirement compelling charities to submit extensive and detailed information to the IRS every five years justifying their tax-exempt status.

IRA ROLLOVER LEGISLATION: (ALDEGram May 9, 2005)
ALDE is a member of the American Council on Gift Annuities (ACGA). Recently we received an email from ACGA re: the IRA Rollover Legislation. At this time, no action is needed on your part. Revenue Procedure 2005-24
Very likely, you are already aware of the Revenue Procedure and the necessity of securing a waiver from the spouse of a donor of a charitable remainder trust, if they reside in a state where a spouse’s elective share of a grantor’s estate could include assets of a CRUT or CRAT. In the event you are not aware of it, you can learn more in an excerpt from Taxwise Giving by clicking on this link: http://www.taxwisegiving.com/practice/taxwise1.htm

Revenue Procedure Affects Future Charitable Remainder Trusts (ALDEGram April 2005) - The IRS recently issued a revenue procedure of great importance concerning charitable remainder trusts. This procedure is intended to make certain that assets of a charitable remainder trust pass to charity rather than to a spouse in states where a surviving spouse may reach assets in a charitable remainder trust created by the deceased spouse. However, this can be easily addressed by including a spousal waiver clause in the charitable trust. Charities are strongly encouraged to discuss this with their legal counsel. Mark Weinrich, Director of Planned Giving for Washington University in St. Louis and ALDE member says, "This announcement will affect Charitable Remainder Trusts established after June 28, 2005. It is very important for charities involved in planned giving to have their counsel review Revenue Procedure 2005-25 along with your charitable trust documents so that proper spousal waiver language is included in future trusts."

Non-Cash Gifts Targeted for Elimination by Congress - (ALDEGram April 2005) - The Senate Finance Committee has been considering ending the Non-Cash Gifts donations along with many other reforms related to the oversight and accountability of the Nonprofit Sector. Independent Sector, of which ALDE is a member, issued an interim report for senators regarding reforms and accountability in early April to the Senate, but the final report is not expected before June. ALDE has not officially endorsed the interim report since it is not final and changes may still occur.

Concern that legislators may not wait for the final report caused several organizations to meet to discuss other lobbying efforts. However, it is not clear just which organizations those are.

At this point, the best effort that you as an ALDE member can make is to contact your own Senators and express concern about how removing non-cash deductions would effect your organization's ability to support its mission.

California Gift Annuities (ALDEGram September 2004) - The governor of California has signed the bill SB 1088 which changes the investment parameters for California Gift Annuities. For a copy of the bill, click here

Care Act (ALDEGram August 2004) - The CARE Act’s fate is on hold until September (Aug. 2, 2004). The U.S. Congress adjourned for its August recess before taking action on a key tax bill, leaving the fate of the Charity Aid, Recovery and Empowerment (CARE) Act unknown until after Labor Day, Sept. 6, 2004. Click here for more information.

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