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Wednesday, September 28, 2005

President Signs Bill, Congress Begins Work on Long Term Reli
On Friday, President Bush signed The Katrina Emergency Tax Relief Act of 2005 (H.R. 3768), a bill that includes a number of charitable incentives designed to provide immediate relief to victims of Hurricane Katrina. This week, Congress is expected to begin consideration of longer-term relief legislation designed to help rebuild parts of the Gulf Coast.

Posted by Jennifer Lowe, 09:33:27 AM

Tuesday, September 27, 2005

Donor Intent Restrictions Stymie Charities
From the Washington Post:

Much of the $1.1 billion donated to charities to help the victims of Hurricane Katrina may be unavailable to assist those affected by Hurricane Rita because of legal limits on how the organizations can use the money.

Rita is widely expected to cause significant damage along the Gulf Coast when it slams into the Texas shoreline late today or early tomorrow. But laws in most states requiring charities to honor donors' intentions will hamper the charities' ability to use money raised for Katrina victims to aid survivors of Rita, relief organizations and legal experts said yesterday.

Posted by Jennifer Lowe, 01:22:25 PM

White House May Ask for 1 Billion for 9 Nonprofits
The White House is drafting a plan that would provide more than $1-billion to nonprofit organizations to help resettle Hurricane Katrina survivors in cities across the country, reports CNN. The nine charities being considered to help with the resettlement process have experience helping refugees who have immigrated to the United States, and at least half are religious charities.

Also, Kathleen Blanco, governor of Louisiana, wants to create a nonprofit group that would act as a clearinghouse for information and assistance to the 1.3 million Louisiana residents affected by the Katrina and Rita hurricanes, reports the Associated Press. The Family Recovery Corps would rely on federal money and some donations and would work with the Federal Emergency Management Agency and the American Red Cross and other charities to assist people who lost their homes in the storms.

Posted by Jennifer Lowe, 01:17:13 PM

Charity Leaders Offer Various Views on Donations
Interesting article in the Chronicle of Philanthropy about where the donations are going and what they should be used for.

Posted by Jennifer Lowe, 10:48:29 AM

Monday, September 26, 2005

CARE To Be Re-introduced in Senate and House
Senator Santorum and Senators Lieberman have announced that they will propose a new CARE Act on Tuesday, September 27. This bill will be a freestanding piece of legislation containing key portions form the earlier CARE Act. A draft bill and a Dear Colleague letter has been circulating through Senate offices since Friday. Provisions of this new CARE Act include the non-itemizer tax deduction, the IRA rollover provision, the corporate tax deduction for certain food donations, corporate tax deduction for donated books, $150 million for the Capital Compassion Fund for capacity building, and over $1 billion additional funding for the Social Services Block Grant.

The Charity, Aid, Recovery, and Empowerment (CARE) Act was first proposed in both the 108th and the 109th Congress. While it received significant bipartisan support, the bill became mired in partisan politics. The CARE Act was reintroduced as part of an existing bill the MORE Act (S. 6).

Earlier this month, certain provisions of the CARE Act were incorporated into the Katrina Emergency Tax Relief Act of 2005 (H.R 3768). Unfortunately, the hurricane relief bill is only a a short-term quick-fix limited in scope and duration.

This new CARE Act will be a stand-alone bill incorporating many of the old CARE Act provisions - and unlike the hurricane relief bill, the new CARE Act will address the long-term needs of the charitable sector, by improving incentives for charitable giving.

Additionally, a companion bill will be introduced shortly in the House by Reps. Blount (R-MO) and Ford (D-TN).

Posted by Jennifer Lowe, 05:42:46 PM

FEMA Lets Volunteers Numbers Wither
Interesting article in the Washington Post about FEMA allowing their volunteer corps to wither on the vine. Volunteers are FEMA's lifeblood, allowing them to rescue individuals and families and clean up disaster areas.

To read the article, FEMA Lets Reserves Wither, Hurting Response

Posted by Jennifer Lowe, 04:06:53 PM

Thursday, September 22, 2005

Kudos Are Right, But Main Point Is Wrong
Michael Tanner of CATO begins a recent article giving kudos to the charities who responded to the devestation of Hurricane Katrina.

"While the response to hurricane Katrina has uncovered failures of government at every level - federal, state, and local - it has also revealed again the amazing generosity and effectiveness of America's private charitable efforts."

Tanner is right in giving kudos to the great works that groups like the Red Cross and the ASPCA are doing to help people and animals that are victims of Hurricane Katrina.

He also gives props to corporations that are opening thier wallets. "American business is doing its part, too. Wal-Mart, so reviled by the American left, not only donated $20 million in cash, 1,500 truckloads of free merchandise, and food for 100,000 meals, it promised a job for every one of its displaced workers no matter where in the country they end up. At least 90 corporations have donated at least $1 million each, many far more than that. Many companies in Louisiana and Mississippi have promised to continue paying their workers, even if their stores or businesses were wiped out."

However, his article continues on to advocate against the government as a first reponder. More of like a second responder.

Why?

"[P]rivate charity has long been recognized as more effective and efficient than government welfare programs. Local churches and community groups are the best positioned to understand the needs in their respective areas, and can direct money or services to where they are most useful. Private charities are generally far more flexible than government agencies, which are frequently bogged down in red tape and regulations."

While nonprofits may be more flexible than government entities, it does not mean that the government - at any level - should abstain from their responsibilty to protect its citizens. In New Orleans, the people depended on the government to ensure the levees were in place, work, and would be adequately maintained. But the government failed them. And now the Red Cross must clean it up.

On August 31, President Bush implored people to make donations to the Red Cross. And people did - to the tune of 1.06 billion dollars. But when disaster strikes, we should not have to rely on the generosity of individuals that are living paycheck-to-paycheck to begin with.

The nation's charities have done a stunning and stellar job after Katrina. But the government shouldn't shirk their responsibility just because the American people are willing to open up their hearts and their wallets.

Posted by Jennifer Lowe, 11:23:34 AM

Katrina Tax Legislation Sent to Bush
"A $6.1 billion tax-relief bill to aid in recovery from Hurricane Katrina cleared Congress, amid laments over the deficit but no clear direction from Republicans beyond creating World War II styled bonds to finance the debt from the disaster," the Wall Street Journal reports. "The House gave its approval on a 422-0 vote, and the Senate sent it on to President Bush for his signature last night without a roll call."

INCENTIVES FOR CHARITABLE DONATIONS:

Encourages cash donations by individuals. Under current law, individuals may deduct charitable donations up to 50 percent of their adjusted gross income. Deductions for charitable donations are further limited by the phase-out of itemized deductions. Under the proposal, cash donations to charities are exempt from the 50-percent income limitation and the phase-out of itemized deductions if the donations are made before January 2006.
Encourages cash donations by corporations. Under current law, corporations may deduct charitable donations up to 10 percent of their taxable income. The proposal waives the 10-percent income limitation for cash donations related to Hurricane Katrina if the donations are made before January 2006.
Modifies tax treatment when using a personal vehicle for charitable work. Under current law, individuals may claim a tax deduction for the costs associated with using a personal vehicle for charitable work. The deduction is calculated by using a mileage reimbursement rate of 14 cents-per-mile. The reimbursement rate for business use is set periodically through IRS guidance and currently stands at 48.5 cents-per-mile. The proposal sets the mileage reimbursement rate for charitable contributions at 70 percent of the standard business mileage rate. If the individual is a volunteer and is reimbursed for the use of the personal vehicle, the proposal ensures that the individual does not have to pay income tax on the reimbursement. Both provisions are effective through December 31, 2006.
Encourages charitable donations of food inventory. Under current law, C-corporations may deduct the cost of food inventory donations. The value of the deduction is equal to the lesser of two times the basis or basis plus one-half of the added value. The proposal extends the current-law deduction for food donations to S-corporations, partnerships and sole proprietors through the end of the 2005 calendar year.
Encourages donations of educational books to public schools. The proposal allows a charitable deduction through the end of the 2005 calendar year for donations of educational books to public schools. The value of the deduction is equal to the lesser of two times the basis or basis plus one-half of the added value.

The IRA Rollover has been jettisoned. For a summary of the legislation that has been sent to the president.

Posted by Jennifer Lowe, 08:45:05 AM

Tuesday, September 13, 2005

Summary of Santorum Hearing on Charities
The Council on Foundations just posted a summary of Santorum's hearing this morning on charities. If a transcript is released, we will post it.

Posted by Jennifer Lowe, 05:49:36 PM

Press Conference on Combating Charity Fraud

NEWS ADVISORY

Contact: Department of Justice, 202-514-2008

Alice S. Fisher, Assistant Attorney General for the Criminal Division; Chris Swecker, FBI Assistant Director of the Criminal Investigative Division; and Mary Elcano, American Red Cross General Counsel, will hold a press conference on efforts to combat fraud related to Hurricane Katrina charitable donations TODAY, SEPTEMBER 13, 2005 at 1:30 p.m. EDT.

WHO:

-- Alice S. Fisher, Assistant Attorney General for the Criminal Division

-- Chris Swecker, FBI Assistant Director of the Criminal Investigative Division

-- Mary Elcano, American Red Cross General Counsel

WHEN: Today, September 13, 2005 at 1:30 p.m. EDT. Media must pre-set by 1 p.m. EDT

WHERE: 7th Floor Conference Room, Department of Justice, 950 Pennsylvania Ave., N.W.

Washington, D.C. 20530

NOTE: ALL media MUST PRESENT GOVERNMENT-ISSUED PHOTO ID (such as driver's license) as well as VALID MEDIA CREDENTIALS. Media interested in attending the event must pre-set by 1 P.M. EDT. All press inquiries regarding logistics should be directed to Matthew Roper at 202-514-2007.

Posted by Jennifer Lowe, 12:23:10 PM

Santorum Holds Hearing on Charities
Sen. Rick Santorum held a hearing today on "Charitites on the Frontline" at 10 am. Here is the link to the witness statements. We will post a transcript as soon as it is available.

Posted by Jennifer Lowe, 12:12:55 PM

Senate Rushes to Address Katrina Relief

The Senate this week may rush through a Katrina tax-relief package.

For individuals, the package would exempt taxes on debt that is forgiven and waive the penalty tax on early retirement-plan withdrawals. Other incentives include a tax credit to encourage employers to hire Katrina evacuees, and for companies in the disaster zone to temporarily retain evacuees on their payroll. For people who house evacuees, the legislation would provide an additional $500 personal exemption for every dislocated person not already included on a taxpayer's return. A slew of other provisions would encourage donations of books, food and cash.

The Senate might consider two other hurricane-related bills this week to adjust federal flood insurance and welfare laws. Both measures have cleared the House.

The tax package's total cost could run between $3 billion and $7 billion, early estimates show. The benefits would be temporary, with most expiring at the end of this year.

The House Ways and Means Committee will consider its own slate of hurricane-related tax relief, but aides cautioned that the House's priorities could differ somewhat.

In a bipartisan statement issued Friday, Ways and Means members said that in coming weeks they would look at tax relief for individuals along with changes to unemployment, child support and foster care laws. Future legislation would address rebuilding incentives similar to the New York City revitalization efforts after the Sept. 11, 2001, terrorist attacks, the statement said.

For the press release

For a summary of the legislation

Posted by Jennifer Lowe, 11:30:08 AM

Some Charities Concerned About Donations in Wake of Katrina
Some charity officials in Southern California have started to run into fund-raising problems since Hurricane Katrina hit the Gulf Coast, and many others fear a drop in donations to non-relief causes, the Los Angeles Times reports. The Red Cross in Riverside County, for example, has had to lay off several employees because all gifts are earmarked for Katrina relief. Other groups have had to delay or cancel fund-raising events. Several charity officials say donations were already down because of ties to the South Asian Tsunamis.

Posted by Jennifer Lowe, 10:40:48 AM

Donations Pour In For Katrina Disaster

Americans have contributed at least $739-million to help victims of Hurricane Katrina.

The pace of giving is unprecedented in American history. In the 10 days after the 2001 terrorist attacks, Americans donated $239-million to charitable causes, and in the nine days after the tsunamis hit, major American relief groups raised $173-million.

Still, the contributions do not yet come close to the total amount raised in the wake of those disasters. After the 2001 terrorist attacks, charities raised more than $2.2-billion and U.S. charities have collected nearly $1.3-billion for the tsunamis.

The American Red Cross, in Washington, has raised far more than any other charity, taking in $578-million. By comparison, two and a half weeks after the South Asian tsunamis, the Red Cross had raised a little more than $173-million.

"It's overwhelming," says Sarah Marchetti, a spokeswoman for the Red Cross. "People are just pouring their hearts out, and making a donation is an expression of that."

For the entire article

Posted by Jennifer Lowe, 10:38:11 AM

Friday, September 09, 2005

Santorum to Hold Hearings
On Tuesday, September 13, 2005 at 10:00 am, the Senate Finance Committee’s Subcommittee on Social Security and Family Policy will hold a hearing titled, “Charities on the Frontline: How the Nonprofit Sector Meets the Needs of America’s Communities.” The hearing will take place in Room 106 Dirksen Senate Office Building

The Subcommittee, which is chaired by Senator Rick Santorum (R-PA), is expected to focus on the importance of the U.S charitable sector, the sector’s response to Hurricane Katrina and the need for Congress to enact the charitable giving incentives contained in the CARE Act. While charitable reform is not the focus of the hearing, we expect a number of Senators to ask questions related to the Senate Finance Committee’s reform proposals. The following witnesses will testify:

Luke Hingson, President, Brother’s Brother Foundation, Pittsburgh, PA

Major George Hood, Director of National Community Relations and Development, The Salvation Army, Alexandria, VA

Dr. Bob Reccord, President and CEO, North American Mission Board, Southern Baptist Convention, Alpharetta, GA

Dr. William G. Gale, Senior Fellow, The Brookings Institution, Washington, DC

Dr. Eugene Steuerle, Senior Fellow, Urban Institute, Washington,

Posted by Jennifer Lowe, 01:26:12 PM

Charitable Incentives Provisions
Senate Finance Committee Chairman Charles Grassley (R-IA) is now looking to attach charitable reform and incentive proposals to two major pieces of legislation that Congress will consider in the coming months. One expected legislative vehicle is a relief bill to aid victims of Hurricane Katrina that will move quickly starting next week. According to Senate Finance Committee staff, some of the provisions being discussed for the relief bill include funding for information sharing between federal and state governments, funding for electronic filing and incentives for donations of food and books (similar to those contained in the CARE Act).

Budget reconciliation legislation, expected to move in October, is the other legislative vehicle being considered by Chairman Grassley. Grassley and Senator Rick Santorum (R-PA), sponsor of the CARE Act in the Senate, met this week and discussed attaching the CARE Act (including the IRA charitable rollover provision) and charitable reform proposals to the budget reconciliation bill. Senate Finance Committee staff are still trying to determine what reform proposals will be included in the legislation, though they have indicated that a number of the proposals will mirror recommendations included in the Panel on the Nonprofit Sector’s final report.

Posted by Jennifer Lowe, 01:23:44 PM

Donate A Day!
Department of the Treasury and Internal Revenue Service officials announced today special relief intended to support leave-based donation programs to aid victims who have suffered from the extraordinary destruction caused by Hurricane Katrina.

Under these programs, employees donate their vacation, sick or personal leave in exchange for employer cash payments made to qualified tax-exempt organizations providing relief for the victims of Hurricane Katrina.

Under Notice 2005-68, employees can forgo leave in exchange for employer cash payments made before January 1, 2007, to qualified tax-exempt organizations providing relief for Hurricane Katrina victims. Employees do not have to include the donated leave in their income. Employers will be permitted to deduct the amount of the cash payment.

Posted by Jennifer Lowe, 08:07:53 AM

Wednesday, September 07, 2005

Chronicle of Philathropy Tracks Donations for Katrina
The Chronicle of Philanthropy is tracking donations for Hurricane Katrina, if anyone is interested in how much is being given, to which charities, and in the case of institutional donors, by whom. See: http://philanthropy.com/free/update/2005/09/2005090501.htm

Posted by Jennifer M. Lowe Davis, 03:11:30 PM

New Charities Get Expedited Process In Katrina's Wake
The Internal Revenue Service will provide an expedited review and approval process for new organizations seeking tax-exempt status so they can provide relief for victims of Hurricane Katrina, it said Sept. 6 in a news release (IR-2005-93).

While encouraging people to use existing organizations currently working on immediate aid efforts, IRS said it anticipates new charities will form to address the numerous and more specific needs of disaster victims.

"We want to make sure we do all we can to help charitable organizations get up and running so they can begin providing the assistance the victims of this terrible disaster so desperately need," IRS Commissioner Mark Everson said in the release. New organizations should apply for tax-exempt status by filing IRS Form 1023, Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code, writing at the top "Disaster Relief, Hurricane Katrina." The IRS will give the applications expedited attention to ensure they meet legal requirements, the release said.

"Just as we did after Sept. 11, we will put these applications at the head of the queue and turn them around promptly," Everson said.

However Everson noted that existing charitable organizations, including churches, are frequently able to administer relief programs more efficiently than newly formed ones because they already have fund raising and distribution infrastructure in place.

For more information, see the IRS website

Posted by Jennifer Lowe, 10:06:20 AM

9/11 Turning into Day of Charity
The campaign to turn 9/11 from a day of mourning into one of charity and cooperation has been gaining strength nationwide.

Recently, the New York-based One Day's Pay organization launched a $500,000 regional campaign called "NYC Remembers." The nonprofit group, founded prior to the first anniversary of the 2001 attacks, hopes to bring together the region in a spirit of voluntary charitable service on Sept. 11.

"Our ultimate goal is to help redefine the day so that future generations remember that 9/11 was about a lot more than the fear and destruction inflicted by terrorists; it was also about the bravery, selflessness and unity of people coming together in a time of great tragedy and need," said David Paine, president.

Their web site (www.onedayspay.org) provides a "one-stop-shop" in the form of links to many volunteer and giving opportunities through nonprofit partners, including New York Cares, the Mayor's Volunteer Center and the United Way. The site also invites visitors to voluntarily "pledge" to observe 9/11 as a day of service - the group has a goal of generating at least two million pledges this year.

For more information

Posted by Jennifer Lowe, 09:12:10 AM

Tuesday, September 06, 2005

Estate Tax Postponed!
Senate Majority Leader Bill Frist (R-TN) announced that Senate consideration of H.R. 8, a bill that would permanently repeal the estate tax, has been postponed so that the chamber can consider disaster-relief legislation. Before recessing for the August district work period, Frist had indicated that a vote on permanent repeal of the estate tax would take place today, September 6. While it is unclear when a vote on permanent repeal will take place, a spokesman for the Majority Leader did indicate that Frist remains committed to bringing permanent repeal of the estate tax to the floor sometime this year.

Posted by Jennifer Lowe, 05:14:33 PM

Despite Katrina, Estate Tax Repeal Vote Goes Ahead
From BNA:

Senate leadership Sept. 2 tentatively planned to proceed with a long-planned agenda for its return from an August recess, despite pleas from top Democrats to put aside a scheduled vote on estate tax reform and instead tackle the aftermath of Hurricane Katrina.

Amy Call, spokeswoman for Senate Majority Bill Frist (R-Tenn.), told BNA Sept. 2 that, while the Senate intends to proceed as planned, Frist will interrupt any pending legislation whenever necessary to deal with Katrina.

"Our first priority is Hurricane Katrina," she said.

Frist filed for cloture on the motion to proceed to estate tax repeal legislation (H.R. 8) prior to the month-long recess.

When it reconvenes Sept. 6, the Senate will vote either on the motion to invoke cloture and proceed to H.R. 8 or on another motion to take up S. 147, a Native Hawaiians bill, according to an Aug. 1 notice from Senate Majority Whip Mitch McConnell's (R-Ky.) office.

Frist's plan to proceed with the vote on the issue brought claims of insensitivity from his Democratic counterpart, Senate Minority Leader Harry Reid (D-Nev.). "I am surprised at the Republican leadership's insensitivity toward the events of the last week," Reid said in a statement. "With thousands presumed dead after Hurricane Katrina and families uprooted all along the Gulf Coast, giving tax breaks to millionaires should be the last thing on the Senate's agenda."

He said the hurricane victims--"not the handful of millionaires repealing the estate tax will affect"--deserve the Senate's time. "I once again urge Senator Frist to reconsider his decision," he said.

Reid first appealed to Frist in a Sept. 1 letter to set aside the estate tax measure to permit the Senate to better address the crisis that has occurred in the wake of Katrina.

Senate Finance Committee ranking Democrat Max Baucus (Mont.), his party's lead negotiator on the issue, echoed Reid's sentiments, saying now is not the time to vote on such a measure.

"The nation is calling out for the Senate to act to help those in need," Baucus said. "We have passed an emergency spending bill, but the emergency has not subsided. People are still homeless. New Orleans is still buried in dark water. Our work is not finished."

"Instead of moving to the estate tax when the Senate is back in session, I encourage my colleagues to concentrate on the victims left in Hurricane Katrina's wake," he added.

Posted by Jennifer Lowe, 12:55:06 PM

Thursday, September 01, 2005

Assistance for Katrina - Donations to Nonprofits Pouring In
From The Center for American Progress:

IF YOU ASK, THEY WILL RESPOND: Shortly after the attacks of 9/11, Sen. John McCain complained, "After 9/11, people wanted to serve and they were told to go shopping or get on an airplane.... That's not the answer they wanted to hear. This is an opportunity to serve." Americans have demonstrated time and again that, in the face of tragedy, they will respond with true compassion. Already, the Red Cross has announced that it has collected $21 million in donations for the victims of Katrina, "a figure comparable to the response for tsunami victims following the devastation in Asia earlier this year." "The outpouring of support has been amazing," said Kara Bunte, a spokeswoman for the Red Cross. "People are now starting to see the images on TV and want to help." Americans also responded with amazing compassion in the two months following 9/11, providing approximately 1.6 million blood donations and contributing over $1.3 million to charities and relief agencies. Americans can and will do more to sacrifice; they simply need a president who will ask.

Posted by Jennifer Lowe, 01:06:43 PM

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