House Committee Weighs Nonprofit Public Value
Today, the U.S. House oversight committee on Ways and Means held the first in a series of hearings regarding tax-exempt organizations. The witnesses included nonprofit leaders, scholars, and representatives of hospitals and higher education groups. Throughout the questioning and testimony, some members of Congress and policy experts discussed whether the basis for tax exemption and eligibility for charitable contributions should be re-examined, based on how much community benefit organizations are producing. While related legislation has not yet been offered, these hearings will set the stage for a frenzy of end-of-year tax policies that will likely be debated following the November elections and prior to the close of the calendar year. Please stay tuned as the League keeps you informed of advocacy opportunities and, in the meantime, make use of the Public Value Toolkit available to member orchestras.
The Year Ahead and the President’s New Budget Proposal
Washington, D.C. -Yesterday the President announced his newest budget plan, which seeks to meet the mandate of deficit reduction through a combination of strategic revenue measures and funding allocations. Below are the highlights of the tax and spending policies that impact orchestras and the broader arts and nonprofit communities. While the many distractions of the election cycle will slow - if not altogether thwart – progress on major budget decisions and tax reform, the President’s budget request sets the tone for the Congressional action to come.
As the coming months unfold, Congress will take action on numerous policies impacting orchestras – your advocacy will be essential! Whether it’s wireless microphone policies, artist visa issues, or major tax and spending decisions, the League has prepared advocacy materials to make it easy for you to make your voice heard, in partnership with the extended arts and nonprofit communities. Please visit our advocacy center and weigh in on the full range of policy issues that impact your orchestra. Now is the time to develop a dialogue with your members of Congress. As always, we will keep you posted about key policy developments.
Act Now to Restore IRA Rollover
Washington, D.C. - At the end of 2011, an important charitable giving incentive – the IRA Rollover – expired amidst congressional wrangling over budget priorities. In advance of a Senate hearing earlier this week on a number of expired tax provisions, Finance Committee Chairman Max Baucus (D-MT) vowed "to find a bipartisan path forward," adding that "it is critical to extend these tax provisions early in the year to maximize their effect and provide certainty for the 2012 tax year."
As Congress attempts to come to agreement on various tax proposals with many moving parts, please speak up now to ensure that the final product will include a provision to reinstate the IRA Charitable Rollover.
The IRA Charitable Rollover provision has spurred new and increased giving to orchestras and thousands of other nonprofit organizations, supporting the valuable public benefits nonprofits share with their communities. On December 31, 2011, the IRA Charitable Rollover expired along with a number of other tax provisions. The IRA Rollover allowed donors 70 1/2 and older to make up to $100,000 in charitable contributions directly from their individual retirement accounts (IRA), without paying taxes on the withdrawal.
Please CONTACT CONGRESS TODAY to ask for immediate restoration of this important charitable giving incentive. The League has prepared an easy-to-use advocacy tool, linked below. Please be sure to personalize the sample message with information about how contributions to your orchestra benefit your community. Thank you!
CONTACT YOUR MEMBERS OF CONGRESS TODAY!
Charitable Giving Update: 'Tis the Season
December 1, 2011, Washington, D.C. - A recent survey by Charity Navigator found that gifts made from Thanksgiving to New Years account for, on average, 41% of annual charitable giving received by responding nonprofit organizations. As the League continues to be your advocate in Washington in defense of charitable giving incentives, please take note of the following quick updates:
The IRA Charitable Rollover remains in effect until December 31, 2011! Be sure your donors know that if they are 70 ½ or older they can transfer up to $100,000 of tax-free gifts directly from their IRAs. This has proven to be a significant incentive for donors to make new and increased contributions to orchestras. The IRA Rollover has come and gone in recent years, leaving many donors confused about its availability. Please share more information about the IRA Rollover with any potential donors. Orchestras have joined the broader nonprofit community in calling on Congress to extend the IRA rollover beyond 2011.
Threats to Charitable Giving Incentives will continue into 2012 at the state and federal levels. After the deficit reduction Super-Committee failed to accomplish its task, proposals to curtail federal tax incentives for charitable giving will likely remain on the table as the tax committees in Congress determine next steps for increasing federal revenue.
Funding for the National Endowment for the Arts will be particularly vulnerable as Congress wrestles with spending decisions in the coming months. The NEA has just announced the first round of FY12 grants and, in anticipation of potential budget cuts, is already contemplating smaller and fewer grants to organizations in FY13. These grants are key to directly supporting orchestras and stimulating private contributions. Please continue to raise your voice in response to League policy action alerts. The League’s capacity to represent your interests before Congress and the White House is completely dependent on your participation and communication with your elected officials. Stay tuned for further League policy updates.
Weigh in Now on Charitable Giving Incentives
Washington, D.C. - Orchestras have sent more than 1,000 messages to
Congress urging policymakers to protect incentives for charitable giving
as the debate over deficit reduction moves ahead. Have you made your
voice heard? In just one week, the deficit reduction "SuperCommittee" is
set to issue recommendations for increasing revenue and decreasing
federal spending over the course of the next 10 years. Several proposals
to limit tax incentives for charitable giving have been on the table in
the final negotiations.
Tell Congress that:
Contact Congress: The League has set up an e-advocacy campaign
with a sample letter to Congress, talking points, and complete
background on this pivotal policy issue. Please contact your members of
Congress today to let them know how your orchestra serves the public and
how essential charitable giving is to that work. Be sure to personalize
your message with details about your orchestra. Policymakers have been
surprised to learn that orchestras count on private contributions for
roughly 40% of the revenue that enables them to serve communities
through music.
CONTACT CONGRESS TODAY!
The League is highly engaged in advocacy in Washington, D.C. as the
nonprofit community responds to proposals to change the deductibility of
charitable giving. As we’ve reported to you, Congress has been debating
a proposal by President Obama to cap the deductibility of gifts at 28%.
While leaders on the Hill indicate that the President’s proposal is off
the table for the time being, a wide range of possible changes to the
deductibility of giving are still being considered as Congress debates
budget priorities and broader tax reform. It is essential that
orchestras continue to speak up in defense of tax incentives for
charitable giving, and in support of the considerable public value
orchestras offer to communities as tax exempt organizations.
Just this week, the Senate Finance Committee held a hearing addressing a
broad array of tax reform proposals. In advance of the hearing, four
representatives of orchestras traveled to Washington, D.C.
to meet in key offices on the Hill to share personal stories of the
value of charitable giving in support of orchestral activity. Our thanks
to the following for their extraordinary advocacy: Richard Dare, CEO
& Managing Director of the Brooklyn Philharmonic; David Gross,
President of the West Virginia Symphony Orchestra; Bob Wagner, Principal
Bassoonist for the New Jersey Symphony Orchestra; and, Cathy Weiskel,
Executive Director of the Boston Youth Symphony Orchestras. During this
week’s hearing, Ranking Senator Orin Hatch (R-UT) voiced his support for
the unique public value of the nonprofit arts and urged his colleagues
to resist changes to the tax deductibility of gifts.
Thank you all for doing your part. Orchestras have sent more than one thousand letters
to the Hill in support of preserving tax incentives for charitable
giving. Please continue to make your voice heard by meeting with your
members of Congress when they are in their home state and districts, using our e-advocacy center to send customizable messages, and responding when League staff in D.C. contact you for your help.
In addition to contacting policymakers directly, it is critically
important that orchestras participate in the combined efforts of the
broader nonprofit community. Please take two minutes to sign onto a
letter in support of protecting nonprofits from potential declines in
charitable giving, hosted by the National Council of Nonprofits. Add your voice
to those of other nonprofits in your state urging Congress to use
caution in considering any modification to incentives for charitable
giving.
Charitable Giving Incentives and Nonprofit Jobs at Stake
Washington, D.C. - Your advocacy is needed NOW to help defend
charitable giving incentives. As Congress considers the President's jobs
plan and wrangles over how to generate revenue to meet new debt limit
requirements, proposals to curtail the income tax deduction for gifts to 501(c)(3) organizations are in play.
The President has proposed limiting deductibility for charitable gifts
to 28% for higher income tax payers, which could reduce charitable
giving by as much as $7 billion per year. This proposal was included in
the Obama FY12 budget proposal and is also included in the jobs package
released yesterday.
Tell Congress that the nonprofit community represents a major segment
of the workforce (1 in 10 workers) and is essential to strengthening
the vitality of communities nationwide. Reducing charitable giving
incentives would weaken the charitable sector at a time when nonprofit
jobs and services are needed most.
Contact Congress: The League has set up an e-advocacy campaign
with a sample letter to Congress, talking points, and complete
background on this pivotal policy issue. Please contact your members of
Congress today to let them know how your orchestra serves the public,
and how essential charitable giving is to that work. Be sure to
personalize your message with details about your orchestra. Policymakers
have been surprised to learn that orchestras count on private
contributions for roughly 40% of the revenue that enables them to serve
communities through music.
CONTACT CONGRESS TODAY!
Orchestras rely on private contributions for roughly 40% of the revenue
that enables them to serve their communities. As pressure intensifies on
Congress and the White House to address the debt limit, lawmakers say
everything is on the table. This week, the Gang of Six policy
negotiators announced that unspecified changes to the deductibility of
charitable contributions are potentially in play.
The League is taking a proactive role, in strategic partnerships with
the broader nonprofit sector, to defend and strengthen tax incentives
for charitable giving. In addition to targeted meetings with lawmakers
on Capitol Hill, the League added its name to a nonprofit letter to the
White House and a recent letter to Congress , urging policy leaders to
support the vital work of the nonprofit sector by preserving tax
incentives for contributions. For complete information, see the League’s
online tax policy action center.
Tax and Deficit Debates Endanger Charitable Giving Incentives
Washington, D.C. - As the momentum for tax reform and deficit reduction increases, Congress
is considering proposals to curtail or eliminate the income tax
deduction for gifts to 501(c)(3) organizations, including the nonprofit
arts. Congress must fully understand the impact on charitable giving
before taking action, and should protect giving incentives that support
the valuable community services provided by the full range of nonprofit
organizations.
1. Contact Congress: The League has set up an e-advocacy campaign
with a sample letter to Congress, talking points, and complete
background on this pivotal policy issue. Please contact your members of
Congress today to let them know how your orchestra serves the public,
and how essential charitable giving is to that work. Be sure to
personalize your message with details about your orchestra. Policymakers
have been surprised to learn that orchestras count on contributions for roughly 40% of the revenue that enables them to serve communities through music.
CONTACT CONGRESS TODAY!
2. Invite Elected Officials to See Your Orchestra in Action: Check our Congressional Recess Calendar
to learn when your members of Congress are likely to be home, and
invite them to see your programs in action. No form of advocacy is as
effective as providing policymakers with the opportunity to experience
firsthand the community benefit your orchestra provides.
3. Keep Us Informed: The League is directly representing
orchestras in key meetings on Capitol Hill, in close partnership with
the broader nonprofit and philanthropic community. Please be in touch to
tell us about your interactions with members of Congress.
Congress Reinstates IRA Rollover for 2010 and 2011
Just after midnight last night, a top policy priority for orchestras and
the broader nonprofit community met with success! Congress has approved
a broad tax package that includes reinstatement of the IRA Charitable
Rollover giving incentive. This giving incentive is retroactively
reinstated for gifts made during 2010, and extended throughout 2011.
Also, gifts made by January 31, 2011 may be recognized as 2010 gifts for
tax purposes.
On December 31, 2009, the IRA Charitable Rollover expired along with a
number of other tax provisions. Be sure to inform donors that this
important charitable giving incentive is once again available. The
IRA Rollover allows donors 70 1/2 and older to make up to $100,000 in
charitable contributions directly from their individual retirement
accounts (IRA), without paying federal taxes on the withdrawal. This has
proven to be an important giving incentive, resulting in new and
increased charitable giving to orchestras and the full range of
nonprofit organizations.
IRA Charitable Rollover - Highlights
Learn
More About the IRA Charitable Rollover
Weigh in Now to Restore IRA Rollover
Congress is attempting to come to agreement this week on a broad tax
package with many moving parts. Speak up now to ensure that the final
product will include a provision to reinstate the IRA Charitable
Rollover.
As the quotes from orchestras below demonstrate, the IRA Charitable
Rollover provision has spurred new and increased giving to orchestras
and thousands of other nonprofit organizations, supporting the valuable
public benefits nonprofits share with their communities:
“One donor increased his annual gift by 10 times the usual amount,
due to the IRA Rollover Provision. Others are just getting used to the
possibilities the IRA Rollover provides.”
“I have personally seen the Rollover encourage larger gifts on the
part of many generous individuals.”
“We depend on charitable gifts for approximately two-thirds of our
annual revenue …The IRA Rollover has been instrumental in contributing
to this needed support every year since it began, and this year resulted
in the largest single gift ever to our orchestra.”
On December 31, 2009, the IRA
Charitable Rollover expired along with a number of other tax
provisions. The IRA Rollover allowed donors 70 1/2 and older to make up
to $100,000 in charitable contributions directly from their individual
retirement accounts (IRA), without paying taxes on the withdrawal.
Please CONTACT CONGRESS TODAY to ask for immediate restoration of this
important charitable giving incentive. The League has prepared an
easy-to-use advocacy tool, linked below. Please be sure to personalize
the sample message with information about how contributions to your
orchestra benefit your community. Thank you!
Contact
Your Members of Congress Today!
Stay Tuned for the Results
The League will keep you posted about the outcome of Congressional
action. The most recent version of the IRA Charitable Rollover proposal
under consideration would reinstate this giving incentive for 2010 and
extend it through 2011. Additionally, IRA Rollover charitable
contributions made throughout January 2011 would be recognized as 2010
gifts for tax purposes. We will keep you posted on final action so that
your orchestra can inform donors.
Sign up to Support Nonprofit Sector Legislation
The League of American Orchestras is a proud early supporter of the Nonprofit Sector and Community Solutions Act, a bill introduced in the U.S. House of Representatives in June. This landmark legislation would strengthen America's communities by making the federal government a more productive partner with nonprofit organizations by establishing 1) better communication with the federal government, 2) better coordination within government, and 3) enhanced data collection and research. Please join us today in showing your support for the Nonprofit Sector and Community Solutions Act by adding your organization's name to the list of nonprofit supporters. Further information about this effort is available from the National Council of Nonprofits.
Spotlight turns to Form 990 Compliance
Nonprofit organizations that fail to file the required IRS Form 990 for three consecutive years face potential revocation of tax-exempt status. As 2010 is the first year in which this penalty may be applied to organizations failing to comply, a great deal of media attention has turned to smaller-budget nonprofits that may have unwittingly put their status in jeopardy. The IRS has begun an initiative to help those organizations come into compliance and to better inform the nonprofit community of the Form 990 filing requirements. A helpful overview about how to file is available from Independent Sector, and a comprehensive webinar about completing the Form 990 is available from the League.
On June 25, President Obama signed into law temporary pension funding
relief as part of a comprehensive package addressing medicare benefits.
Following are the pension relief provisions included in the new law:
The law provides pension funding relief for single- and multi-employer
defined benefit pension plans by giving them more time to absorb losses
attributable to the market downturn and ensuing economic slow-down.
Single Employer Plans
Employers would be given two options to spread out their statutory
pension funding obligations.
Multi-Employer Plans
The League joined a broad range of national nonprofit organizations calling for pension funding relief, urging Congress to enact legislation that would allow sponsors of defined benefit pension plans to recoup the shortfall for 2008 over a longer, more manageable period than allowed under the Pension Protection Act. The new funding relief provision is considered by most to be a step in the right direction, but not a complete resolution to the pension funding crisis.
New Rules for Independent Contractor Status Considered by States and Feds
Orchestras that classify musicians or staff as independent contractors should be aware of newly-emerging federal and state efforts to enforce and revise worker classification requirements. In an effort to increase payroll tax revenue (by as much as $7 billion over ten years), President Obama and Congressional leaders are proposing new rules that could effectively re-classify some current independent contractors as employees.
President Obama’s FY11 budget request for the IRS and Department of Labor would add 100 new staff positions dedicated to enforcing worker classification rules, and would create competitive grants to states to address misclassification. In addition to requesting funding from Congress, the Administration is proposing legislation that would enable the IRS to write new rules and regulations regarding classifying workers, and would change the 1978 tax law to:
Implementing these changes would require legislative action by Congress.
Similar proposals have been introduced in the U.S. House and Senate,
but have not yet been taken up for consideration. Given the
Administration’s focus on this - and the attractiveness of
revenue-raisers in the context of the national budget deficit - the
issue could gain traction this year. Meanwhile, the IRS and several
states (including Maryland, Delaware, and Colorado) are stepping up
audit and enforcement efforts under the current rules.
The League will keep you informed as the policy discussion moves ahead.
In the meantime, any orchestra with questions regarding how to classify
workers can consult the IRS website for guidance regarding the current
rules. Note that businesses and the IRS alike agree that the current
guidance for classifying workers is murky, at best. As such, any
specific questions regarding classification should be addressed to
qualified legal counsel.
President Sign Jobs Tax Relief
Yesterday, President Obama signed the Hiring Incentives to Restore
Employment (HIRE) Act, a $17.6 billion bill which includes important
payroll tax incentives for nonprofits to hire new workers. The tax
provision exempts employers from paying a 6.2% share of Social Security
payroll tax on each individual hired after February 3, 2010 who was
unemployed for at least 60 days and who does not exceed the $106,800
social security wage base. The exemption applies to wages paid after
March 18, 2010 and before January 1, 2011. Employers can save up to
$6,622 per qualifying worker.
Further details are available from the IRS here.
If your orchestra runs a defined benefit pension plan or participates
in the AFM multi-employer plan, please read on for important news
regarding potential pension funding relief.
Yesterday, the U.S. Senate passed pension funding relief as part of a
comprehensive jobs package. The overall bill now moves on to the House
for final consideration. The League will keep you posted as the overall
measure is finalized. In the meantime, following are the pension
relief provisions included in the bill:
The bill would provide pension funding relief for single- and
multi-employer defined benefit pension plans by giving them more time to
absorb losses attributable to the 2008 market downturn and ensuing
economic slow-down.
Single Employer Plans
Employers would be given two options to spread out their statutory
pension funding obligations.
Multi-Employer Plans
The League has joined a broad range of national nonprofit organizations
calling for pension funding relief, urging Congress to enact legislation
that would allow sponsors of defined benefit pension plans to recoup
the shortfall for 2008 over a longer, more manageable period than
allowed under the Pension Protection Act.
The League will keep you posted as these pension relief provisions move
ahead.
Your Voice - Their Vote. Weigh in Now to Restore IRA Rollover
“One donor increased his annual gift by 10 times the usual amount,
due to the IRA Rollover Provision. Others are just getting used to the
possibilities the IRA Rollover provides.”
“I have personally seen the Rollover encourage larger gifts on the part of many generous individuals.”
“We depend on charitable gifts for approximately two-thirds of our
annual revenue …The IRA Rollover has been instrumental in contributing
to this needed support every year since it began, and this year
resulted in the largest single gift ever to our orchestra.”
This week, Congress will vote on whether to reinstate the IRA
Charitable Rollover provision. Add your voice to the hundreds of other
messages orchestras have sent to Congress demonstrating how the IRA
Charitable Rollover provision spurred new and increased giving to
orchestras and thousands of other nonprofit organizations.
On December 31, 2009, the IRA Charitable Rollover
expired along with a number of other tax provisions, removing an
important charitable giving incentive when it is needed most. In this
tough economy, every incentive for charitable giving is essential. The
IRA Rollover allowed donors to make charitable contributions directly
from their retirement accounts, without paying taxes on the
withdrawal.
Please CONTACT CONGRESS TODAY to ask for immediate restoration of this
important charitable giving incentive. The Senate is scheduled to vote
this week on reinstating and extending a number of expired tax
provisions, including the IRA Charitable Rollover. Even if you have
spoken up before, PLEASE WEIGH IN AGAIN as Congress makes key decisions
about the next wave of legislation aimed to boost economic activity.
The League has prepared an easy-to-use advocacy tool for your use,
linked below. Please be sure to personalize the sample message with
information about your orchestra. Thank you!
Contact Your Members of Congress Today!
IRA Rollover Expires
On December 31st, the IRA Charitable Rollover
expired along with a number of other tax provisions. The IRA Rollover
allowed donors to make charitable contributions directly from their
retirement accounts, without paying taxes on the withdrawal, and has
proven to be an important incentive for new and increased donations to
orchestras. The League and the broader nonprofit community are asking
Congress to restore the IRA Rollover immediately and make the provision
retroactive to gifts made beginning January 1. Thanks to the many
orchestras who spoke up at the end of 2009 - please keep those emails
to Congress coming. The most effective communications to the Hill
include specific information about how the IRA Rollover has increased
giving to your orchestra, and how those resources help you serve your
community. The League will keep you posted on progress on this issue so
that you, in turn, can communicate with your donors.
Weigh in to Restore the IRA Rollover
All Eyes on Senate as Tax and Health Care Measures Await Action
Washington, D.C. - As the clock ticks down to the
holidays, two measures of concern to orchestras and the broader
nonprofit community await action.
The health care reform bill under debate in the Senate includes a
provision that would provide relief to small businesses, including
nonprofit organizations. The League and orchestras have weighed in with Congress
to urge that nonprofits will be eligible for any incentives or relief
for employers providing health insurance coverage. Senate leaders
expect to vote on their bill by Christmas Eve.
Several tax provisions are set to expire December 31, including the IRA
Charitable Rollover, an important incentive to charitable giving. The
IRA Rollover allows donors to make a charitable gift directly from an
IRA without the amount being subject to tax. If the provision is not
extended by the year's end, it may be reinstated in 2010. The League
and orchestras are calling on Congress to take immediate action to
ensure that donors can make uninterrupted use of the IRA Charitable Rollover.
The House passed an extension of the IRA Rollover on December 9. Senate
action is uncertain as the health care debate remains center stage.
Act TODAY to Extend the IRA Charitable Rollover
Washington, D.C. - Please contact your members of Congress
TODAY! An important incentive to charitable giving is in jeopardy as
2009 quickly comes to a close. If Congress does not act before the end
of this year, the IRA Charitable Rollover provision will expire on
December 31. The IRA Rollover spurs new and increased giving to orchestras and thousands of other nonprofit organizations.
The House is scheduled to vote Wednesday, December 9 on extending a
number of tax provisions. It is essential that your member of the House
and Senators hear from you before Wednesday. Once the House completes
action, the Senate will need to move rapidly to clear the extension
before the IRA Rollover expires.
In this tough economy, every incentive for charitable giving is
essential to supporting America’s nonprofit community. More than 30% of
financial support for orchestras is derived from charitable giving.
Without this support, public access to the arts would be greatly
diminished. The IRA Rollover provision, which allows donors to make
tax-free charitable contributions directly from their Individual
Retirement Accounts (IRA), was enacted in August 2006, expired in
December 2007, and was reinstated in 2008.
The League has prepared an easy-to-use advocacy tool for your use,
linked below. Please be sure to personalize the sample message with
information about your orchestra. Thank you!
Contact Your Members of Congress Today!
Support Relief for Nonprofits in Health Care Legislation!
Washington, D.C. - Please add your voice as the nonprofit
community - the nation's fourth largest workforce, employing more than
13 million workers - asks Congress to provide the same credits and
subsidies for health care coverage as are being offered to the
for-profit business community.
In a recent survey by the Nonprofit Listening Post,
a full third of responding orchestras that provide health insurance
said the increasing cost is one of their organizations' top challenges.
Among orchestras that do not provide health insurance, the high cost of
premiums was the most significant prohibiting factor. These results are
consistent across nonprofit employers.
This week, the House will begin debating its health care reform bill,
while the Senate works to combine multiple reform proposals into a
single bill.
Please contact your members of Congress and ask that health care reform
provides nonprofit employers relief and incentives comparable to their
for-profit counterparts.
While the League has not taken a position on other aspects of health
care reform proposals under debate, we fully support improving our
nation's health care system.
Contact Congress Today!
Tax Incentives Get Nod from Congress
Congress has just wrapped up its
budget resolution - the nonbinding blueprint for how it will allocate
federal resources. The broad outline includes some positive signs of
support for measures that will help to stabilize and increase
charitable contributions to orchestras and others in the nonprofit
community. The resolution calls for a two-year extension of the IRA Charitable Rollover provision,
which will expire at the end of 2009 if Congress does not act.
Orchestra advocacy in 2008 on behalf of this giving incentive helped
lead to its temporary reinstatement.
The Congressional budget plan further signaled support for charitable
giving incentives by omitting a proposal by President Obama that would
offset the costs of health care reform by capping at 28% the
deductibility of contributions by families earning more than $250,000.
While these are early signs of Congressional support for charitable
giving, the pressure is on in Washington to find resources to fund the
shared priorities of Congress and the Administration (such as health
care, education, and energy). The League will keep you informed as the
debate moves ahead.
Read More About Tax Issues
March 13, 2009
Nonprofits Fear Cap on Deduction
President Obama's FY10 budget blueprint includes a proposal to cap at 28% the deductibility of contributions by families earning more than $250,000, to offset the costs of health care reform. The Obama proposal has come under public scrutiny in the press, key leaders on the Hill have indicated that they would oppose the limit, and members of the nonprofit community have objected to the policy, as it could potentially inhibit incentives to charitable giving. The Administration has recently indicated that it may be willing to seek other options to fund health care reform. The League is concerned that the cap on charitable deductions may negatively impact giving to orchestras. We are working in partnership with our nonprofit peers to address these concerns and will keep you posted on these policy developments.
See the League's Charitable Giving Issue Brief
Ready for the New Form 990?
Washington, D.C. - As reported earlier this year, the Internal Revenue Service is requiring nonprofit organizations to file a new version of the Form 990 to report on FY08 activity. On Wednesday, November 19, 2008 the League will be hosting a webinar for orchestra executive directors, finance professionals, and board chairs preparing to adapt to the new Form.
Congress Approves IRA Rollover Extension
Washington, D.C. - In the last few hours remaining before
Congress adjourns, a top policy priority for orchestras and the broader
nonprofit community has met with success! Today, Congress approved a
two-year extension of the IRA Charitable Rollover provision. Over the
past week, orchestras sent nearly 500 messages to Congress urging
support for the measure, using the League's new advocacy technology.
The IRA Rollover was included in the Emergency Economic Stabilization
Act passed by Congress and is now headed to the White House for the
President's signature.
Find Complete Background and Details
Last Chance to Speak Up for IRA Rollover!
Washington, D.C. - Congress is on the verge of adjourning, and it is debating whether to pass a package of tax extenders that would include the IRA Rollover. Orchestras have received increased and new donations as a result of the IRA Charitable Rollover. Your advocacy can help convince Congress to reinstate this important measure. The provision, which allowed donors to make tax-free charitable contributions directly from their Individual Retirement Accounts (IRA), was enacted in August 2006, but expired in December 2007. While legislation reinstating the IRA Rollover has broad bipartisan support, there is a tiny window of opportunity for passage this year. Your advocacy is needed to ensure that Congress makes this issue a priority during this short, election-year legislative session.
Take Action by Emailing Your Orchestra's Elected Officials
APRIL 22, 2008
IRA Rollover Gains Momentum!
Momentum is building in support of the IRA Rollover, which expired in December 2007. On April 17, a package of tax-related measures was introduced in the Senate, including a provision reinstating the IRA Rollover. The Senate also supported the IRA Rollover in its budget resolution, and the President included it in his budget request.
Reinstating the IRA Charitable Rollover will increase donations to the nation's nonprofit community. The IRA Rollover was enacted as part of the Pension Protection Act of 2006 and permitted donors age 70 ½ and older to make tax-free charitable donations directly from their IRAs, up to an annual ceiling of $100,000. There is a small window of opportunity for passage this year and your advocacy is needed to ensure that Congress makes this issue a priority during this short, election-year legislative session.
IRS Revises Form 990
The form used by nonprofits to annually report to the Internal
Revenue Service (IRS) has undergone significant revisions. Beginning in May 2009, organizations with gross annual
receipts over $1 million or total assets over $2.5 million will be
required to file the new Form 990 to report on FY08 activity. The
transition for smaller-budget organizations will be phased in more
gradually. The League filed comments
to the IRS as the Form 990 was re-designed. The final Form 990
reflects some improvements over previous drafts, eliminating
potentially misleading percentage-based summaries and gradually
increasing the threshold for organizations that can file the Form 990N
e-postcard.
As Congress wraps up work for 2007, it has still neglected to
address the extension of the IRA Charitable Rollover Provision. The
provision, which allows individuals aged 70 ½ and older to make
charitable gifts from their IRAs tax-free up to a total of $100,000 per
year, is set to expire December 31, 2007 -- just over one year after
its enactment. Congress may take up a tax bill early in 2008,
providing an opportunity to revive this important giving incentive. Thank you for weighing in on this important issue and please stay tuned for further updates.
Find More on Tax Policy
The IRA Charitable Rollover provision is set to expire December 31, and has been caught in the middle of a political tug of war as the House and Senate debate a broad tax package. Whether you are an orchestra professional or donor (or both!), please contact your members of Congress and urge them to extend this important charitable giving incentive. The clock is ticking!
Take Action Now
Set to expire on December 31st, the IRA Charitable Rollover provision is caught in the middle of a political tug of war as the House and Senate debate a broad tax package. The provision, which allows individuals aged 70 ½ and older to make charitable gifts from their IRAs tax-free up to a total of $100,000 per year, was enacted in August 2006 and has already proved to spur new charitable gifts to orchestras and other nonprofit organizations. A one-year extension of the IRA rollover has broad congressional support and is included in a larger package of popular tax relief extenders that would also include a fix to the controversial Alternative Minimum Tax. As the clock ticks away, the House and Senate are in a showdown over how to pay for the overall tax package.
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Congressional hearings are calling into question the public benefits provided by the diverse range of organizations that make up the nation's charitable sector. The House Ways and Means Oversight subcommittee held a September hearing examining how nonprofits serve the needs of diverse communities. Meanwhile, Senate discussions have probed how higher education and hospitals provide community benefits and devote resources to people in need. Conversations at the national level are being echoed as some states and localities under financial strain reconsider tax benefits for nonprofits. On October 9, the League collaborated with the America Arts Alliance to submit testimony to the House Ways and Means committee, advocating for the unique benefits provided by nonprofit performing arts organizations sustaining vibrant communities across the country.
As the IRS contemplates major changes to the way nonprofit organizations report activity on the Form 990, the League and the broader nonprofit sector have weighed in. While the IRS hopes the new Form will enhance transparency, promote tax compliance, and minimize the burden on filing organizations, certain proposed revisions have raised concerns. In comments to the IRS on behalf of orchestras, the League asks the IRS to:
In addition to these orchestra-specific comments, the League participated in discussions regarding the comprehensive comments filed by Independent Sector
on behalf of the broader nonprofit and philanthropic community. While
the IRS proposes implementing a new form for fiscal year 2008 activity,
nonprofits are strongly urging the Service to delay implementing the
new Form until fiscal year 2009.
Read League Comments