Public Policy Update - March 2023
Each month, Philanthropy Southeast provides members with monthly updates on the latest public policy developments in Washington and state capitols around the region, analyzing their possible impact on the charitable sector. If you would like to see an issue featured in a future Public Policy Update, contact Jaci Bertrand, Philanthropy Southeast's vice president of member engagement, at jaci@philanthropysoutheast.org.
Foundations on the Hill 2023 Brings Dozens of Philanthropy Southeast Members to Washington
Last month, Philanthropy Southeast members from nine states connected with policymakers in Washington during Foundations on the Hill, returning in-person for the first time since 2020.
During meetings with lawmakers and staff, foundations leaders made the case for policies that would boost the charitable sector’s ability to address critical community needs. Philanthropy Southeast members also discussed policy issues critical to their organizations’ missions and emphasized philanthropy’s ability to serve as a partner and resource throughout the year.
Before Capitol Hill meetings, attendees experienced a day of programming featuring policy experts. The Philanthropy Southeast delegation also enjoyed each other’s company during an evening reception and dinner at the Monocle restaurant, a favorite of many lawmakers and FOTH attendees alike.
One of the sectors key policy priorities, the return of the universal charitable deduction, received a big boost during FOTH when by Sens. Christopher Coons (D-Delaware) and Cory Lankford (R-Oklahoma) introduced the Charitable Act, which would provide those who do not itemize their return a charitable deduction up to one-third of the standard deduction (around $4,500 for an individual filer and around $9,000 for married joint filers).
A limited version of the universal charitable deduction was established by pandemic-relief legislation and was available in the 2020 and 2021 tax years.
The Charitable Act will continue to be a legislative priority for Philanthropy Southeast and the broader sector throughout this year – keep an eye out for opportunities to contact lawmakers and urge them to support this important bill!
Biden Budget Includes Provisions Affecting Foundations and Donor-Advised Funds
President Biden’s fiscal 2024 budget proposal, released earlier this month, contains two provisions aimed at foundations and donor-advised funds.
First is a repeat provision from last year’s budget, which would prohibit private foundations from counting distributions to donor-advised funds toward their 5 percent minimum payout requirement, unless funds are distributed from the DAF by the end of the following year. In 2017, the Treasury Department issued a notice that signaled their intent to regulate in this space, but proposed regulations have not been released.
A new addition is a provision aimed at excluding payments to family members at a family foundation from counting toward the mandatory 5 percent payout.
Both provisions were included in the Accelerating Charitable Efforts (ACE) Act, a philanthropic reform bill that was introduced in the 117th Congress. While that bill failed to make much progress, the inclusion of parts of it in the budget could indicate momentum for ACE Act proponents.
While the president’s budget proposal helps provide a baseline for negotiations with Congress, it carries no legal weight on its own. With Republicans in charge of the House, it is difficult to predict what provisions affecting the charitable sector, if any, will be included in any legislation that is passed into law.
As this year’s budget negotiations continue, we will keep you informed of any provisions that could affect the work of foundations or key philanthropic priorities.
