Public Policy Update - March 2024
Philanthropy Southeast regularly provides members with 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.
Donor Intent Legislation Moves Toward Passage in Georgia, Kentucky
Legislatures in two Southeastern states, Georgia and Kentucky, are moving toward passage of legislation aimed at making it easier for donors to enforce the terms of gifts given to universities and other entities. Both bills are similar to legislation passed in Kansas last year.
The bills would establish that charitable organizations that accept contributions pursuant to an endowment agreement must abide by the terms of the endowment agreement, and that a donor may bring a civil action against a charitable organization for violating such an agreement.
Donors would have four years to sue once they learn of a violation of an agreement. Donors would not be allowed to seek a return of their gift or financial damages, but a court could order the gift’s recipient to abide by the terms of the agreement.
The Kentucky legislation (SB 70) passed the state Senate on February 5 and is now being considered by the state House. The Georgia bill (SB 433) passed the state Senate on February 27 and passed out of a state House committee this week.
Similar legislation may be introduced in other states, either this year or in future sessions. We will continue to monitor these efforts – if you have questions or concerns about donor intent legislation in your state, please let us know. We are also considering future programming to educate members on this topic.
Biden Budget, Like Last Year’s, Proposes Changes for DAFs, Family Foundations
This week, the White House released its fiscal 2025 budget proposal – and just like last year’s proposal, it includes a few items related to philanthropy.
The administration has proposed disallowing private foundations from counting distributions to donor-advised funds (DAFs) toward their 5 percent minimum payout requirement unless funds are distributed from the DAF by the end of the following year. Interestingly, last year this same proposal was projected to raise $83 million over 10 years, but the Treasury Department now estimates it will raise $270 million over the same 10-year window.
The second provision is aimed at excluding payments to family members at family foundations from counting toward the mandatory 5 percent payout. Under current law, reasonable and necessary administrative expenses to further the charitable purpose of a foundation count toward the distribution requirement.
This year’s budget proposal does not address the charitable deduction, which Philanthropy Southeast and others in the sector have asked to be made available to all tax filers, including those who do not itemize their return.
The budget proposal is not binding, but it does create a baseline for budget and spending legislation in Congress while also reflecting the priorities of the administration and Biden’s re-election campaign.
Southeast Well-Represented at Foundations on the Hill
Philanthropy Southeast members from across the region came to Washington last month for Foundations on the Hill (FOTH), participating in more than 40 meetings with lawmakers and legislative staff.
While in Washington, foundation leaders urged lawmakers to support the Charitable Act (H.R. 3435/S. 566), which would reinstate the universal charitable deduction. Participants also emphasized the critical role that philanthropy plays in communities across the region and its ability to serve as a resource and partner by providing connections, research and more.
Did you attend FOTH? If you haven't already, now is a great time to reach you to those you met with, thank them for their time, and renew your request to support the Charitable Act!
Below, we’ve shared a few photos from this year’s Foundations on the Hill. Keep reading for a personal reflection from Susan DeVenny, president and CEO of the Arras Foundation and a member of Philanthropy Southeast’s Public Policy Committee.
What 25 Years of Advocacy Has Taught Me
By Susan DeVenny (Arras Foundation)
Last month, a team of South Carolina philanthropists visited Capitol Hill with foundation leaders from across the country.
Our goal? To talk to members of Congress en masse about the impact of American philanthropy, highlighting the results of strong, public-private partnerships at home.
During a busy week of budget negotiation in DC, staff and members talked with us about the needs of our communities and plumbed new data around charitable giving. Our team talked about the nimbleness of the nonprofit sector, the value of multi-sector partnerships, and important tools to encourage charitable giving in tax law. Measured by numbers of office visits, cups of coffee, and thoughtful dialogue, Foundations on the Hill 2024 was a success.
More than just Spring visits, however, strong relationships with elected leaders are built by sharing information all year long.
Advocacy “fly-ins” (like statehouse visits in Columbia, or town and county council meetings across the Palmetto State) help us stay visible and connected to decision-makers, draw attention to pressing issues, and can build momentum toward common goals. Our elected leaders depend on information year-round from staff, constituents, and thought leaders in order to govern with excellence every day.
Advocacy is essentially lifting your voice in support of causes that matter to you in your daily walk. For me, those issues have been public education; the needs of young children, families, and caregivers; and philanthropy. Over my quarter century of advocacy in these areas, I’ve learned a few key lessons.
1. Know your audience. Do your research before visiting with your elected leader, learning his or her background, and familiarizing yourself with key staff. Prepare succinct remarks and plan a few key questions that highlight the intersection of your cause and the elected leader’s interests or experience. A key data point or story can make an effective connection; be sure to use both in your materials. Note what “sparks” deeper conversation with the elected leader or staff, and follow up with any promised information.
2. Seek common ground. Data and stories of impact make a compelling case for your cause. Your research ahead of visits will help you showcase information in a framework that builds shared knowledge between you and your elected leaders. More than “talking” or “telling,” I have found that strong advocacy is based around listening. Hearing what is important to elected leaders will help you find intersection points.
3. Build the relationship. More than anything else, good advocacy is centered in relationship. Your time and interaction with elected leaders and staff over time builds a currency of thoughtful, reliable connection. Our representatives depend on relationships based in truth, trust, and lived experience. Be the person they think about calling when your cause is in the forefront by being a good resource over the years.
At a time when voices are often loud, discordant, and polarization is the norm, our recent time on Capitol Hill was a reminder that conversation centered in community can build toward our common goal: a bright future for all.
This item was originally published by Together SC.
IRS Hearing on Proposed DAF Regulations Scheduled for May
The IRS and Treasury Department have scheduled a public hearing on May 6 on proposed DAF regulations that provide definitions for DAFs, donors, distributions, and other key terms. The hearing will allow Treasury and IRS officials the opportunity to hear testimony from stakeholders and interested parties.
Proposed regulations have elicited over 150 comments from stakeholders, with the vast majority expressing concerns about the potential chilling effect the proposed regulations could have on charitable giving through DAFs. Other objections were raised regarding the broad scope of the proposed definitions, the absence of a transition period and the inclusion of personal investment advisors in the definition of donor advisors.
Those interested in providing oral testimony in person or via telephone during the public hearing will need to submit an outline of their speaking topics by April 5 – view the hearing notice for more details and exact instructions.
