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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.

IRS, Treasury Department Release Proposed Regulations on DAF Distributions

This week, the IRS and Treasury Department released proposed regulations tied to taxable distributions from donor-advised funds. The release kicks off a 60-day period where members of the public can comment on the proposal.

The proposed regulations are years in the making: They were largely written based on comments received in 2006 and 2007 around definitions of DAFs, distributions, investments and disqualified persons. They also referenced some comments from a 2017 Notice, though the issues outlined in the 2017 notice, including pledges and bifurcation, the public support test, and private foundation use of DAFs, are not addressed in this rule.

While we are still analyzing the full notice, here are a few things worth noting:

• Disqualified persons: There are certain taxable distributions from DAFs that would be subject to excise taxes like compensation to a “disqualified person”. Some sponsoring organizations have raised concerns that the current proposed rule would consider compensation to an investment advisor as a taxable distribution if the advisor provides both DAF and personal investment advice. 
• Distribution definition: The proposed rule outlines what transactions are considered distributions versus investments. There are questions around why the definition of the two is seemingly different from the definitions that apply to private foundations. A former Treasury official who helped draft the proposal indicated it could be different because DAFs aren’t subject to the same payout requirements as private foundations. However, a potential concern arises if DAFs are faced with a payout requirement in the future. 
• Broadening “What is a DAF?”: The proposed rules would include giving arrangements, such as field of interest funds and giving circles, as DAFs depending on the donor-advisor relationship to the sponsoring organization. Though it doesn’t appear this would cause immediate issues for those using these giving arrangements, should future restrictions or requirements be put in place on DAFs, these arrangements would be subject to those requirements. 

We understand these definitions need to be in place prior to addressing related regulations, and regulators are expected to focus on getting these definitions right before turning to other proposed rules impacting DAFs, like those from the 2017 notice on pledges, bifurcation, public support, and private foundation use of DAFs.

You can submit comments on this proposal now at the Federal Register’s website. Comments will be accepted through January 16, 2024.

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!

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 Returns In-Person – Register Today!

Registration for next year’s Foundations on the Hill is now open – and for the first time since 2020, it will be an in-person event in Washington!

Foundations on the Hill, taking place February 27-March 1, represents your best opportunity to discuss your foundation’s work and priorities with lawmakers and their staff – and urge them to advance policies that boost philanthropy’s impact and move our region forward.

Presented in partnership with the United Philanthropy Forum, this year’s Foundations on the Hill will offer opportunities for both building relationships with lawmakers and boosting your knowledge of policy. Arrive early to take advantage of a full day of programming on February 27 or come in that evening for the official FOTH Welcome Reception ahead of two days of Hill visits. You can learn more about the agenda at the Forum’s website.

The Philanthropy Southeast staff will work with you and other attendees from your state to schedule visits on Capitol Hill and provide you with the information and materials you need to promote philanthropy’s work and priorities.

Foundations on the Hill is also a great opportunity to connect with fellow Philanthropy Southeast members who see public policy as important to their work – you’ll leave with connections from both Capitol Hill and the entire region!

You can register to attend Foundations on the Hill now, but if you’d like to learn more, sign up for our January 18 webinar, Why You Should Attend FOTH in 2023. You’ll hear from our team and from members who will discuss how Foundations on the Hill – and outreach to lawmakers – helps them boost the impact of their giving.

We hope you can join us next year in Washington to help amplify the voice of Southern philanthropy!

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.

Public Policy at the 2022 Annual Meeting

Philanthropy Southeast’s 53rd Annual Meeting is less than two weeks away – and starts just one day after this year’s midterm elections. If you’re joining us in Amelia Island or online, you won’t have to wait long to learn what the results mean for philanthropy and the region.

On Friday, November 11, the Annual Meeting will host a special breakout session, “What Do This Year’s Election Results Mean for Philanthropy and It’s Work?” Starting at 9:45am, the session will feature policy experts, including Philanthropy Southeast members, discussing Tuesday’s results, how they will affect the sector’s policy priorities in the next two years, and how foundation leaders can best respond.

The session will be moderated by Sandra Swirski, founder of Integer, an advocacy firm based in Washington, D.C., that specializes in nonprofit policy. She will be joined by Sara Barba, vice president at Integer, and two Philanthropy Southeast members: Christine Calpin of Casey Family Programs and Susan DeVenny, president and CEO of the Arras Foundation.

If you haven’t signed up for the Annual Meeting, it’s not too late – visit the Annual Meeting website to learn more.

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.

Universal Charitable Deduction Could Return in Year-End Package

Following their August recess, lawmakers have returned to Washington to take care of must-pass legislation to keep the government running. No other major legislation is expected before the midterm elections, but the post-election lame duck period could see major movement on items important to the charitable sector.

The sector is hoping to see a year-end tax bill include a revival of the universal charitable deduction that expired at the start of this year. Last month, the National Council of Nonprofits led a sign-on letter to Congress and the administration asking lawmakers to renew the universal charitable deduction, boost its cap, and expand the amount donors can deduct from their itemized tax returns, as well as retroactively restore the Employee Retention Tax Credit, extend it through 2022, and modify nonprofit eligibility to include childcare and education subsidies. 

Philanthropy Southeast members will be a valuable voice in any conversation around the universal charitable deduction – keep an eye out for details on how you can take action!   

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.

Inflation Reduction Act Makes Big Investments in Health Care and Climate Change

Today, President Biden signed the Inflation Reduction Act, a $750 billion package that includes several items of interest to philanthropy, nonprofits and the communities they support.

Health Care: Under the legislation, senior citizens on Medicare will see their out-of-pocket drug costs capped at $2,000 per year by 2025. The bill also opens the door to Medicare negotiating drug prices, a change that is expected to lower costs. The bill also extends for three years existing Affordable Care Act subsidies. Households making up to 600 percent of the federal poverty level – $159,000 per year – are eligible for the subsidies.

Climate Change: The bill contains many provisions designed to speed up adoption of renewable energy and reduce usage of fossil fuels. Also included in the bill is $60 billion dedicated to environmental justice and disadvantaged communities that stand to be disproportionately affected by climate change. Nonprofits will be eligible to apply for a variety of grant programs created by the bill.

These provisions and others are paid for largely via increased taxes on corporations and stronger enforcement of existing tax laws. None of the tax changes in the bill will affect the charitable sector.

The Inflation Reduction Act as passed largely reflects the outcome of prolonged negotiations between Senate Democratic Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV). It passed on party-line votes in both the House and Senate earlier this month.

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.

Democrats Hope to Move Ahead with Scaled-Back Version of ‘Build Back Better’

Last year, congressional Democrats and the Biden administration spent several months hoping to pass an ambitious package of proposals, known as Build Back Better, that would have represented a significant expansion of social safety net programs.

Those plans fell apart when two Senate Democrats, Joe Manchin of West Virginia and Krysten Sinema of Arizona, objected to the plan due to its scope and proposed tax increases. In the evenly divided Senate, Democrats needed the support of every member of their caucus to pass the bill via the reconciliation process, which forbids the use of the filibuster.

Months later, hopes of passing a slimmed-down package are on the rise. Senate Democratic Leader Chuck Schumer of New York and Manchin have been negotiating on a package that may include proposals on prescription drug pricing, climate change and tax revisions. So far, none of the tax proposals reportedly under consideration would directly affect foundations or donor-advised funds.

If Democrats can agree on a legislative package, party leaders hope to hold a Senate vote on it before the August recess, though that deadline could slip into September.

We will monitor whatever legislation emerges from the ongoing negotiations, particularly any provisions that affect the communities and people philanthropy serves.

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.

Bill to Create Nonprofit Office in the White House Introduced 

On April 26, Reps. Betty McCollum (D-MN) and Fred Upton (R-MI) introduced the Nonprofit Sector Strength and Partnership Act, which would create a new nonprofit-focused office in the White House. The legislation aims to improve coordination between the federal government and the nonprofit sector, and the nonprofit office would make policy recommendations, coordinate the release of data on the sector gathered by federal agencies, and seek to make it easier for nonprofits to access federal grants, among other activities.

The legislation has significant support from many in the charitable sector, including Philanthropy Southeast, which joined with over 500 other organizations to sign onto a letter endorsing the bill.  

When Rep. McCollum introduced similar legislation in 2010, concerns were raised by some in the sector that a new White House office could turn into a regulatory body and politicize nonprofits depending on which party holds the White House. Similar concerns are being raised with the current bill, with some arguing this type of office would imperil the independence of the nonprofit sector.

If no action is taken on the bill this year, it is worth noting that Rep. Upton is retiring at the end of this Congress, so proponents of the bill will likely need to find a new GOP lead sponsor.

p style="text-align:start">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.

Biden Budget Proposes Changes to Rules Governing Private Foundation Use of DAFs

Late last month, the White House released its budget proposal, which lays out President Biden’s spending priorities for fiscal 2023. The budget proposal was also accompanied by the “Greenbook” from the U.S. Treasury Department, which details proposals related to taxes and other federal revenue.

One proposed change may be of interest to private foundations: a provision that would disallow 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.

The proposal arrives five years after the Treasury Department put out an official notice of its intent to regulate in this space, so this proposal sheds light on how the administration may be approaching that notice.

Similar to last year, this proposal does not include a cap on itemized deductions, and therefore the charitable deduction. However, there was also no inclusion of a non-itemizer charitable deduction, also known as a universal charitable deduction, that was enacted on a temporary basis in 2020 and expired at the end of 2021, as requested by several charitable organizations ahead of the budget release.

The White House budget proposal acts as a “wish list” for the administration and provides a basis for congressional negotiations, so it is possible that some or none of these proposals wind up being enacted. As the budgeting process continues, we will keep you updated on any provisions relevant to philanthropy’s work.

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 is One Month Away!

We're one month away from Foundations on the Hill 2022, your best opportunity all year to discuss the impact and importance of your work with policymakers who represent you in Washington.

Like last year, Foundations on the Hill 2022 will take place online, making it easy to participate no matter where you are.

Why attend Foundations on the Hill? Here are a few reasons:

•    Inform and educate lawmakers and key staff members about the work you do and how it supports people in your community
•    Advocate for policies and priorities that amplify the impact of your work and improve lives
•    Build relationships and partnerships with lawmakers that can offer lasting benefits
•    Help lawmakers understand the importance of philanthropy within their own districts and states

Foundations on the Hill is designed for newcomers and policy veterans alike! The Philanthropy Southeast staff will support you and your colleagues by facilitating meetings, offering trainings and providing you with compelling materials that help you tell your story.

Want to learn more about FOTH? View the recording of our recent webinar, Why You Belong at Foundations on the Hill!

Already planning to attend FOTH? Join us March 29 for FOTH 2022: What You Need to Know!