BLOG

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.

Georgia, Kentucky Pass Laws Addressing Donor Intent

Note: This item has been updated to correct the name of Kentucky's governor, Andy Beshear.

In legislative sessions this year, Georgia and Kentucky both passed similar bills that supporters say will protect donors by giving them a course of action when they feel a gift recipient does not honor their intent.

Both bills – SB 433 in Georgia, SB 70 in Kentucky – would apply in cases where a charitable organization or trust with an endowment fund, such as a university, accepts a gift that includes an endowment agreement with the donor. 

If the donor learns the terms of the agreement have been violated, they would have four years to bring a civil action in state court. If a court agrees that an agreement has been violated, they would be able to order the gift recipient to comply with its terms. Neither bill would allow a gift to be returned, however.

While the bills are nearly identical, there are subtle differences. The Georgia bill, signed by Gov. Brian Kemp (R) on April 22, applies to both individuals and entities. It would give the donor, their legal representative, or their lineal descendants – up through great-grandchildren – the right to file suit. The Kentucky legislation, signed by Gov. Andy Beshear (D) on April 9, applies only to individual donors or their legal representative.

Similar legislation may be introduced in other states in the region – we are closely monitoring developments and may provide programming on this topic in the future. If you have questions about legislative developments in your state, please contact Jaci Bertrand at jaci@philanthropysoutheast.org.

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.

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.

Register Today for Foundations on the Hill!

Foundations on the Hill -- your best opportunity to be an advocate for philanthropy and discuss your foundation's priorities with policymakers – is less than a month away, but there’s still time to join the Philanthropy Southeast delegation!

This year, you can choose between two experiences for Foundations on the Hill: One for those eager to learn more about policy, advocacy and the issues philanthropy is concerned about, and another is ideal for FOTH veterans who are ready to dive right into meetings with policymakers.

Learn more about Foundations on the Hill – and sign up to attend – at PhilanthropySoutheast.org.

National Study on DAFs to be Released During FOTH

Foundations on the Hill attendees will be among the first to hear the results of the DAF Research Collaborative’s (DAFRC) National Study on DAFs.

Informed by data provided by community foundations and other DAF sponsors throughout the United States, including more than two dozen community foundations from the Southeast, this study is the most comprehensive research project on DAFs to date. This new work builds upon the field’s existing knowledge of DAFs and explores new areas of concern to DAF sponsors, donors, and grant recipients.

Philanthropy Southeast partnered with the DAFRC last year to encourage broad participation in the study. In addition to the national report, Philanthropy Southeast has commissioned a separate analysis of DAF providers in the Southeast region. This regional study is expected to be available in late March or early April.

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.