Many leaders in the nonprofit and philanthropic communities have started advocating for the U.S. Senate to pass the “America Gives More Act of 2014.” With not much time on the legislative clock, public debates have collapsed into talking points; expectedly, these talking points largely skew the general dialogue.
Seeking to take advantage of the August recess, a number of philanthropic umbrella organizations have drafted op-ed pieces, "letters to your senator," and call scripts to enliven nonprofit advocacy organizations across the country. Trying to get the “America Gives More Act” on the top of the legislative agenda will undoubtedly be an uphill battle, particularly considering a truncated governing schedule for the Class 2 senators (and those in special races) seeking reelection this November.
Though there is some variation, the arguments in favor of the legislation are fairly consistent. Vikki Spruill of the Council of Foundations wrote in the Chronicle of Philanthropy highlighting three main points: first, noting the bill makes “permanent deductions for IRA charitable rollovers, contributions of conservation easements, and donations of food inventory”; second, emphasizing the bill “simplifies the private-foundation excise tax”; and third, pointing out the bill extends the deadline for tax write-offs from December 31 to April 15.
Similarly, the National Council of Nonprofits argues:
The America Gives More Act is needed to promote and ensure support for the work of charitable nonprofits, especially when demand for nonprofit services continues to rise and donations are not keeping up with demand.
The America Gives More Act (HR. 4719), sponsored by Rep. Tom Reed (R-NY), was introduced in late May. After making it through the House Committee on Ways and Means, the bill passed the House with bipartisan support, with the final tally at 277-130 (with 25 not voting). Though the bill had bipartisan support, it was largely a Republican-led effort, with only one Republican voting Nay and nearly 70 percent of voting Democrats joining him. After passing on July 17, the bill has sat in the Senate, and there is no evidence that it will be brought to the floor anytime soon.
Though the bill summaries provided above by the Council of Foundations and National Council of Nonprofits are correct, the focus of this bill was originally on “charitable contributions of food inventory” (see CRS summary). Interestingly enough, the bill was actually introduced as the “Fighting Hunger Incentive Act of 2014,” and its short title was only changed to the “America Gives More Act of 2014” following its passage in mid-July.
While nonprofit organizations are urging citizens to contact their senators, the bill is likely to be stalled, particularly because the bill is opposed by the White House; in other words, even if it were to pass the senate, it would unlikely do so with two-thirds of the chamber voting in the affirmative. According to a White House Statement of Administration Policy, “the Administration strongly opposes House passage of H.R. 4719,” mainly because the bill adds to the national deficit (h/t Nonprofit Quarterly). In fact, the nonpartisan Congressional Budget Office found that enacting the law would increase the deficit by over $1.9 billion over 2014-24.
Once again, the philanthropic community finds itself at a major public policy crossroads between government spending and financial support for “nonprofits.” On the one side, the “fiscally conservative” Republicans in the House are in favor of sacrificing the former for the latter; on the other, the Democratic Administration is prioritizing its deficit-reducing measures over supporting charity.
Nevertheless, this public policy discussion finds itself trapped within these choices due to the mammoth Internal Revenue tax code. Rather than presume a pro-nonprofit position (in this case, adhered to by House Republicans), it should be incumbent upon nonprofit leaders (such as some of those quoted above) to outline why such a tax loophole (facilitated by the “America Gives More Act”) is necessary for nonprofits, rather than preferred. Additionally, such leaders should offer long-term solutions alongside their short-term talking points.
Is nonprofit dependency on government action improved by the “America Gives More Act”? While many agree the benefits brought by the bill are advantageous, coupling its benefits with a mechanism to make it deficit-neutral would de-politicize the debate and facilitate real change. Rick Cohen at Nonprofit Quarterly makes a few suggestions for such mechanisms, and it is this type of fiscally minded policy creation that is necessary to benefit our nonprofits as well as our politics, assuming the status quo tax code.
(You can read the bill in its entirety here.)