24 March 2014

Congress to Consider Tax-Related Typhoon Haiyan Legislation

Later today the House of Representatives will begin consideration of a bill seeking to boost charitable giving for recovery efforts related to Typhoon Haiyan, which devastated the Philippines last November. H.R. 3771, the Philippines Charitable Giving Assistance Act, is sponsored by Rep. Eric Swalwell (D-CA) and would allow contributions for Typhoon Haiyan recovery efforts made before April 15, 2014 to count as charitable deductions for tax year 2013. With many taxpayers about to complete tax filing for 2013, this could significantly boost relief efforts.

“This legislation I’m sponsoring will provide another incentive for Americans to donate and donate now — when their help is needed most,” Swalwell was quoted as saying by The Hill.

The legislation serves as another illustration of how Congress recognizes that tax policy directly affects charitable giving, particularly when it comes to the timing and size of charitable gifts. For example, President Barack Obama’s proposed cap of 28 percent on all charitable contributions could cost the charitable sector as much as $9.4 billion in charitable giving in the first year alone. On the contrary, Representative Dave Camp’s (R-MI) proposed consolidation of the private foundation excise (PF) to a streamlined one percent would eliminate the current two-rate structure of the tax, which has the practical effect of deterring foundations from increasing their grants during times of great need.

“Members of Congress have long acknowledged that tax policy does indeed influence private charitable giving, for better or worse,” Joanne Florino, senior vice president for public policy at The Philanthropy Roundtable, said. “This [Typhoon Haiyan] legislation and other provisions such as the charitable deduction, the private foundation excise tax, and the IRA charitable rollover all play a significant role in how much and when people give.”

H.R. 3771 will require a two-thirds majority vote to pass the House and be sent to the U.S. Senate for consideration.

For those who want to contribute to Typhoon Haiyan relief efforts, please read this feature in which Philanthropy Roundtable members and friends discuss organizations with long experience in delivering disaster relief around the globe quickly, effectively, and efficiently.