The ACR newsletter tracks with the end of congressional sessions to highlight the most important developments here in Washington. The timing will vary, based on the congressional calendar, but you can expect a newsletter from us about once a month. In the meantime, we’ll be sharing significant developments through our email News Alerts and in real time on our Twitter feed (@ACReform) through our #HillScoop and #SectorScoop updates.
>> Congress: Expanded Universal Charitable Deduction Not Included in HEALS Act
>> State: California DAF Bill Threatening Donor Privacy Dropped from Consideration
>> Election: Senator Kamala Harris (D-CA) Tapped as Joe Biden’s Running Mate
>> National: Other News You Can Use
>> National: Top Reads
The Story: On August 14th, the Senate adjourned for the remainder of August without a deal on the next COVID relief package. As you may recall, late last month Senate Republicans released their version of the a relief package, known as the HEALS Act, which set the stage for negotiations between the upper and lower chambers. However, after weeks of negotiations, Republicans and Democrats remained miles apart on price and policy details. In response to the stalemate, President Trump issued a series of executive orders, and Senate Republicans introduced a skinny version of the bill last week that’s expected to be negotiated when lawmakers return in September. It is limited in scope and includes additional USPS funding, Paycheck Protection Program extensions, liability protections and enhanced unemployment benefits.
Despite calls from lawmakers in both parties in both chambers, an expansion of the $300 temporary universal charitable deduction that passed in March was absent in the HEALS Act and the latest “skinny” version. It was similarly left out of the House’s HEROES Act that passed the lower chamber in June.
The charitable sector has been advocating for a bill expanding the universal charitable deduction – known as the Universal Giving Pandemic Response Act – and is continuing to push for inclusion in the next relief bill should a package come together. Most recently, the Charitable Giving Coalition sent a letter, which can be found here, to Senate Finance and House Ways and Means leaders requesting inclusion in the next package. And, our champions in both the House and Senate continue to urge leaders to expand the deduction in future legislation. You can find examples here and here.
Our Take: The absence of the expanded universal charitable deduction in the relief bills is disheartening, but the continued push from champions in both chambers signals that hope is not lost to expand the important giving incentive. It will take continued advocacy from the entire charitable sector and key lawmakers to get an expansion over the finish line, and we’ll continue working with our colleagues to keep this top of mind for lawmakers during recess and when they return.
The next chance for Congress to consider a COVID relief bill will be in September. Keep in mind, lawmakers will also be working on a government funding bill at the same time to avoid a shutdown at the end of the month. It is becoming more likely that lawmakers will package some relief measures with a funding bill, but the scope could be limited given the high risk of not coming to a deal. Stay tuned.
The Story: A bill in California that would create a new classification for donor-advised funds and sponsoring organizations and allow the Attorney General to engage in rulemaking to implement reporting requirements will not be considered this year.
You may recall, A.B. 2936 was referred to the Senate Judiciary Committee after passing the California Assembly in June, but recent spikes in COVID cases in the state caused the legislature to delay their return to session. The delay shortened the timeframe for the Senate to consider the large amount of bills that was sent over from the Assembly, so this legislation was bumped from the list and will not be heard by the committee this year.
Our Take: The lack of donor privacy protections in the bill caused ACR great concern, so we have been working closely with our colleagues in the state, including the League of California Community Foundations and Southern California Grantmakers, to oppose any version of this legislation that would threaten donor privacy.
We’re encouraged that this bill won’t be considered this year, as it’s clearly not a top priority for the Senate Judiciary Committee, but we do expect the bill sponsor to reintroduce similar legislation next year again targeting donor-advised funds and donor privacy. We’ll continue to monitor those developments and potential actions in other states as more legislatures attempt to implement similar policies.
The Story: Democratic presidential nominee Joe Biden named Senator Kamala Harris (D-CA) as his running mate last week. Sen. Harris, former California Attorney General, has served as the junior Senator from California since 2017 and had a brief primary run last year before dropping out. During her time in the Senate, Senator Harris has not been active on nonprofit issues. However, as AG in California, Harris ramped up enforcement of nonprofit donor disclosure laws.
Former Vice President Biden has already proposed capping itemized deductions, including the charitable deduction, at 28 percent to pay for his higher education plan. This all-too-familiar pay-for has been put forward by President Obama and again by then-candidate Hillary Clinton in the past, which was met with staunch opposition from the charitable sector.
Our Take: Requiring donor disclosure and limiting the charitable deduction both pose threats to the philanthropic freedom that allows our civil society to thrive. We’ll continue to educate lawmakers and presidential campaigns about the direct and indirect effects proposals like these could have on the charitable sector’s ability to serve communities in need.
Follow us on Twitter @ACReform to track how we’re responding to candidates about the impacts of their proposals leading up to the election in November.
The Story: Senate Republicans unveiled their package of relief bills at the end of July, known as the HEALS Act, which included a few provisions that might be of interest to the charitable sector: more funding for the Paycheck Protection Program (PPP), liability protections, and unemployment relief for nonprofits. Below is an overview on these provisions. Stay tuned for more on this once negotiation talks pick back up.
Paycheck Protection Program
The popular Paycheck Protection Program, for which 501(c)3 charities were eligible in the CARES Act, would be extended and funded further in the Senate GOP’s proposal. This new package would extend availability to some 501(c)6 nonprofits, provide an additional $190 billion in funding for the program, and include stricter eligibility requirements for what is being called a “second draw,” meaning a second loan for nonprofits that already received a loan in the first round. Nonprofits are eligible for second draw loans if meet the applicable SBA revenue size standard, have no more than 300 employees and are able to demonstrate a 50-percent drop in gross revenue.
Liability Protections for Nonprofits
The package also includes the Safe to Work Act, which provides liability protections for nonprofits. The protections would shield eligible entities from COVID liability related to exposure and treatment between December 2019 and October 2024.
Unemployment Relief for Nonprofit
The package increases the unemployment reimbursement amount, from 50 to 75 percent, provided to states to reimburse nonprofits, government agencies and Indian Tribes for the costs they incur through December 31, 2020 to pay unemployment benefits.
- National: Donors Still Bullish Despite Pandemic and Economic Collapse
- National: Senate Stimulus Bill Would Expand Loans for Charities but Omits Other Nonprofit Priorities
- National: Covid-Inspired Generosity Will Continue, Fidelity Charitable Says
- National: IRS gives businesses a break for donations related to SALT cap
- National: Business CEOs and Investment Fund Team Up to Steer DAF Dollars to COVID Response
- National: COVID Pushed DAF Giving Higher
- Opinion: Congress Should Remove Roadblocks to Generosity for NonprofitsOpinion: Expanded universal charitable giving incentives crucial to economic recovery
- Blog: The Problematic Characterization of the Charitable Deduction as a Subsidy