27 May 2020

Washington Roundup: New COVID relief bill, Calif. DAF legislation, and payout requirements

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 a.nd #SectorScoop updates.

>> Federal: Congress: House’s Version of the Next COVID Relief Bill Does Not Expand Charitable Deduction
>> States: California DAF Legislation Passes Assembly Judiciary Committee
>> Sector: Millionaires Call on Congress to Increase Payout Requirements
>> National: Other News You Can Use
>> National: Top Reads


Congress: House Version of Next COVID Relief Bill Does Not Expand Charitable Deduction

Earlier this month, House Democrats introduced and passed the HEROES Act, their version of the next COVID relief bill. The $3 trillion bill would provide assistance to state and local governments, hazard pay for frontline health care workers and additional funds for direct payments to Americans. It also amends the Paycheck Protection Program, the popular loan program that can convert to a grant, to increase access for nonprofits.

As you may recall, the massive relief bill known as the CARES Act that was signed into law in March included a temporary provision to extend an above-the-line charitable deduction for cash gifts made in 2020, capped at $300,  for taxpayers who choose not to itemize their taxes. The universal charitable deduction has been one of ACR’s signature priorities for several years, and we have been working with our colleagues in the Charitable Giving Coalition to expand and extend the deduction. However, despite bipartisan calls from members of congress to increase the $300 cap on the temporary UCD, the most recent House bill didn’t include additional provisions to increase charitable giving. You can read more about the exclusion in our most recent blog post.

The HEROES Act will now go to the Senate, where it has been dubbed “dead on arrival” by several key Senate Republicans. Instead, it’s being viewed as a Democratic messaging bill to set a marker for future negotiations. As for timing, Majority Leader Mitch McConnell (R-KY) has indicated the Senate will not begin working on additional relief legislation until lawmakers get a better idea of what issues they want to address based on how that initial CARES Act relief bill is landing in communities.

Our Take: Senate lawmakers are back in their districts this week for the Memorial Day work period, so we likely won’t see any action on a further relief bill from Senate Republicans until mid-June. In the meantime, we’re working with the Charitable Giving Coalition to advance the expansion of the universal charitable deduction, which has been led by Senators James Lankford (R-OK) and Chris Coons (D-DE), in future relief legislation. The requested expansion would increase the cap from $300 to $4,000 for individuals and $8,000 for married couples and extend the window of availability for the deduction to future tax years. You can read more about these efforts here.

States: California DAF Legislation Passes Assembly Judiciary Committee

Earlier this month, the California Assembly Judiciary Committee heard and passed A.B. 2936, a bill that would create a new classification for DAFs and sponsoring organizations, allowing the Attorney General to engage in rulemaking to implement reporting requirements that could threaten donor privacy. The bill now heads to the Appropriations Committee, and it must pass the full Assembly by June 17th to move to the Senate for consideration this term.

This bill is different than the DAF bill (A.B. 1712) Assemblywoman Wicks introduced last year, and eventually pulled from consideration, that raised donor privacy concerns because it would have instructed the AG to collect information on donors. To read more about the California legislation, see our previous newsletter here.

Our Take: ACR still has donor privacy concerns with this legislation, as it would grant the AG authority to implement reporting requirements that could contain identifiable information on donors, and we wrote to the Assembly Judiciary Chairman requesting language be included protecting donor privacy. You can find that letter here. The bill faces significant headwinds on the road to passage, as the last attempt (A.B. 1712) was deemed to be too expensive, and the state Senate is currently only considering legislation that is COVID related. Stay tuned for updates.

Sector: Millionaires Call on Congress to Increase Payout Requirements

Over the past several weeks, you may have read about the “Patriotic Millionaires” group that has been calling for an increased private foundation payout to 10 percent and the same payout requirement on donor-advised funds, both for the next three years.

Unfortunately, these kinds of proposals not only are a threat to philanthropic freedom, but also conveniently ignore the important grantmaking being done voluntarily in the face of the current crisis. A report from the Community Foundation Public Awareness Initiative shows donor-advised funds are stepping up during the crisis, with DAF grants from 64 community foundations increasing by 58 percent in March and April compared to the same time last year. And private foundations are stepping up their grantmaking as well, which you can read about on The Philanthropy Roundtable’s website.

Our Take: As noted in our response in the Chronicle of Philanthropy report, mandating increased payouts in times of crisis could deplete philanthropic resources that may be needed during future crises. And having millionaires and politicians decide which crises are worthy of that increased payout is a dangerous game to play with private resources. We’ll be responding in the media and on Capitol Hill as appropriate.

Other News You Can Use

In addition to passing the HEROES Act, the House also passed a rule change earlier this month to temporarily allow members to cast committee and floor votes remotely via proxy, so they don’t have to be in Washington to cast votes. The change, which passed along party lines, came as Democratic lawmakers voiced their concerns about returning to Washington during the pandemic. The measure will expire at the end of June unless extended. The House is scheduled to be in session this week to vote on a package that would amend the forgiveness requirements for the Paycheck Protection Program, but some members may choose to stay in their districts and cast their votes remotely.

Top Reads