WASHINGTON, D.C.— Legislation that would protect and expand charitable giving, particularly for community charities, was introduced in the U.S. Senate today by Sens. John Thune (R-SD), Bob Casey (D-PA), Pat Roberts (R-KS) and Ron Wyden (D-OR). S. 1343 – the Charities Helping Americans Regularly Throughout the Year Act, or CHARITY Act – includes three provisions strongly supported by the Alliance for Charitable Reform (ACR): a flat one-percent private foundation (PF) excise tax, an expansion of the IRA rollover to include distributions to donor-advised funds (DAFs), and a sense of the Senate urging Congress not to diminish the full scope and value of the charitable deduction in tax reform.
“This legislation includes provisions with strong bipartisan support that will expand charitable giving,” said Sandra Swirski, executive director of ACR. “Expanding the current IRA charitable rollover to include transfers to DAFs and streamlining the private foundation excise tax will allow local charities to benefit greatly.”
The current private foundation excise tax is a two-tiered system that discourages private foundations from greatly increasing their grants – such as for disaster relief – while the current IRA charitable rollover excludes transfers to DAFs.
The non-binding sense of the Senate included in the bill states that “charitable giving should be a goal of tax reform; and Congress should ensure that the value and scope of the deduction for charitable contributions is not diminished during a comprehensive rewrite of the tax code.” Sen. Thune and Senate Finance Ranking Member Ron Wyden (R-OR) offered a similar sentiment to preserve the charitable deduction in a letter they co-authored in 2013, which was signed by 33 senators.
This is the second time the CHARITY Act has been introduced, while legislation streamlining the PF excise tax was introduced in the House of Representatives just last month by Reps. Pat Tiberi (R-OH), George Holding (R-NC), and Richard Nolan (D-MN) as original co-sponsors. Legislation streamlining the PF excise tax was passed by the House in 2014 and 2015 as part of the America Gives More Act.