IPA Members Advocate on Capitol Hill to Protect Perpetual Endowments, DAFs and More

 

By Claudia Cummings, IPA President & CEO

It cannot be overstated how critical it is for philanthropy to maintain relationships with elected officials to protect our work and the lives of Hoosiers.

Public policy directly impacts the capacity and effectiveness of philanthropy, influencing the long-term sustainability of our efforts and the security of foundation endowments. It also has implications for donor privacy, charitable contribution incentives, and philanthropy’s ability to effectively support the nonprofit community and the public good.

Last week, the 18-member IPA delegation traveled to Washington, D.C., as part of IPA's annual trip for Foundations on the Hill (FOTH). The group—which comprised public and private foundations and some participants from Mutz Philanthropic Leadership Institute—met with all of Indiana's congressional offices, including U.S. Senators Todd Young and Mike Braun, as well as representatives and staff from all nine Indiana congressional districts.

FOTH conversations emphasized the vital importance and role of philanthropy and legislation that can impede our work. To illustrate the point, IPA members shared inspiring stories of how they support Hoosiers by funding critical programs, leading research, and bringing communities together to improve various aspects of life, including health and food security, education, arts and culture, affordable housing and homelessness, career training and economic development, and more.

In addition to the Congressional meetings, the delegation had the privilege of attending meetings with experts in various fields. Loan origination experts at Merchants Capital weighed in on impact investing and affordable housing solutions. USDA directors talked to the group about federal resources and grant programs to address Hoosier food insecurity. At a lunch provided by EdChoice, the co-director of the Progressive Policy Institute's Reinventing America's Schools Project, Curtis Valentine, gave an awe-inspiring presentation about the future of education.

The key policy issues the IPA delegation highlighted in its discussions of utmost importance to our sector and the communities we serve include:

1. The Charitable Act (S. 566): Urged our congressional members to support this bipartisan bill. This legislation aims to empower the nonprofit sector to better serve Hoosiers by incent

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   ivizing all American taxpayers, regardless of income, to support charitable and faith-based organizations. By reinstating and raising the expired $300 cap ($600 for joint filers) to approximately $4,500 for individuals and $9,000 for couples, the Charitable Act will provide much-needed resources for these organizations at a time when the number of donors has decreased four out of the last five quarters. A poll conducted by Independent Sector revealed that 77% of voters support restoring the deduction at this level.
2. Nonprofit SEAT Act (H.R. 3245): Rallied behind the Nonprofit SEAT Act, bipartisan legislation introduced on May 12. Unlike all other sectors, the nonprofit sector has no formal seat at the table within government. This act aims to give the nonprofit sector a formal seat at the table within government, leveraging the sector's knowledge. By establishing a White House Office led by an Assistant to the President, an Interagency Council, and a Federal Advisory Board appointed by the President and Congress, this legislation seeks to improve access to data about the nonprofit sector. As the third-largest employer in America (employing 1 in 8 Hoosiers) and a trusted government partner, the nonprofit sector deserves representation and the opportunity to collaborate more effectively in pursuit of shared goals.
3. Private Foundation Distribution Requirements: Supported the current 5% payout level requirement for private foundation distributions, which allows for the availability of funds for distribution in perpetuity. Current tax reform proposals do not include changes to the existing regulation, but we will continue to monitor legislation as it progresses.
4. Donor-Advised Funds (DAFs): Promoted the availability of both endowed and non-permanent DAFs as a viable charitable giving vehicle, and emphasized the fact that DAFs are paying out an average of 27% ($35 billion). IPA stressed the importance of ethical and accountable management of these funds for the public good while protecting the privacy of the donor. 
5. Protect Endowments: Stressed the significance of current laws protecting endowments within the philanthropic sector. IPA made certain our members of Congress knew such laws ensure private resources remain available to address difficult social issues and the evolving needs of society now and in the future, especially when other resources may not be available.
6. Nonprofit Cemeteries: Supported legislation to amend the tax code to recognize 501(c)(13) non-profit cemeteries as public charities. This change would allow these cemeteries to receive estate gifts and contributions from public and private foundations, ensuring their sustainability and the preservation of small cemeteries in rural areas.
7. Post-Graduation Scholarships (H.R.3582): Urged foundations to be allowed to administer post-graduation scholarship programs to promote talent attraction and retention in communities. These programs would provide tax-free student loan forgiveness to college graduates, encouraging them to build their careers and contribute to their communities.
8. IRA Charitable Rollover: Advocated for enhancing the IRA charitable rollover by dropping the age threshold and expanding the organizations eligible for IRA distribution transfers. This would further support charitable giving and enable donors to contribute to donor-advised funds, private foundations, and supporting organizations.

I am grateful so many members joined IPA to make the voice of philanthropy in Indiana heard. If you have questions about IPA’s public policy agenda or would like to learn how you can be involved, please reach out to me or Holly M. Davis.