The climb toward policy victory is never a smooth one, especially on big issues that impact our sector. Yet, there are often tangible signs of progress all around us if we’re willing to look. A few of those signs showed themselves over the last week and they serve as a reminder that the charitable sector is gaining real altitude with its efforts.
Last Friday, Joint Economic Committee Vice-Chair Carolyn Maloney (D-NY) issued a new report, The Economic Impact on Charities of the 2017 Tax Act. This report—which accompanies legislation introduced the same day—makes the case that nonprofit organizations play a vital role in our economy but are being buffeted by several harmful policy forces. It notes widespread concern about charitable giving trends before sounding the alarm about the two tax increases levied on nonprofit organizations through unrelated business income tax (UBIT) in the 2017 legislation. Encouragingly, the report extensively cites Independent Sector’s UBIT impact research to which so many of our partners, allies, and members contributed.
This Tuesday, the House Ways and Means Committee advanced bipartisan IRS reform legislation, the Taxpayer First Act of 2019. Section 3101 of the legislation contains language—long supported by many in the charitable sector—requiring annual Form 990s to be filed electronically and made available in machine-readable format. We believe this requirement would increase transparency, help regulators and independent watch dog groups identify areas for greater scrutiny, and help nonprofit leaders better understand their sector through improved information flow.
The next day, members of the House Ways and Means Committee convened the first meeting of a working group that is analyzing the 2017 tax bill’s cap on the state and local tax (SALT) deduction. While much of the focus on this issue has been about its impact on state and local budgets, legislators are clearly also hearing that this cap leads many Americans not to itemize their taxes, thus losing access to the charitable deduction. Jeff Moore, chief strategy officer at Independent Sector, was invited and shared concerns about the 2017 bill’s impact on giving, urging legislators to consider a universal charitable deduction.
We may not have reached any mountaintops over the past week, but we are climbing. Onward and upward!