U.S. Tax Policy Should Promote Charitable Giving
OGF President George E. Espy encouraged Congress to use federal tax policy to encourage charitable giving recently, when he submitted comments for a hearing of the House Ways and Means Subcommittee on Select Revenue Measures, chaired by Central Ohio Representative Pat Tiberi.
In announcing the June 8th hearing, Chairman Tiberi said, “As part of the Ways and Means Committee’s ongoing effort to review dozens of tax provisions that either expired last year or expire this year, we need to consider carefully the principles that we should use to evaluate the merits of these policies. . . . it is time for the Subcommittee Members to roll up their sleeves and see how the provisions stack up against what experts consider the principles of sound tax policy.”
The provision that OGF is most focused on is the IRA Charitable Rollover, which expired at the end of 2011. It allows a taxpayer aged 70 ½ and older to donate IRA assets tax free to charities like community foundations, universities, food pantries and thousands of other causes. When it expired, it deprived Americans of a significant pool of dollars they can use to support community organizations at a time when they are struggling to meet critical needs in the face of slow economic recovery.
In his submitted comments, Mr. Espy gave examples of the impacts these IRA dollars have made in Ohio:
- A donor’s half million dollar pledge to the capital campaign to build a local technical college campus brought higher education to Coshocton for the first time, resulting in 700 students currently enrolled who otherwise wouldn’t have access to a college education in their community.
- A donor’s wish to honor his wife’s memory led him to use IRA assets to establish a scholarship fund in her name at his local community foundation. This rural community’s college-bound students will have an opportunity for the next 20 years to win a $5000 scholarship that will help them reach their dreams.
- A donor’s passion for her community foundation allowed her to make $100,000 gifts per year to support the foundation’s operating expenses – roughly half of its operating dollars. Without the provision, the donor said “I will no longer be able to make gifts of such significant size” and the foundation’s executive director must look for new sources of operating support.
- A businessman’s IRA contribution to his local community foundation provided grant dollars that supported alcohol and drug abuse treatment services and medical care for uninsured people in Lorain County.
These are just a few of the examples we have shared in our meetings with Rep. Tiberi, who has a deep understanding of the support grantmakers provide in his district, which has 151 foundations that annually invest over $190 million in local nonprofits. We appreciate his support of the sector, which he demonstrates by his co-chairing the House Philanthropy Caucus and his past sponsorship of legislation to extend and expand the IRA Charitable Rollover. As work on a tax extenders package moves forward in the House, we hope Rep. Tiberi and other Ohio legislators will reinstate the IRA Charitable Rollover and allow this stream of charitable dollars to once again flow in Ohio and the U.S.