- June 2009
- The American Recovery Act Provides $150 Billion for Health Care
- President’s Budget Includes Increases for National Service
- President Signs $5.7 Billion National Service Bill Into Law
- Nonprofit Hospitals Criticized for CEO’s Pay
- FY2010 Budget Resolution Adopted by Congress Retains Federal Estate Tax
- Senators Seek to Spur More Foundation Giving
- Senators Consider Changes to Hospitals’ Tax Status
- Pres. Obama Fires National – Service Inspector General
- Court Rules Helmsley Trustees Can Depart From Donor’s Instructions
- Bloomberg Announces Measures to Help Nonprofit Groups
- Minnesota Nonprofit Leaders Win New Law on Property-Tax Exemptions
- IRS Says Charity Web Site Crossed Line Into Prohibited Activity
- Tax Exemptions for Many Non-Profits in Jeopardy
- IRS Watches for Potential Charity Abuses in Bad Economy
- USPS Postpones Its New “Move Update” Standards
- All Pages
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Senators Seek to Spur More Foundation Giving
A new bill pending in the Senate is designed to simplify the tax code for private foundations and encourage them to give more money to charity as the recession continues. The bill, S. 676, would change the way foundations pay excise tax on their net investment income. By eliminating a simple provision in the law that creates a tax penalty when foundations increase their charitable giving, it could encourage greater foundation philanthropy and expand the reach of the invaluable charitable work they fund.
Foundations currently are subject to a tax of 1 or 2 percent. They can qualify for the lower rate in any year in which the percentage of assets they directed toward charitable distributions is larger than the average percentage of their distributions during the previous five years.
The current tax creates an incentive to never dramatically increase giving in any one year because the increase raises the average- donation calculation going forward.
The Senate bill would eliminate the current two-tier excise-tax system and replace it with a flat rate. The flat rate would be set between 1 percent and 2 percent to be determined by Congress’s Joint Committee on Taxation with a goal of not reducing government tax revenue.