Included in this Round-Up

• The Multi-Trillion Dollar Mega Issues Dominate, but Progress Continues on our Core Issues
• Universal Charitable Deduction
• IRA Charitable Rollovers
• US Postal Service
• Legislation Regulating Donor Advised Funds (DAFs)
• From the States

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The Multi-Trillion Dollar Mega Issues Dominate, but Progress Continues on our Core Issues

While the headlines are filled with the latest news on the $1.2 trillion Infrastructure Package and the $3.5 trillion—perhaps heading to $2 trillion—Reconciliation Package, work continues, often quietly, on the issues important to the nonprofit sector. Here are the updates on how TNPA is working on your behalf.

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Universal Charitable Deduction

We are fast approaching the December 31, 2021, expiration of the Universal Charitable Deduction. For tax year 2021, the deduction is $600 for married couples filing jointly and $300 for individuals. This deduction is open to all taxpayers and is particularly important to the 88% of taxpayers who do not itemize their federal taxes and thus are not eligible to claim a deduction when making a charitable contribution.

One of TNPA’s top legislative priorities is to extend the Universal Charitable Deduction into tax year 2022. And on that front we have some good news! The legislation of Senators James Lankford (R-OK) and Chris Coons (D-DE) that would extend the deduction into tax year 2022 is continuing to gain momentum and now has 14 Senators signed onto the bill, including four (two Democrats and two Republicans) on the committee of jurisdiction, the Senate Finance Committee.

Momentum is growing for finalizing a package of so-called “tax extenders” — extentions to tax provisions which expire at year-end. Importantly, it appears that the Universal Charitable Deduction will be among the items to be included in this package. We’ll continue to be working this issue hard!

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IRA Charitable Rollovers

TNPA continues to push for legislation expanding IRA Charitable Rollovers.

In the House, as previously reported, the Ways & Means Committee reported out of committee for consideration on the House Floor legislation expanding the IRA Charitable Rollover by indexing the current $100,000 annual cap to the CPI, thus allowing the cap to rise as the CPI increases each year.

With the Senate yet to take action on IRA Charitable Rollovers, TNPA CEO Shannon McCracken recently participated in two C-Suite level meetings with senior staff of Senator Mike Crapo (R-ID), Ranking Republican on the Senate Finance Committee, and the Chair of the Finance Committee Senator Ron Wyden (D-OR). The senior executives called on the Senators not only to substantially raise the current annual cap on IRA Charitable Rollovers to $400,000, but also to lower the age of eligibility for initiating an IRA Charitable Rollover from the current 70¹/₂ to 65. With 10,000 baby boomers turning 65 each day, this latter change could be highly beneficial to the sector.

The Senate is expected to consider this legislation in 2022.

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US Postal Service

Timing is everything in terms of enacting new policies. The dual-track effort on the postal front continues — challenging in federal court the assertion of the Postal Regulatory Commission (PRC) that the 2006 Postal Reform Act allows for postal rate increases in excess of the rate of inflation, or CPI, while simultaneously working with Congress on legislation which could provide a limitation on future postal rate increases.

On September 13, the Federal Court of Appeals in Washington, DC held an oral argument on the suit challenging the decision of the PRC to grant the Postal Service authority to raise postal rates far in excess of the CPI. The initial suit was filed by the Alliance of Nonprofit Mailers, in conjunction with two other mailer organizations. TNPA actively supported the litigation. The court’s decision could come later this year or early next.

In the interim, TNPA continues to dialog with key members of Congress about the postal reform legislation currently being debated on Capitol Hill. This legislation, while having several positive provisions—including moving postal retiree healthcare costs from the USPS to Medicare–nonetheless has no language limiting future postal rate increases.

Please stay tuned, particularly if the court rules against our position. It will be critically important to have the legislation on the Hill amended to include a limitation on future postal rate increases.

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Legislation Regulating Donor Advised Funds (DAFs)

Senate Bill S. 1981 was introduced by Senators Angus King (Independent/Maine) and Charles Grassley (Republican/Iowa). Their legislation, the Accelerating Charitable Efforts Act, or “ACE,” proposes a variety of restrictions on donor advised funds.

Among the proposed restrictions are limitations on donating non-publicly traded assets into a DAF (versus cash or publicly-traded stock). There are also requirements as to how quickly funds placed in a DAF are paid out, including a mandatory pay out in most cases of 15 years.

It appears that at least for now there is little momentum for this legislation to be enacted in the current 2021/2022 congressional cycle.

With the membership of TNPA divided on the question of DAF regulation, TNPA has yet to take a position on this legislation.

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From the States

Calling Out Two Data Privacy Bills: Minnesota and Massachusetts

Minnesota HF 147 (companion bill SF 1408) is a very detailed and sophisticated data privacy bill. It does not include either a private right of action or opt-in requirement. As such, it would not ordinarily be high on our watch list. It does, however, explicitly intend to include nonprofits as “controllers” and/or “processors” subject to the law. Which nonprofits will be covered is not altogether clear. See TNPA website (link below) for more information. The bill will likely be on the agenda when the legislature convenes in January.

Massachusetts is moving toward legislation which is almost certain to include both private-right-of-action enforcement and opt-in as a condition for data use. The Committee of jurisdiction briefly heard three comprehensive privacy bills (HB 136, HB 142, and SB 46) in mid-October. Which of these will move forward remains unclear. However, the sense of the Committee was very clear. It looks to advance legislation which will push out the bounds of regulation and become a model of consumer protection. See TNPA website (link below) for more information.

And more… We continue to follow legislation in many states. For more details and additional state bills that could impact the work of the nonprofit sector, as well as links to the actual bills, visit our States Policy page.