NEWS SOURCES | ARCHIVES OF PAST MONTHS

Charities Get Less From Car Donations

Charities reap less money from the donation of cars than the donors expect, congressional investigators say. One reason is that charitable organizations sometimes auction donated cars at wholesale prices and receive less than what the donor calculates as the fair market value of the vehicle, the Congressional Budget Office reported Tuesday.

Charities must also absorb processing costs, including fees paid to professional fund-raisers that organize donations and sales on their behalf.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, said it is "disturbing" that charities only get pennies for every dollar of value in these vehicles.

But the congressional investigators said charities do not mind getting only a fraction of the proceeds. "They view any proceeds from this program as revenue they otherwise wouldn't have," said GAO investigator Cathleen A. Berrick.
By MARY DALRYMPLE The Associated Press

Senate Votes to Boost Charitable Donations Bill Passed Minus Faith-Based Provisions

The Senate overwhelmingly approved a bill yesterday to encourage contributions to charitable groups, two weeks after its sponsors shelved controversial proposals by President Bush that would have made it easier for religious charities to receive federal grants.

Despite strong bipartisan support for its proposed tax breaks for people who make charitable donations, the bill stalled in the Senate last year -- and threatened to bog down there this year -- because of a church-state controversy arising out of Bush's "faith-based initiative."

Faced with continuing deadlock, Sen. Rick Santorum (R-Pa.) agreed to drop contentious provisions that would have expanded religious groups' access to federal grants and contracts under conditions that critics said would lead to government-funded proselytizing and job discrimination. Without those provisions, opposition evaporated and the Senate approved the bill, 95 to 5.

The action was the last hurdle in Bush's two-year effort to pass "faith-based" legislation, one of the signature issues of his presidential campaign.
By Helen Dewar Washington Post Staff Writer Thursday, April 10, 2003

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Bush Lowers Goal of Tax Cut Plan in a Concession

President Bush lowered his target for his tax cuts today to $550 billion, a significant retreat on his economic principles and an admission that his original package worth $726 billion was dead.

But in a speech in the White House Rose Garden, Mr. Bush made clear this morning that the fight was not over and that he would immediately seize on his capital from the victory in Iraq to try to push through Congress as aggressive a tax cut as possible. White House advisers said that they were now on a war footing with Capitol Hill and that the next months would be an important test of the president's political credibility.

"It's not `if' we have the package, it's how big will the package be," Mr. Bush said in his first remarks about the economy since the start of the war. "The `if' is over with. In this debate, the goal is not to set arbitrary numbers for that package. The goal is to determine what our economy needs, what small businesses need, what workers need."
By ELISABETH BUMILLER NYTimes WASHINGTON, April 15

Report Finds Tax Deductions Spur Charitable Giving

A new report from Independent Sector, a D.C.-based coalition of philanthropic organizations dedicated to strengthening the nonprofit sector, finds that the ability to take a deduction for charitable contributions plays a major role in donors' decisions about how much they give to charity.

Although current U.S. tax law permits those who itemize their charitable contributions to claim a deduction, approximately two-thirds of all taxpayers take the standard deduction and do not itemize their returns. The report, Deducting Generosity: The Effect of Charitable Tax Incentives on Giving, examines the differences in giving patterns between households that itemize and those that do not and finds that the former donate 37 percent more than non-itemizing households. The Senate recently approved legislation designed to encourage charitable giving by allowing non-itemizers to claim a charitable deduction, but the bill must go back to the House for approval before it can be signed into law by the president.

"This report illustrates the connection between tax policy and philanthropy," said Independent Sector president and CEO Diana Aviv. "Indeed, it is evident that tax policy is a powerful tool to encourage giving. Now that the Senate has passed the CARE Act legislation to encourage greater charitable giving through the use of tax incentives, we urge the House of Representatives to move expeditiously with the same legislation, so the president can receive a bill on his desk as soon as possible."
Independent Sector Report Details Influence of Tax Itemizing Status on Charitable Giving. Independent Sector Press Release 4/15/03.

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The Federal Reserve left interest rates unchanged today (March 19th), but it also departed from its standard practice by saying that the uncertainties about Iraq were so great that it could not assess the risks of an economic downturn.

It was the first time that the Fed has refused to comment on the "balance of risks" between inflation and recession since February 2000, when it began announcing the assessment after every decision on monetary policy.

The decision leaves the benchmark federal funds rate on overnight loans between banks at 1.25 percent, the lowest in 41 years. But many analysts and traders had been expecting a broad hint about the Fed's willingness to pump money into the system if the economic news did not improve.

In a statement after the meeting of its Federal Open Market Committee, the Fed said, "In light of the unusually large uncertainties clouding the geopolitical situation, the committee does not believe it can usefully characterize the current balance of risks."

Today's decision reinforces previous statements by Alan Greenspan, the Fed chairman, that the economy's weakness stems primarily from jitters leading up to a war with Iraq and that the outlook will improve once the issues are resolved.
EDMUND L. ANDREWS NY Times

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Court Considers Nonprofit Donations

The U.S. Supreme Court heard arguments yesterday in a case that will have a major impact on how the average citizen can affect the political process. At issue: Can nonprofit groups donate to federal candidates?

The case involves a specific nonprofit - North Carolina Right to Life - but the consequences will affect all non-profit advocacy groups. Jim Bopp, general counsel for North Carolina Right to Life, argued the case before the court.

"We are before the Court, saying that direct contributions from these groups to candidates (are) also protected by the First Amendment," Bopp said. "The participation of advocacy groups in our political process is really important. It allows a way for people of average means, to effectively participate. You don't have to be wealthy when you join with others."

Non-profits have long had the right to publish ads in support of candidates, but cannot contribute money directly to a campaign. The reason? The Court views possible "corruption" of the political system as the critical issue. But Mat Staver, president of the religious liberty law firm Liberty Counsel, said contributors to non-profit groups are not a "danger" to democracy.

"Someone who contributes 25 dollars to a non-profit organization is not going to expect that he or she is going to get some direct benefit from the government, because the organization as a whole makes the contribution," Staver said.

Added Bopp: "Because they're organized to promote political ideas, (contributors) cannot corrupt the political system. In fact, they are the ones that should be participating in our political system."
Terry Phillips in FamilyNewsinFocus

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Figuring Charitable Donations Often Tricky

It's the time of the year when Americans can do well because they do good.

The Internal Revenue Service says more than one-third of all taxpayers claim deductions for charitable giving. Donors valued their contributions to nonprofit organizations and religious institutions at more than $140 billion in 2000, the most recent year for which statistics are available, according to the IRS.

But to get those deductions, tax filers must follow rules that can be a bit tricky.

To begin with, donations must go to IRS-approved charities or to religious institutions such as churches, mosques and synagogues. Contributions to individuals - even, for example, to a needy homeless person - are not allowed.

It's especially important that taxpayers document contributions of cash or personal property valued at $250 or more, experts say. "If it's $250 and above, and if you don't have a receipt from the charitable organization, it isn't deductible," said Jacob I. Friedman, chairman of the tax department at Proskauer Rose LLP in New York.

For most taxpayers, documenting cash donations isn't a problem. They can save their checks or credit card statements or the written receipts they receive from charities. It's determining the "fair market value" of non-cash contributions such as used clothing, appliances and furniture that can cause headaches. The IRS cautions that taxpayers tend to overvalue their donated goods. "The fair market value of used clothing and other personal items is usually far less than the price you paid for them," the IRS says in its publication on charitable contributions. It suggests taxpayers check prices in consignment and thrift stores.
Associated Press in The Contra Costa Times

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Senate Bill to Aid Charities Retooled

The leading Senate Republican champion of President Bush's initiative to help religious charities agreed yesterday to drop its most controversial provisions in hopes of winning swift approval of tax incentives to encourage charitable contributions.

The new plan leaves virtually nothing of Bush's original plan to expand government funding of religious charities but increases chances of a break in the two-year deadlock that held up passage of more general legislation aimed at helping charities of all kinds.

Sen. Rick Santorum (R-Pa.), who announced the move to supporters on Capitol Hill, said Republicans have approved the change. Democrats are still considering it but are likely to go along so long as they receive assurances that controversial religious provisions are not restored in negotiations with the House over a final bill, according to a Democratic source.

If bipartisan approval is reached, the bill could be on the Senate floor early next week, according to a Senate Republican aide.
Helen Dewar Washington Post Staff Writer