DATE: October, 2002

NEWS SOURCES | ARCHIVES OF PAST MONTHS

Giving USA Update' Reveals Itemized Contributions Rose 6 Percent in 2000

Americans who claimed charitable contributions on their federal income taxes reported giving an average of $3,636 per tax in 2000, according to the latest Giving USA Update from the AAFRC Trust for Philanthropy ( http://www.aafrc.org/ ).

The 2000 figure is an increase of 6 percent above the national average amount for 1999 ($3,441). The third quarter 2002 Giving USA Update shows the growth in itemized charitable giving and giving reported for each state from 1996 to 2000. The overall growth in 2000 was driven in part by giving in New England states, where the average amount itemized jumped more than $470 per return, reaching $3,391 in 2000. Filers in Pacific states reported the second-highest level of increase, with growth of 10 percent in the average amount claimed per return with itemized gifts. The other seven regions showed increases ranging from 2 percent to 5 percent from 1999 to 2000.

The Update examines nine measures of giving in each state, including average amount claimed in charitable gifts, itemized gifts as a share of estimated income by income group, percentage of tax returns with itemized deductions for charitable gifts, and giving by very high income tax filers. The report finds that itemized deductions as a share of estimated income considerably exceed national averages in Utah and in six Southern states: Alabama, Arkansas, Mississippi, Oklahoma, South Carolina, and Tennessee.
From Philanthropy News Digest

The "Top Ten" Investment Scams of the Year

The North American Securities Administrators Association (NASAA) issues a report each year regarding investment scams. For the first time, charitable gift annuities appeared on the list, ranking number eight out of ten. The inclusion in the report was the result of two Arizona organizations that defaulted on their gift annuity payments.

Mid-America Foundation, one of the two, used financial planners, accountants, and insurance agents, to issue $54 million in gift annuities. According to reports, the chief executive of the organization purchased real estate and amassed significant gambling losses with the proceeds. NASAA noted that while "most annuities offered by charitable organizations are legitimate investments, investors should be cautious of little-known organizations or those that provide only sketchy information."

“Record-low interest rates and a bear market on Wall Street have created a bull market in fraud on Main Street,” said Joseph Borg, president of NASAA and director of the Alabama Securities Commission. “Con artists know investors are concerned about the volatile stock market and low yields on bonds and bank deposits, so they pitch their scams as safe alternatives and promise high returns – an impossible combination.”

It is important to note that charitable gift annuities have been issued in the US for almost two hundred years and have an admirable record of prompt payments. However, abuses can occur when investors or their agents do not do proper due diligence.
North American Securities Administrators Association

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Wills

Although the percentage of Americans with wills has increased slightly in the past year, the majority of Americans still do not have a will, says a new survey. This potentially leaves them without any say over issues involving their assets or care of any minor children after they die.

The new survey by the legal Web site FindLaw found that only 44.4% of American adults currently have a will; 53.3% said they do not have a will, while 2.2% did not know or had no response. The percentage of Americans with wills is up slightly three-and-a-half percentage points from a year ago (August 2001) when an identical survey found that 40.8% of American adults had a will. A number of high-profile events in the past year have raised awareness of estate planning issues. These include landmark passage of estate tax reforms and the legal battle over the last wishes of baseball Hall-of-Famer Ted Williams.

"Sometimes the people who seem to need a will the least actually need it the most," said James Kosakow, an attorney in Westport, Connecticut, specializing in estate planning. "If you have any assets you would like distributed in a particular manner, have minor children, or have any wishes you would like carried out after your death, having a proper estate plan can help ensure your wishes are carried out. Without a will, you may end up without any say over how the assets of your estate are distributed. For example, people in nontraditional relationships, such as couples living together or same-sex couples, may need a will to ensure proper passing of assets and to avoid estate taxes. Similarly, married couples who are non-U.S. citizens face different estate tax rules than U.S. citizens. Couples with children, particularly children from previous marriages, may need a will to ensure the desired distribution of assets."

The results of the national survey of 1,000 adults have a margin of error of plus-or-minus three percent.
Press release FindLaw

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Group May Estimate Effects of Tax Cuts

WASHINGTON, Sept. 17 - Without attracting much attention, Republicans are on the verge of achieving a cherished goal: official assessments of whether proposed tax cuts will help the economy and ultimately pay for themselves by generating more revenue for the government.

For years, supply-side economists have argued that the current system of evaluating tax cuts overstates the expense to the federal budget by looking only at lost revenue and not taking into account benefits like increased output and jobs. Members of both parties now say Republicans seem about to get much of what they want from the official arbiter of tax cuts, the nonpartisan staff of Congress's Joint Committee on Taxation.

With budget deficits mounting and the economy continuing to struggle, such ammunition could be vital to Congressional Republicans and President Bush in promoting their tax-cutting agenda in coming years.

The new reports will supplement but not replace the current system under which the committee provides official estimates of what a tax cut will cost in lost revenue without calculating the long-term economic effects. But members of both parties said the new reports would be a big step toward what supply-siders have sought for years, a "dynamic scoring" system that incorporates offsetting revenue gains in calculating the cost of tax cuts.
From New York Times By RICHARD W. STEVENSON

Republicans Delay Plan for New Tax Cuts

WASHINGTON, Sept. 19 - Republican leaders in the House have decided against pushing for a new round of tax cuts to help investors, effectively killing for this year a proposal floated last month by President Bush, Congressional aides said today.

Judging that there is not enough time or political support to pass additional tax cuts before Congress goes home to campaign next month, Republican leaders have decided to shelve the idea for now and revisit it next year, the aides said.

Mitchell E. Daniels Jr., the director of the White House's Office of Management and Budget, said on Wednesday that Mr. Bush had been trying to develop a plan that would be economically effective, politically feasible and fiscally responsible, but had not yet found one.
From New York Times By RICHARD W. STEVENSON

Update on Care Bill - Charity Aid, Recovery and Empowerment Act

The CARE Bill appears stuck in committee without much hope of getting to the Senate floor. A recent news conference indicated the Bill faces a major challenge. While Senate Majority Leader Thomas Daschle (D-SD)had pledged that he would guide the bill to a vote, Democrats in the Senate appear unable to come to a consensus.

As Democratic Senator Joseph Lieberman stated, "But for reasons that are sometimes clear and sometimes not, some of our colleagues are holding up action on this constructive legislation. Some who are objecting have not disclosed their identity. They are preventing us from reaching an agreement to bring the bill to the Senate floor."