DATE: October, 2003
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| "No
person was ever honored for what he received. Honor has been the reward for what
he gave." |
NEWS SOURCES | ARCHIVES OF PAST MONTHS
CARE Act Stalled in Conference Negotiations
The Senate shut down October 3 for a weeklong fall recess, but lawmakers before they left Washington were not able to reach an agreement to send a charitable giving bill to conference with additional tax provisions.
Senate
leaders had been negotiating a plan to add a series of tax items to the Senate's
version of a $12 billion charitable giving bill when the chamber sends its bill
to conference with the House. Additional items include a Senate-passed expansion
of the refundable child credit, a package of tax cuts for members of the armed
forces, and an extension of tax provisions scheduled to expire later this year,
including the work opportunity credit, the welfare-to-work credit, and the allowance
of nonrefundable personal credits against the regular and minimum tax.
From
GiftLaw.com
Non-profits start making painful cuts
Soaring demand and shrinking budgets are putting intense stress on the nation's vast non-profit sector an intricate web of hospitals, schools, social service agencies, museums and other organizations that make up about 6% of the economy.
Many of the problems stem directly from the recession, which forced millions of unemployed and uninsured to turn to charity. But the situation could get worse even if the economic rebound continues. Government spending, vital to non-profits, is under continued pressure. Foundation spending is down, private donations have waned and business costs are up.
The evolving challenges could have a broad impact. The non-profit sector employs nearly 50% more paid workers than construction and three times as many as agriculture. Not-for-profit museums, schools, theaters, schools and orchestras are economic anchors for many communities, improving the quality of life and helping attract investment.
But
for possibly the first time since the 1980's attack on the public welfare state,
non-profits face the very real prospect of significant, continuing declines in
government funding, their second-largest source of revenue. Many state and local
governments, facing budget shortfalls, have already pared back. Congress, staring
down $500-billion-plus annual deficits, is beginning to debate cuts or slower
spending in some social programs.
By Sue Kirchhoff, USA TODAY
Foundations Paying Millions Of Dollars To Their Own Well-To-Do Trustees
A new study analyzing the tax returns of 238 foundations has revealed that in a single year, they spent nearly $45 million on "trustee fees" - the vast bulk of which go to their own predominately wealthy boards of directors rather than to the charitable causes they were set up to fund.
Among the findings:
- A substantial majority of the foundations surveyed paid fees to their board trustees, including 64 percent of the large foundations and 79 percent of the smaller foundations. The amount of the trustee fees varied greatly and did not appear to depend on the size of the foundation.
- The 238 foundations surveyed paid a total of $44,891,982 in trustee fees in 1998. Of this amount, $31,054,256 was distributed to individual board members-$24,749,451 at the large foundations and $6,304,805 at the smaller foundations. The remainder, $13,837,726, went to bank trustees at 25 foundations.
- Fourteen of the large foundations paid their trustees more than $100,000 each. The largest amounts went to two trustees of the Kimbell Art Foundation ($750,000 and $747,000) and to Walter Annenberg of the Annenberg Foundation ($500,000). Three large foundations paid between $90,000 and $100,000 to each of their board members, 27 paid $50,000 or more, and 56 paid $25,000 or more.
- Five of the smaller foundations paid their trustees more than $100,000 each in fees. The highest fee, $232,619, was paid by the Ira and Doris Kukin Foundation. Four smaller institutions paid between $90,000 and $100,000 each to their board members, 16 paid $50,000 or more, and 31, or 50 percent, paid $25,000 or more.
- Based on the 990-PF's and our follow-up phone calls, we found that, with a number of notable exceptions, trustees in general spent little time on foundation business.
- The Internal Revenue Service and the state attorneys general, which have the responsibility for overseeing foundation activities, have not had the resources or, at times, the will to effectively crack down on abuses.
From the Center for Public and Nonprofit Leadership at the Georgetown Public Policy Institute
Senate Sends Charity Bill To Conference With Added Tax Provisions
Senate leaders agreed to add a series of tax items to the chamber's version of a $12 billion charitable giving bill (the CARE Act) when it instructs conferees, a senior aide to Senate Majority Leader Bill Frist, R-Tenn., said on October 1.
Additional items include a Senate-passed expansion of the refundable child credit, a package of tax cuts for members of the Armed Forces, and an extension of tax provisions scheduled to expire later this year, including the work opportunity credit, the welfare-to-work credit, and the allowance of nonrefundable personal credits against the regular and minimum tax. Frist's aide said leadership had cleared the conference instructions with Republican senators and was waiting for Democrats to clear some objections from their caucus. Senate aides suggested some senators have unrelated tax measures they want to include on the charity bill, which is seen as moving quickly through conference negotiations.
Senate Finance Committee members Olympia J. Snowe, R-Maine, and Blanche L. Lincoln, D-Ark., had sponsored the plan to attach a Senate proposal to advance to 2003 the refundable credit to low-income individuals, raise the phaseout threshold, provide a single tax code definition of a child, and extend Customs user fees.
Senate Republican Conference Chair and Finance Committee member Rick Santorum, R-Pa., said he agreed to the proposal to move the charitable giving bill to conference. He said the final conference report would not include the Senate-passed child credit language. Frist informed Santorum he would serve as a conferee.
House
Ways and Means Committee Chair William M. Thomas, R- Calif., said he was aware
of the Senate's plan to package the items together and deflected questions about
it, saying "that's the Senate."
GiftLaw.com
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Revised: November 3, 2003 9:34.