The proliferation of for-profit companies in philanthropy-led by Fidelity Investments-spurred the Council on Foundations and leaders of some of the nation's top charities to hold meetings on March 31 with a Treasury Department official and the staff of a congressional tax-writing committee. The meetings were intended to investigate proposing legislation to restrict investment managers' ability to establish these charities. The legislation being discussed would create rules for commercially related charities such as those applied to public charities and private foundations.
The Campaign Reform and Election Integrity Act (H.R. 3485), a provision that would have required nonprofits to annually ask for consent from their members to use their funds for "political activity" was defeated in the House of Representatives. This would have directly affected nonprofits' ability to advocate for or against federal laws and regulations, as "political activity" was defined as activities to influence elections, federal legislation, federal regulations, or educating individuals about candidates for federal office or about federal legislation, law, or regulations. This bill was an effort to stop the laundering of political campaign contributions through nonprofit organizations to pay for issue ads before elections.
Internal Revenue Code Section 170(e)(5) allowing donors to take full charitable deduction for gifts of publicly traded stock to private foundations is set to expire again on June 30. The Council's legislative staff has held several important meetings with Congressmen Charles Rangel (D-NY), Rob Portman (R-OH) and Dave Camp (R-MI) to encourage legislation making the provision permanent (H.R. 519/S. 194). Meetings are also planned with aides to Representatives Ben Cardin (D-MD), Nancy Johnson (R-CT), and House Ways and Means Committee Chair William Archer (R-TX). Meetings are also in the works with staff of Senators John Chafee (R-RI), Daniel Patrick Moynihan (D-NY), and Alfonse D'Amato (R-NY).