Influential House Ways and Means Committee member Rep. David Reichert (R-Wash.) told the Chronicle of Philanthropy he opposes putting a cap on the charitable deduction because doing so “would negatively affect giving.” President Obama has proposed placing a 28-percent ceiling on the deduction, but such a limit would have the effect of “raising taxes and therefore raise revenue to pay for government spending,” Reichert says. “I think that the money is better off in private hands.”
Rep. Tom Petri (R-Wisc.) introduced legislation that would give volunteers who drive their own cars to do charity work the same tax benefits for mileage reimbursements as people who drive as part of their paid jobs at a business. The proposed “Charitable Driving Tax Relief Act” would also scrap the rule that charities report mileage reimbursements to the Internal Revenue Service.
The Chinese government announced it will allow charities, business associations, and some other non-state entities to assume greater roles in dealing with that nation’s environmental problems and social ills. This is a policy reversal, because China has typically treated independent nonprofit entities—especially foreign entities—with suspicion. Li Liguo, civil affairs minister, said many nonprofits will no longer be forced to find a government sponsor to seek the official registration necessary to operate legally, raise money in China, and qualify for tax breaks.
The Direct Marketing Association blasted Charity Navigator for using new nonprofit ratings it claims are “suspect and lack credibility.” The issue is Charity Navigator’s “decision to challenge a longstanding accounting practice that allows nonprofits to count some money they spend on activities that involve fundraising, like direct mail or telemarketing campaigns, as program costs on their financial statements or [IRS] Form 990 tax filings,” the Chronicle reports. Charity Navigator says the accounting practice permits some groups to conceal high fundraising costs. DMA says it hopes to develop a system that offers a better snapshot of an organization’s effectiveness beyond the basic calculation of fundraising costs divided by revenue.
Former Detroit Mayor Kwame Kilpatrick, a Democrat, now faces a possible 20-year prison term for bribery, extortion, and racketeering. A homeless shelter operator’s donation to the then-mayor’s Kilpatrick Civic Fund in exchange for a political favor led to a federal probe that found Kilpatrick diverted hundreds of thousands of dollars from the charity to personal and political use.
No snickers: The Council on Foundations has invited Chicago’s Democratic mayor Rahm Emanuel to speak on “Building Safe Communities” at the Council’s 2013 Annual Conference. What’s next, a DC mayor to discuss ethics in government? A San Francisco mayor to speak on low taxes? A Detroit mayor to discuss economic growth?
GOLDMAN SACHS WATCH
The U.S. Supreme Court refused to consider an appeal by Goldman Sachs Group Inc. in an investor lawsuit involving mortgage-backed securities that lost value during the financial crisis of 2008. The high court left undisturbed an appeals court ruling that had favored the NECA-IBEW Health and Welfare Fund, an electrical workers’ pension fund. Goldman had argued that sustaining the appellate court decision could cost Wall Street tens of billions of dollars.