Monthly Archives: February 2017

Charitable Giving: Potential Changes Ahead

On February 16, Aronson’s Craig Stevens participated with the Charitable Giving Coalition (CGC) at the 100 years of Giving Fly-In Day to mark 2017 as the 100th anniversary of the charitable tax deduction. The group met with Senate and House representatives from Virginia and West Virginia to discuss tax reform and how the charitable contribution deduction might be affected.

The CGC was formed in 2009 in response to proposals at the time from the Obama Administration and Members of Congress, which would have limited the tax deduction for charitable contributions. Currently, Jason Lee the interim President of the Association of Fundraising Professionals leads the CGC. Furthermore, the Coalition is:

  • A unique, unified voice representing a broad cross-section of nonprofit organizations from across the country.
  • Comprised of more than 175 organizations, including individual nonprofit organizations, large national and international charities, and several associations and umbrella groups that represent the charitable sector.
  • Dedicated to preserving a charitable giving incentive that ensures our nation’s charities receive the funds necessary to fulfill their essential philanthropic missions.

Americans are typically generous, contributing almost $265 billion to charities in 2015 per Giving USA. At the meeting, the group recommended that Congress adopt a universal charitable deduction available to all taxpayers as an “ above the line “ amount before arriving at adjusted gross income such as IRA deductions or even alimony. This would be a shift from current policy where charitable contributions are treated as an itemized deduction that can only be utilized by a taxpayer if they exceed the standard deduction allowed. The House blueprint and President Trump’s tax plan would vastly increase the standard deduction, and reduce the number of taxpayers who itemize from approximately 30% of taxpayers to 5% of taxpayers. The proposed Trump plan also places a hard cap on itemized deductions at $100,000 for individuals and $200,000 for married filing joint. The American Enterprise Institute estimated President Trump’s plan could eliminate more than $17 billion in annual giving. If the plan succeeds, the nonprofits that support every facet of life in our communities such as education, research, health services, housing and shelter, job training, arts, culture, environmental protection, historic conservation and preservation, civil rights, and more will be negatively impacted.

For more information, please visit http://protectgiving.org/. Stay tuned for updates on tax reform under the new administration.

Congressional Gift Rules, What to Know

gift rules

​​Associations and their members work with Congress on a regular basis. However, a simple offer to provide tickets to a sporting event or a nice bottle of wine around the holidays could have unintended consequences. Make sure you have a general knowledge of the rules to mitigate any potential problems that may arise through the course of business.

A summary of the House gift rule can be found here. The rule provides the following provision on acceptable gifts, and 23 other provisions that describe additional gift situations.

  • A Member, officer, or employee may not accept a gift from a registered lobbyist, agent, or a foreign principal or private entity that retains or employs such individuals. Definitions of the terms registered lobbyist and agent of a foreign principal are provided under “Definitions of Registered Lobbyist and Agent of a Foreign Principal.” Specifically number 22.
  • A Member, officer, or employee may accept from any other source virtually any gift valued below $50, with a limitation of less than $100 in gifts from any single source in a calendar year. Gifts having a value of less than $10 do not count toward the annual limit.
  • The other 23 categories of acceptable gifts are descriptive categories, not tied to any specific dollar figure. A few of the categories are informational materials, commemorative items, and free attendance at certain kinds of events.

A summary of the Senate gifts rule can be found here. Below are a few points to keep in mind.

  • No Member, officer, or employee shall knowingly accept a gift except as provided by the gifts rule.
  • A Member, officer, or employee may accept a gift, other than cash or cash equivalent, having a value of less than $50, provided that the source of the gift is not a registered lobbyist, foreign agent, or private entity that retains or employs such individuals. The cumulative value of gifts that may be accepted from any one source in a calendar year must be less than $100. Generally, gifts having a value of less than $10 do not count toward the annual limit. See Senate Rule 35.1(a).

To avoid potential problems, organizations and their members should review the general rules and know the constraints and limits of the Congress members they work with. For more information, visit the sites mentioned above or contact Aronson’s Nonprofit and Association Industry Services Group at 301.231.6200.

Alternative Donation Sources for Nonprofits

donation

Chase Magnuson has spent many years working to secure real estate donations on behalf of George Washington University and many others. His work and expertise is captured in a book written with business colleague Dennis Haber, Esq, The Secret Power Behind Real Estate Donations.

Chase believes it is foolish for charities to not seek real estate gifts for their causes as over 45% of the nation’s wealth is in real estate.

Here is a reason that charities may shy away from such gifts “We have this donor who wants to give us a property worth $3 Million but we can’t accept it because it will cost us $5,000 a month to carry it until we can find a buyer”. The book explains why this thinking is rash.

While often complicated, opening up a charity to real estate possibilities creates a new horizon of potential funding for organizations from the asset class where most people’s wealth is held. Donors should consider these five main arrangements to meet their giving needs:

  • Outright Gift
  • Bargain Sale
  • Retained Life Estate
  • Charitable Remainder Trust (could take several forms CRAT, CRUT, NIMCRUT )
  • Charitable Gift Annuity

Real Estate donors should make decisions based on their individual situation and their need for cash flow. Bargain Sales, Charitable Remainder Trusts, and Charitable Gift Annuities will presumably all provide either immediate or regular cash flow over time to the donor, along with an immediate tax deduction and other benefits. Such arrangements can be complex but charities should devote time to learning how they might benefit from real estate donations rather than missing a huge source of funding.

Visit here for book information.

 

Are you Part of a Trade Association? Membership Options for Government Employees

conflicts of interest

While many government employees benefit from professional association membership, federal and state statutes may prohibit or limit the reimbursement of annual dues or registration fees such memberships require. According to 5 U.S.C. 5757(a), federal agencies may only pay the expenses required for licensure within a particular profession. Moreover, agencies cannot pay the expenses for professional association membership unless membership is required for obtaining a professional license or certification. Therefore, a significant population of the government workforce that may benefit from joining an association elect not to if they are financially responsible.

In a targeted effort to increase association participation from government employees, several associations are developing alternative membership categories including free memberships and group memberships. For example, certain associations offer a membership category aimed at government employees that allows free membership for three years. After the three-year period, members can continue their participation as paying members or stop participating.

Alternatively, group memberships allow small groups to join rather than an individual. This membership strategy may alleviate some of cost associated with individual memberships. Smaller associations whose main revenue source is membership dues may benefit the most from group memberships.

This set of untapped government employees remains an appealing membership target for associations of all sizes. Determining an appropriate strategy to increase membership among this group is key to any association’s long-term growth.

For more information visit here or contact Mark Robins, CPA, at 301.231.6200.

Salute to Association Excellence – Awards Luncheon

awards

Aronson is pleased to sponsor the Association Trends Salute to Association Excellence luncheon on February 23, 2017, at the Capital Hilton in Washington, DC. Celebrating its 38th anniversary, this annual awards luncheon honors the brightest stars of the association community and their commitment to excellence. Honorees include Association Executive of the Year, Association Partner of the Year, Young & Aspiring Association Executives, Leading Association Lobbyists, and All Media Contest Winners.

This year’s Association Executive of the Year is Dawn Sweeney, CEO of the National Restaurant Association. To learn more about Dawn and her work at the National Restaurant Association, visit here.

The awards luncheon draws a crowd of over 500 leading association professionals each year. Come to mix, mingle, network, and honor members of the association community!

For event information, visit here.

To learn more about Aronson’s Nonprofit and Association Group, visit here.

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