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Lobby Week: We Have a Lot of Work To Do!‎

Lobby Week: We Have a Lot of Work To Do!‎

Chapter Leadership Brief 04.23.21

By Steve Jacobson, AFP-NYC President and CEO, JCA, Inc.

Next week, April 26 – 30, is AFP Lobby Week.  It’s the time when AFP Global and AFP chapters around the country make concerted efforts to inform and educate our lawmakers on the importance of the nonprofit sector.  And, of course, part of our efforts are focused on supporting legislation that benefits nonprofits and, by extension, our varied constituencies.  Given that we are still in the midst of the COVID-19 pandemic, this year’s Lobby Week will be held virtually.  As of this writing, the AFP NYC chapter has at least five Zoom calls scheduled with our New York Representatives and Senators.

So, what are we going to talk about?  In addition to educating lawmakers on the impact of nonprofits in our area, there are three issues for which we want to see some legislative action:

Universal Charitable Deduction

Section 2204 of the CARES Act, signed into law in March 2020, permitted eligible individuals who do not itemize deductions to deduct $300 of qualified charitable contributions throughout 2020. In December 2020, Congress extended the universal charitable deduction availability through 2021 and increased the cap to $600 for joint filers. While this provided our sector with a short-term win, we really need to increase the amount that can be deducted and make it permanent.

To meet this end, a bipartisan group of senators has introduced S. 618 while a bipartisan group of representatives have introduced HR 1704.  Titled the “Universal Giving Pandemic Response and Recovery Act,” these near-identical bills call for an increase in the cap to roughly $4,000 for individuals and $8,000 for joint filers and extend the availability of the deduction through 2022.  We hope to encourage lawmakers to support the increased cap, and also to make this universal charitable deduction permanent.

Charitable IRA Rollover

Currently, individuals age 72 and above must take required minimum distributions (RMDs) from their individual retirement accounts (IRAs). And when they do, these distributions are fully taxed as income.

In 2015, Congress passed the PATH Act, which included the IRA Charitable Rollover provision that allowed individuals to make direct tax-free gifts of up to $100,000 annually to charities from their IRA starting at age 70 ½, without counting the distributions as income.

This is a great start, but AFP is working to expand the Charitable IRA Rollover and create even more giving opportunities for donors by lobbying for the IRA Legacy Act. The bill expands the IRA Charitable Rollover by allowing seniors starting at age 65 to make tax-free IRA rollovers of up to $400,000 annually to charities through a charitable gift annuity or a charitable remainder trust.

The Joint Committee on Taxation has estimated the cost to the federal government of the IRA Legacy Act at just $38 million per year. The cost is minimal because the income on any life income gift is fully taxable at ordinary income levels. However, planned giving experts have projected that the IRA Legacy Act could raise up to $1 billion each year for charities – a huge return on investment.

Postage Rate Increases/Postal Reform

Is there a more hot-button issue to nonprofits than postal reform and postage rate increases?  Actually, we’ve seen our share of hot-button issues over the past year, but mail is super-important.  Back in 2006, the Postal Accountability and Enhancement Act of 2006 was signed into law, and it limited nonprofit postal rate increases to the rate of inflation.  Not so anymore. In December 2020, the Postage Rate Commission removed the CPI-based cap and gave new ratemaking authority without limits to the USPS. Mailers now face a new, much more challenging environment of substantially larger rate increases year after year.

The Postal Service is expected to announce rate increases of 6.0% to 8.5%, depending on the class of mail, that will be implemented in the summer or fall. This pending rate increase is in addition to the 1.5% rate increase that just took effect on January 24, 2021. The long-range consequence of the new rate-making authority and the Postal Service’s financial condition could mean crushing increases over the next 4-5 years.  We need Congress to legislate an acceptable and sustainable solution to postal rate increases.

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