Independent Sector Outlines Public-Policy Priorities

The new Congress and administration should bolster the social safety net, promote national service and charitable giving, ease lobbying restrictions on charities, and ensure that foreign-aid programs respect workers’ civil rights, according to policy proposals issued this week by Independent Sector.

The group, a coalition of big charities and foundations, urged policymakers to take action including:

• Provide adequate money for non-defense discretionary programs that reflects inflation, population growth, and increased needs. It should not come at the expense of mandatory programs like Social Security, Medicaid, or Temporary Assistance for Needy Families.
• Ensure that government contracts with nonprofit groups cover the full cost of services, including administrative overhead costs.
• Pass legislation to expand national-service programs, for example the Serve America Act that has been introduced in the Senate.
• Extend and expand legislation allowing older people to donate money from their individual retirement accounts to charity without paying taxes on it.
• End the “two-tier” excise tax on foundations’ net investment income. Under the present system, a foundation that substantially increases its distributions in a given year will also increase the five-year average used to determine its tax rate. It could then have to pay a 2-percent tax rate (instead of 1-percent) for five years. That penalizes foundations for increasing donations in times of need, the group says.
• Create a high-level office in the executive branch to coordinate education and oversight efforts of all federal agencies that provide help to nonprofit groups.
• Raise the $1-million annual limit on charity lobbying activities to at least $3-million; change the tax code to allow private foundations to support nonpartisan lobbying activities by charities.
• Ensure that federal agencies follow the Principles of International Charity that were drawn up by foundations and charities as an alternative to U.S. Treasury Department guidelines designed to prevent the diversion of charitable money to terrorism.
• Prevent the U.S Agency for International Development and other federal foreign-assistance agencies from requiring relief charities to screen employees in a way that would violate their civil rights under the Privacy Act.
• Give more money to the Internal Revenue Service for oversight and enforcement of tax laws affecting charitable organizations.