Posted June 1st, 2003

Planning Matters

A number of legislative, legal, and regulatory matters currently in the works may alter the way nonprofits raise funds. Here are some matters that may be most likely to affect your planned and major gift development efforts.

Do you “CARE”?

The issues addressed by the Charity Aid, Recovery, and Empowerment Act (CARE Act), approved by the Senate this spring, are currently being studied by the House of Representatives. It is expected the House will pass a bill that will be reconciled with the Senate bill before it can be signed into law. Various versions of the CARE Act have contained a number of incentives for charitable giving, including:

  • A provision that would allow persons who do not itemize other deductions to realize tax savings for a portion of their charitable gifts.
  • Exclusion from taxable income for distributions from IRAs for charitable purposes.
  • Enhanced charitable deductions for contributions of food and book inventory.
  • Expanded deductions for scientific property used for research and for computer and technology equipment.
  • Provisions to encourage gifts of real property for conservation purposes.
  • A more attractive deduction for charitable contributions of literary, musical, artistic, and scholarly composition.
  • Several other miscellaneous provisions.

For additional information on the CARE Act and its implications for nonprofits, check www.afpnet.org and www.ncpg.org.

Are you hip to HIPAA?

The Health Insurance Portability and Accountability Act (HIPAA) primarily affects health care fundraisers. Development officers may use certain demographic information for fund-raising purposes, but most other patient information is now off limits. Provisions of the Act also allow prospective donors to “opt out” of receiving future solicitations. Also discussed is the relationship between the health care provider and its development office or foundation. See www.ahp.org for more information.

Taxing matters

Provisions of the 2001 Tax Act provide for the further reduction of income and estate tax rates next year. In addition, the President has signed the Jobs and Growth Tax Relief Reconciliation Act into law. See the July issue of Give & Take for complete coverage.

Bottom line

It is important to keep abreast of legislation and regulatory activity that may affect the ways in which nonprofits approach the fund development process. In addition to reviewing periodicals that focus on tax and fund-raising information, those charged with raising funds may also find information on various Web sites, including www.senate.gov, www.irs.gov, and thomas.loc.gov.

The publisher of Give & Take is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Give & Take may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

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