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QUICK SHOT: 4 Big Policy Changes Likely to Impact Philanthropy in 2021

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By Michael J. Tomlinson, CEO and President

 

We expected 2021 to be an eventful and exciting year – and we haven’t been disappointed there! Big questions about new policies related to philanthropy loom… and we’re watching closely, waiting for answers.

I’d be willing to bet that for you, like other leaders in the nonprofit fundraising world, 2021 has been a blur. Most days are spent in overdrive, pushing through immediate projects, trying to check off top-priority boxes on a neverending to-do list.

In the background of it all, there are some major, big-picture changes predicted to impact philanthropy and charitable giving in 2021. In fact, these prospective shifts have us considering some vital questions about the future…

How will changes with postal policies and increased postal rates impact giving?

What will happen with privacy legislation, and will it change philanthropy?

How will tax law changes and charitable deductions affect nonprofits?

Many leadership organizations have moved these questions to the top of the list… putting a high priority on these questions, working hard to gather timely insights and share their best-guess predictions with the rest of the industry.

The reality is, changes in postal policy, privacy legislation and tax reform may have major implications on the health and operations of all nonprofit organizations in America, and on the state of philanthropy moving forward.

I’m encouraged by the revitalization of businesses opening and astounded by the abundant generosity that continues to flow from donors. And while I’m confident in a thriving future for our nation, I’m simultaneously aware of these major changes at play.

If you’re a nonprofit leader, the health and well-being of your mission should be your primary focus. BDI is here, fully committed to being your informational hub on these topics. With our ears to the ground, we’re dedicated to these questions and will keep you updated as new information on these policies emerges.

In that vein, I have an update for you right now! I want to share this insightful piece from Mark Micali, VP of Government Affairs with The Nonprofit Alliance (TNPA). Mark and his team have been highly involved in the moving parts of these policies and have shared this firsthand, up-to-date status report:

 

Postal Policy

We’re facing a daunting mid-year 6% to 8.5% increase in postal rates (depending on the class of mail). TNPA has been determined in its efforts to challenge this excessive rate increase.

On a recent call, Postmaster General DeJoy mentioned that he’s been hearing complaints from folks on the Hill and stakeholders about the large size of the rate increase, particularly relative to inflation. DeJoy went on to mention that there might be some delay in announcing the new rates and perhaps some reduction in the rate increase – PERHAPS – but don’t hold your breath on this.

The Postal Service had originally indicated that the announcement on the new rates would be coming out right about now – late March or early April – with the increase to take effect likely 90 days thereafter.

As has been previously reported, the long-term solution to the challenge of ever-increasing postal rates is the enactment of badly needed structural postal reform legislation.

 

National Privacy Legislation

While Congress has been focusing on the recently-passed $1.9 Trillion Aid Package, and will shortly be considering the $2.3 Trillion Infrastructure Proposal of the Administration, there hasn’t been any momentum to consider national privacy legislation.

That said, on March 11, Congresswoman Suzan DelBene (D-WA) introduced H.R. 1816, the Information Transparency & Personal Data Control Act, which incorporates a number of elements we support in terms of a robust national privacy bill:

  • A clear federal preemption of current or future state privacy statutes.
  • No private right of action, which could result in numerous, often frivolous lawsuits.
  • Litigation relative to the statute would be required to go to federal court, ensuring greater uniformity of decisions, rather than allowing a patchwork quilt of varying state legal decisions.

 

TNPA has worked closely with Congresswoman DelBene, who’s shown a genuine interest in moving a national privacy bill. Also, we’ve been in close contact with Senator Jerry Moran (R-KS), who last year introduced a robust national privacy bill, similar to Congresswoman DelBene’s bill. Senator Moran expects to introduce his bill later this year.

 

Universal Charitable Deduction

TNPA continues to press for expansion of the Universal Charitable Deduction. The deduction for 2020 was a flat $300 and was raised for 2021 to $600 for married couples filing jointly and $300 for individuals.

On March 9, a bipartisan and bicameral group of lawmakers introduced the Universal Giving Pandemic Response and Recovery Act (S. 618, H.R. 1704) that would raise the $300/$600 cap to roughly $4,000 for individuals and roughly $8,000 for married couples, extend the availability of the deduction to the 2022 tax year, and importantly, eliminate the current exclusion of gifts to Donor Advised Funds (DAFs). In the Senate, we appear to have some real momentum with Senators James Lankford (R-OK), Chris Coons (D-DE), Tim Scott (R-SC) and Jeanne Shaheen (D-NH), who have been very active among the eight cosponsors of S. 618.

While increasing the cap to the levels called for in the legislation ($4,000/$8,000) will be hard to achieve in the short run, there’s no question that the commitment of our “champions” on this issue appears to be strong, with a reasonable goal being raising the cap to $1,200 for married couples and $600 for individuals. This level of increase ($1,200/$600) was included in last fall’s Senate Republican COVID aid package, which was unable to achieve cloture (60 votes), and thus, couldn’t be considered on the Senate Floor.

 

Expanding the IRA Charitable Rollover

The House is positioned to raise the current limit from $100,000 to $130,000 on the amount an individual can contribute annually to an IRA Charitable Rollover, starting at age 70 1/2. Accordingly, TNPA is focusing on building momentum in the Senate for legislation sponsored by Senators Kevin Cramer (R-ND) and Debbie Stabenow (D-MI), S. 243, which would not only increase the cap on IRA Charitable Rollovers, but also lower the age of eligibility from 70 1/2 to 65 for establishing an IRA Charitable Rollover. Their bill now has seven cosponsors, and we will continue to push this issue on the Senate side.

Michael J. Tomlinson, CEO and President

Michael Tomlinson, better known as “MT,” is the CEO and President of BDI. With more than 25 years of executive leadership in business development and media, MT’s expertise involves leading organizations like Dr. James Dobson’s Family Talk and Dunham+Company in the ideation and execution of successful integrated marketing, broadcast and digital media, and fundraising strategies that fuel growth.

As BDI’s President, MT leads the strategic direction, ensuring that the agency is equipped with the talent, tools, and technologies to effectively serve clients long-term by reaching and cultivating loyal, heart-connected and generous financial donors.

Email MT now.

 

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