The CHARITY (Charities Helping Americans Regularly Throughout the Year) Act would build on several charitable provisions from the PATH (Protecting Against Tax Hikes) Act of 2015. These new provisions would expand charitable giving opportunities and reduce expenses for private foundations, which could enable increased grantmaking.
We support the CHARITY Act because it helps nonprofits improve the quality of life for Americans as follows:
- Encourages volunteerism by increasing the amount per mile that nonprofits can reimburse volunteers for driving their own vehicles
- Increases public access to nonprofits’ information and reduces administrative costs by requiring electronic filing of Form 990
- Values nonprofits’ services to communities by affirming the Senate’s support for protecting the charitable deduction
- Supports increased charitable giving by allowing tax-free IRA gifts from seniors to Donor Advised Funds (DAF).
- Supports increased grant-making by setting a flat one percent tax rate on private foundations' investments.
The CHARITY Act would do the following:
- Align the volunteer mileage rate (always $0.14) to the annually adjusted rate for medical and moving purposes (currently $0.19).
- Require electronic filing by Form 990 filers (allows the IRS to delay implementation for 2 years to assist small organizations and 990-T filers).
- Allow seniors 70 ½ and older to make tax-free distributions from their Individual Retirement Accounts to Donor Advised Funds (DAF).
- Reduce the excise tax on the investment income of private foundations from 2 percent to 1 percent.
- Request a sense of the Senate that the charitable deduction will not be diminished during comprehensive tax reform.
- Exempt certain philanthropic holdings from the excess business holding tax on private foundations.
- Click here to read the full text of the bill.