Senate-Passed Stimulus Bill Does Not Include Philanthropy Measures

Feb. 11, 2009, Washington, The Chronicle of Philanthropy — The economic-stimulus package passed by the Senate today does not include a number of measures that nonprofit and foundation leaders had proposed to help ease the impact of the recession on the philanthropic world.

As these provisions were also left out of the House bill, the chances that they will be included in the final stimulus package are slim.

They include:

* A $15-billion bridge-loan fund that was proposed by Independent Sector, a coalition of charities and foundations. The coalition says the money is needed to help charities that receive late payments from cash-strapped state governments while also facing a tight credit market.

* A “flat” excise tax for private foundations, instead of one that varies between 1 percent and 2 percent, pushed by both Independent Sector and the Council of Foundations. The groups say the current system penalizes foundations that substantially increase their distributions in a given year, thus affecting the five-year average used to determine their tax rate.

* A measure proposed by the Council on Foundations to allow people who qualify to transfer money from their individual retirement accounts to charity tax-free to give it to donor-advised funds. Under current law, charities can receive such gifts — but not donor-advised funds, which allow people to put money into account and distribute it over time.

* An increase in the tax deduction for people who use their vehicles to volunteer, which is much lower than the business mileage deduction. Sen. Charles E. Grassley, Republican of Iowa, had worked to include that provision in the stimulus package, but he did not succeed.

The Senate and House must now reconcile differences in their versions of the stimulus package. The Council on Foundations will continue pushing to get the measures on the excise tax and individual retirement account into the final package, says Rodney Emory, vice president of government relations.

“Our game plan is to maximize all we can in this opportunity, and if it doesn’t present itself, to look for other vehicles in legislative calendar in 2009,” he says.

Independent Sector says the bridge-loan fund is critical, and it will continue to fight for it if it does not end up in the stimulus package.

Senator Grassley, the senior Republican on the Senate Finance Committee, had hoped to insert an alternative to the fund in the Senate stimulus bill, but it was not adopted. That amendment would have required states to pay any money they owe charities for running programs like foster care or homeless shelters before states could receive their share of the bill’s federal funds.

Mr. Grassley and Sen. Jeff Bingaman, a New Mexico Democrat, also sought but failed to amend the economic stimulus package with a pair of provisions that focus on how much hospitals do to provide services to patients at little or no cost.

One amendment would have required that several federal bodies work to develop a single, uniform definition of uncompensated care and charity care.

The other amendment would have required the IRS to study the activities of for-profit hospitals and focus on the amount of uncompensated care they provide.

Senator Grassley, who is a member of the House-Senate conference committee that will now work to reconcile the bill, will try to revive his proposals during the upcoming negotiations, said Jill Gerber, a spokeswoman for Mr. Grassley.