Kari McCann Boutell, Iowa Council of Foundations President
As the dust settles on the tax reform bill, I wanted to point out key provisions that will likely impact community foundations.
Briefly, doubling the standard deduction and eliminating or reducing other credits and deductions is projected to result in 95% of current itemizers no longer using that schedule. What does this mean for your organization and those you support? We don’t know for sure but we do know that tax policy plays a major incentive for charitable giving and are afraid of how those donations might fall. Additionally, the exemption from the federal estate tax was doubled to about $22 million for couples.
Three positive items to note: the Johnson Amendment stands, prohibiting political activity by nonprofits; no changes were made to donor advised funds; and donors can receive a tax deduction for cash gifts of up to 60% of their adjusted gross income, up from the current 50% limit.
As we look to next year, we’ll be heading to Washington for Foundations on the Hill, where we will talk about a number of ways to mitigate the damage to charitable giving that we anticipate:
- Allow IRA assets to be given to donor advised funds;
- Decrease the IRA charitable rollover age to 59 ½; and
- Create an above the line, universal deduction for charitable gifts.
It will be a critical year, please consider joining your philanthropy colleagues from across the country on March 12 – 14 for Foundations on the Hill. You can find more information here.