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Nonprofits Offer Disaster Relief Ideas to Senate Task Force

JUN. 13, 2019

Nonprofits Offer Disaster Relief Ideas to Senate Task Force

DATED JUN. 13, 2019
DOCUMENT ATTRIBUTES
  • Institutional Authors
    National Council of Nonprofits
    Foraker Group
    Alliance of Arizona Nonprofits
    California Association of Nonprofits
    Colorado Nonprofit Association
    CT Community Nonprofit Alliance
    Delaware Alliance for Nonprofit Advancement
    Florida Nonprofit Alliance
    Georgia Center for Nonprofits
    Hawaii Alliance of Nonprofit Organizations
    Idaho Nonprofit Center
    Forefront
    Nonprofit Association of the Midlands
    Nonprofit Connect
    Kentucky Nonprofit Network
    Louisiana Association of Nonprofit Organizations
    Maine Association of Nonprofits
    Maryland Nonprofits
    Providers’ Council
    Michigan Nonprofit Association
    Minnesota Council of Nonprofits
    Mississippi Alliance of Nonprofits and Philanthropy
    Montana Nonprofit Association
    New Hampshire Center for Nonprofits
    Center for Non-Profits
    New Mexico Thrives
    New York Council of Nonprofits
    Nonprofit Coordinating Committee of New York
    North Carolina Center for Nonprofits
    North Dakota Association of Nonprofit Organizations
    Ohio Association of Nonprofit Organizations
    Oklahoma Center for Nonprofits
    Nonprofit Association of Oregon
    Pennsylvania Association of Nonprofit Organizations
    Together SC
    Momentum Nonprofit Partners
    Utah Nonprofits Association
    Common Good Vermont
    Center for Nonprofit Advancement
    Washington Nonprofits
    West Virginia Nonprofit Association
    Wyoming Nonprofit Network
  • Subject Area/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2019-34753
  • Tax Analysts Electronic Citation
    2019 TNTF 177-23
    2019 EOR 10-43
  • Magazine Citation
    The Exempt Organization Tax Review, Oct. 2019, p. 389
    84 Exempt Org. Tax Rev. 389 (2019)
    The Exempt Organization Tax Review, Oct. 2019, p. 389
    84 Exempt Org. Tax Rev. 389 (2019)

June 13, 2019

The Honorable Richard Burr
217 Russell Senate Office Building
United States Senate
Washington, DC 20510

The Honorable Michael Bennet
261 Russell Senate Office Building
United States Senate
Washington, DC 20510

The Honorable Johnny Isakson
131 Russell Senate Office Building
United States Senate
Washington, DC 20510

The Honorable Maria Cantwell
511 Hart Senate Office Building
United States Senate
Washington, DC 20510

RE: Nonprofit Recommendations for a Disaster Relief and Recovery Tax Package

Dear Senators Burr, Bennet, Isakson, and Cantwell,

Thank you for taking on the task of determining how best to use the federal tax code to relieve suffering and promote recovery efforts after natural disasters strike. Your task is a critical contribution to disaster preparedness that can benefit the victims of all future disasters and ease the increased strain on local charitable organizations that engage in disaster relief and recovery efforts.

We write to endorse and encourage your adoption of the four specific recommendations to the Taskforce submitted by the North Carolina Center for Nonprofits on June 5. Initially proposed by our colleague state association of nonprofits in North Carolina, the recommendations are based on experiences of many of our organizations in dealing with disaster relief and recovery activities across the country. Combined, the four common-sense recommendations will eliminate uncertainty and remove barriers to nonprofit success in helping our fellow residents rebuild their lives and assisting our communities to come together to develop local solutions.

Before addressing the four recommendations, we highlight that while natural disasters are typically regional in scope, they occur throughout the United States in many different forms. The Atlantic and Gulf Coast states have extensive experiences dealing with the aftermath of hurricanes. The Midwest has tornadoes and floods. Western states deal with the ravages of wildfires, mudslides, earthquakes, and even tsunamis and volcanic eruptions.

The good news is that wherever disasters strike, charitable nonprofits respond to help people through the trauma and provide a platform for those wanting to help. Federal and state money may be slow in arriving, but nonprofits wade in immediately to provide relief. More lasting assistance may be coming, but the charitable organizations in the community already know the recovery needs of their neighbors and take action right away and continue for the long term. The undersigned organizations often serve as connectors and conveners of other nonprofits in the immediate hours of a disaster, as well as down the line as the full impact of loss is understood. We share the collective experiences of our organizations to inform your work and improve your final product.

As your Taskforce considers development of “a core package of tax relief provisions that should be available when natural disasters strike,” we urge you to adopt the following recommendations to enable tax policy to truly support victims of disasters and the vital work of charitable organizations in times of great need.

1. IRS Filing Deadlines: Any disaster relief and recovery tax package should include language granting automatic extensions for tax filing deadlines for nonprofit organizations, other businesses, and individuals without requiring a statement from the IRS or Congress. Nonprofits engaged in immediate disaster-relief work shouldn't have to divert attention and personnel from the crisis at hand to scour reports to determine if a deadline has been extended.

2. Employer Tax Credits: Many recent tax relief packages have included a provision granting income tax credits to employers that maintain employee income during disaster-related shutdowns. Nonprofits, representing 10 percent of America's private workforce, generally are unable to utilize these tax credits because they are exempt from the income taxes to which the credits apply. We ask the Taskforce Members to extend the tax-credit provision to the taxes that nonprofits do pay, namely payroll and other taxes.

3. Disaster Relief and Recovery: We ask Taskforce Members to broaden tax provisions in the package you recommend to ensure that incentives apply not just to immediate disaster “relief” efforts, but also to disaster “recovery” activities. This matters because the housing and feeding of victims of disaster may extend for many months or even years after the event. Likewise, many nonprofits find their own facilities destroyed, “under water,” or otherwise unusable as a result of the disaster and must commence their own recovery efforts while simultaneously providing immediate relief in their communities.

4. Temporary Universal or Non-Itemizer Deduction: Our final recommendation is the creation of a temporary, targeted universal or non-itemizer deduction that would enable all taxpayers to receive a charitable giving tax incentive when they donate to disaster relief and recovery efforts. Disaster tax packages normally remove the giving cap of 50 percent of Adjusted Gross Income (now 60 percent of Adjusted Gross Income after the enactment of the Tax Cuts and Jobs Act in 2017) to incentivize greater giving in the aftermath of disasters. The increase in the standard deduction in the 2017 tax law means that only the 10 to 12 percent of taxpayers who itemize will see a difference when they contribute to relief and recovery work. Many more people experience a desire to give to these efforts and make small donations via their phone or online. The lack of a tax incentive for those who do not itemize means that most of these donations will remain very small. We believe that an above-the-line charitable deduction that is temporary (e.g., for six months after the disaster declaration) and targeted (i.e., available only to the charitable organizations engaged in relief and recovery in the designated disaster area) would enable all taxpayers to support their fellow Americans throughout the country in an immediate and responsible way.

We thank the Members of the Taskforce for working to improve disaster preparedness. We stand ready to provide examples of our work, answer questions about these recommendations, and promote passage of legislation that advances the goals discussed throughout this letter.

Sincerely,

David L. Thompson
National Council of Nonprofits
Washington, DC

Alaska
Foraker Group

Arizona
Alliance of Arizona Nonprofits

California
California Association of Nonprofits

Colorado
Colorado Nonprofit Association

Connecticut
CT Community Nonprofit Alliance

Delaware
Delaware Alliance for Nonprofit Advancement

Florida
Florida Nonprofit Alliance

Georgia
Georgia Center for Nonprofits

Hawai'i
Hawai'i Alliance of Nonprofit Organizations

Idaho
Idaho Nonprofit Center

Illinois
Forefront

Iowa
Nonprofit Association of the Midlands

Kansas
Nonprofit Connect

Kentucky
Kentucky Nonprofit Network

Louisiana
Louisiana Association of Nonprofit Organizations

Maine
Maine Association of Nonprofits

Maryland
Maryland Nonprofits

Massachusetts
Providers' Council

Michigan
Michigan Nonprofit Association

Minnesota
Minnesota Council of Nonprofits

Mississippi
Mississippi Alliance of Nonprofits and Philanthropy

Missouri
Nonprofit Connect

Montana
Montana Nonprofit Association

Nebraska
Nonprofit Association of the Midlands

New Hampshire
New Hampshire Center for Nonprofits

New Jersey
Center for Non-Profits

New Mexico
New Mexico Thrives

New York
New York Council of Nonprofits
Nonprofit Coordinating Committee of New York d/b/a Nonprofit New York

North Carolina
North Carolina Center for Nonprofits

North Dakota
North Dakota Association of Nonprofit Organizations

Ohio
Ohio Association of Nonprofit Organizations

Oklahoma
Oklahoma Center for Nonprofits

Oregon
Nonprofit Association of Oregon

Pennsylvania
Pennsylvania Association of Nonprofit Organizations

South Carolina
Together SC

Tennessee
Momentum Nonprofit Partners

Utah
Utah Nonprofits Association

Vermont
Common Good Vermont

Virginia
Center for Nonprofit Advancement

Washington
Washington Nonprofits

West Virginia
West Virginia Nonprofit Association

Wyoming
Wyoming Nonprofit Network

Contact:
David L. Thompson, Vice President of Public Policy, National Council of Nonprofits, 1001 G Street, NW, Suite 700 East, Washington, DC 20001, dthompson@councilofnonprofits.org, 202-962-0322.

DOCUMENT ATTRIBUTES
  • Institutional Authors
    National Council of Nonprofits
    Foraker Group
    Alliance of Arizona Nonprofits
    California Association of Nonprofits
    Colorado Nonprofit Association
    CT Community Nonprofit Alliance
    Delaware Alliance for Nonprofit Advancement
    Florida Nonprofit Alliance
    Georgia Center for Nonprofits
    Hawaii Alliance of Nonprofit Organizations
    Idaho Nonprofit Center
    Forefront
    Nonprofit Association of the Midlands
    Nonprofit Connect
    Kentucky Nonprofit Network
    Louisiana Association of Nonprofit Organizations
    Maine Association of Nonprofits
    Maryland Nonprofits
    Providers’ Council
    Michigan Nonprofit Association
    Minnesota Council of Nonprofits
    Mississippi Alliance of Nonprofits and Philanthropy
    Montana Nonprofit Association
    New Hampshire Center for Nonprofits
    Center for Non-Profits
    New Mexico Thrives
    New York Council of Nonprofits
    Nonprofit Coordinating Committee of New York
    North Carolina Center for Nonprofits
    North Dakota Association of Nonprofit Organizations
    Ohio Association of Nonprofit Organizations
    Oklahoma Center for Nonprofits
    Nonprofit Association of Oregon
    Pennsylvania Association of Nonprofit Organizations
    Together SC
    Momentum Nonprofit Partners
    Utah Nonprofits Association
    Common Good Vermont
    Center for Nonprofit Advancement
    Washington Nonprofits
    West Virginia Nonprofit Association
    Wyoming Nonprofit Network
  • Subject Area/Tax Topics
  • Jurisdictions
  • Tax Analysts Document Number
    2019-34753
  • Tax Analysts Electronic Citation
    2019 TNTF 177-23
    2019 EOR 10-43
  • Magazine Citation
    The Exempt Organization Tax Review, Oct. 2019, p. 389
    84 Exempt Org. Tax Rev. 389 (2019)
    The Exempt Organization Tax Review, Oct. 2019, p. 389
    84 Exempt Org. Tax Rev. 389 (2019)
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