The U.S. House of Representatives has passed H.R. 4719, a group of incentives designed to spur community investment by significantly increasing charitable giving incentives.
Claiming the ability to leverage private spending for community services at better than a 2.5-to-1 ratio, the bill was largely seen as a cost-effective way to increase charitable giving and passed with bipartisan support.
The America Gives More Act of 2014 renews four temporary giving incentives that expired last December and makes them retroactive to their previous expiration date. The fifth incentive will take effect in 2015.
The first measure makes permanent and expands the deductible limit of food donations from 10 to 15 percent, guaranteeing fair market value to these donations. According to Ways and Means Committee Chairman Dave Camp’s office, “The Food Donation Connection has estimated that since this tax deduction was expanded in 2006, donations increased 127 percent.”
Hunger relief charity Feeding America forecasts that the new legislation will “significantly increase food bank access to the 70 billion pounds of nutritious food wasted each year.”
The second incentive allows individuals aged 70.5 or older to make gifts from their IRAs without incurring withdrawal penalties. The benefit of this to charities seeking donations needs no further explanation. A fourth measure will allow gifts made until the individual tax filing deadline, April 15, to be deducted in the prior year’s taxes.
The third incentive allows a deduction to be taken for a conservation land easement. Since the enhanced incentive first passed in 2006, roughly one million acres have been conserved per year with easements managed by the nation’s 1,700 community-based land trusts.
When the enhanced incentive expired last year, conservation easement enrollments were expected to decline by at least one-third.
The deduction allows landowners to place land ranging
from historical sites and family farms to forests in protected easements. According to the Land Trust Alliance, this can be done “for a fraction of the cost of buying it, making easements by far the most cost-effective approach to land conservation.”
The Alliance estimates that federal acquisition of land costs taxpayers about $12,000 an acre compared to $400 an acre for an easement.
The fifth item, which will take effect in 2015, reduces an excise on the investments of large private foundations from a rate of 2 percent to 1 percent. Of course, the less these foundations have to pay in taxes, the greater their strength and the more they can give to their charitable interests.
Thanks to the House of Representatives for their joint backing of these valuable aids to charitable giving. They seem to have learned that nonprofits provide an invaluable and unmatchable service to our communities that we can never afford to forget.
Sarah Todd is the founder of Change Pioneers and Calhoun Enterprises, providing services to organizations engaged in positive community change. She can be reached at 912-224-2120 or changepioneers@gmail.com.