IRF Update - June 23, 2010

New Oklahoma Charitable Solicitation Law Exempts IRFs

As of July 1, 2011, institutionally related foundations will be exempt from charitable solicitation registration and reporting requirements in Oklahoma.

The Oklahoma Legislature passed and Gov. Brad Henry recently signed the Oklahoma Solicitation of Charitable Contributions Act (S.B. 1070 (PDF)), a bill that updates the state's charitable solicitation law. The Oklahoma State University Foundation and CASE were successful in convincing lawmakers to amend the bill as follows (our suggested changes are bolded):

2. Educational institutions which that have a faculty, regularly enrolled students and offer courses of study leading to the granting of recognized degrees when solicitations of contributions are primarily confined to its student body and their families, alumni, faculty and trustees and any 501(c)(3) organization authorized by and having an established identity with such institutions;

In order to achieve passage, Oklahoma lawmakers agreed to make the effective date July 1, 2011.

CASE thanks Brandon Meyer, vice president and general counsel at the Oklahoma State University Foundation, for his hard work on this issue. CASE will continue to encourage states to exempt IRFs from charitable solicitation registration and reporting requirements. For additional information and resources on state charitable solicitation laws, visit the CASE website.

The conference is designed for foundation presidents, chief executive officers, chief financial officers, chief operating officers, counsels and other foundation executives affiliated with four-year and two-year public colleges and universities. It's an ideal opportunity to connect with colleagues and bring back new ideas and strategies to your foundation. CASE will offer CPE credit for particular sessions and the conference will again include special programs and sessions for community college foundation staff.

To register and receive the discount, please fax the registration form (PDF) to 202-624-1766 or call 202-624-1769. Be sure to note the 10% discount. You must register by June 30 to receive your discount. Hotel information for the 2011 conference is available on the CASE website. We hope to see you in Phoenix!

Report: Charitable Giving in U.S. Continues Decline in 2009

"Giving USA 2010" reports that the decline in overall giving reflects the continued recession in 2009, which particularly affected education, arts, foundations and other charitable recipients that typically receive contributions for new buildings, endowment campaigns and long-term planning.

Despite the overall drop, charities that provide immediate services, such as human services, health and international aid, saw an increase in contributions.

"This focus on vital needs is consistent with what historians tell us happened during the Great Depression," says Patrick Rooney, executive director of the Center on Philanthropy, which is a research partner of Giving USA Foundation.

Other key findings:

• Total giving has increased in current dollars in every year but two: 1987 and 2009.
• Individual giving fell an estimated 0.4 percent in 2009 (no change adjusted for inflation). Reports suggest that individual contributions increased toward the end of the year as stock market indices rose and media coverage highlighted the needs faced by charitable organizations.
• Giving to education declined for the second consecutive year in 2009. The change is estimated to be -3.6 percent in 2009 and -5.4 percent in 2008. The two-year change, since 2007, is a drop of 8.8 percent.
• As has been the case for 55 years, religion received the largest share of contributions with 33 percent of the total. Education received the second-highest share at 13 percent of the total.

According to the report, history suggests that giving will increase as the economy recovers, although growth in giving is likely to lag economic growth by a year or more. After prior recessions, giving took three to five years to attain pre-recession, inflation-adjusted levels.

On June 16, an attempt in the Senate to proceed to a final vote on the bill failed to get the necessary 60 votes. In response, Senate Democratic leaders have scaled back some of the bill's high-cost provisions in the hopes of securing passage of H.R. 4213. It is unclear if and when the Senate will proceed to a final vote on the scaled-back bill.

Prior to its expiration on Dec. 31, 2009, the IRA charitable rollover allowed taxpayers age 70 ½ or older to direct up to $100,000 annually from their individual retirement accounts to eligible charities, including colleges, universities and independent schools, without having to count the distribution as income for tax purposes. If enacted, H.R. 4213 would retroactively extend the IRA charitable rollover for one year-from Jan. 1 to Dec. 31, 2010.

The overall cost of H.R. 4213, combined with the fact that a significant portion of the bill is not revenue-neutral, is making it difficult for Democratic leaders to secure the votes needed in the Senate. Though the IRA charitable rollover extension would be paid for, the bill also includes a number of provisions that are not offset, including an extension of unemployment and health benefits.

If the Senate passes the scaled-back version of H.R. 4213, the amended bill would have to pass the House once again before it is sent to President Obama. It is unclear if the House would accept the Senate changes.

CASE strongly supports the IRA charitable rollover and will continue to urge lawmakers to pass a retroactive extension of the incentive as soon as possible.

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Contact Brian Flahaven, director of legislative, foundation and recognition programs, at flahaven@case.org.