Vance, Walz Selected as Vice Presidential Nominees Former
President Donald Trump selected Ohio Senator JD Vance as his running mate in July. Vance has called for eliminating “all special privileges” that exist for nonprofits and foundations and has referred to certain large charitable foundations as “cancers on American society.” Vance has also issued multiple proposals in the Senate to increase the university endowment excise tax and, during his campaign, proposed a 20 percent annual payout requirement on charitable endowments with over $100 million in assets. While it’s unclear how much policy influence Vance might have in a potential second Trump Administration, critics of philanthropy could gain a sympathetic ear in the White House if Trump wins, reinforcing the importance of proactive engagement ahead of tax reform next year.
Meanwhile, Vice President Kamala Harris announced Minnesota Gov. and former Congressman Tim Walz as her vice presidential nominee. While in Congress, Walz represented a rural area of Minnesota but has tacked left since becoming governor and proposed funding tax relief for lower-income families by raising taxes on wealthy taxpayers’ investment income. He has previously called for curtailing deductions for wealthy individuals, which could reduce charitable giving if the charitable deduction were phased out for high earners. Like Vance, it’s too soon to say how much sway Walz may carry if Harris wins in November. Stay tuned.
GOP Taxwriter Echoes Proposal to Tap Sector for Revenue
As you may recall, an influential right-leaning think tank recently published a report calling on lawmakers to increase taxes on nonprofits, including on their investment and fee-for-service income, to address the proliferation of business-like nonprofits. Shortly thereafter, House taxwriter Randy Feenstra (R-IA) echoed some of the central concerns in the report around nonprofits that provide similar services to for-profits and suggested this is something that needs to be examined when lawmakers consider expanding the tax base. Feenstra’s comments highlight how quickly an idea can go from a think tank to Capitol Hill and the need for additional educational efforts with lawmakers to drive home the distinctions between for- and non-profits undergird the latter’s tax-exempt status.
Second Letter from Top Taxwriter to U.S. Chamber of Commerce Foundation Raises Concerns Over Gifts Accepted
House Ways and Means Committee Chair Jason Smith (R-MO) raised new concerns regarding donations from the Tides Foundation’s donor-advised fund to the U.S. Chamber of Commerce Foundation (USCCF) in a second letter sent to USCCF on July 22. This most recent letter asks for more information from USCCF on its policies for accepting gifts and how it performs due diligence on its donors. The inquiry follows a similar May 6 letter from Chair Smith that expressed concern about USCCF accepting donations from the Tides Foundation. The letters highlight how Chair Smith has been willing to use his committee’s oversight powers to scrutinize tax-exempt entities, including DAF sponsors and their grantees.
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