Advocacy
Letter on Noncash Charitable Contributions
The Honorable Charles E. GrassleyChairman
Committee on Finance
United States Senate
SD-219 Dirksen Senate Office Building
Washington, DC 20510-6200
The Honorable Max Baucus
Ranking Minority Member
Committee on Finance
United States Senate
SD-219 Dirksen Senate Office Building
Washington, DC 20510-6200
Dear Mr. Chairman and Senator Baucus:
We understand that this summer you expect to introduce legislation to correct abuses of charities by those seeking personal benefits, and to encourage additional donations for charitable purposes. As you are considering reforms relating to the donation of noncash gifts, we urge you to move with caution, given the importance of such donations to many kinds of charities, but also to give strong consideration to adopting the reforms in this area that have been proposed in the recent final report of the Panel on the Nonprofit Sector.
With respect to the need for caution and deliberation, a number of our organizations have already contacted you about some of the most damaging proposals that have been put forward in recent months, including those that would replace the current fair market value deduction with a deduction for the lesser of the donor’s cost basis or fair market value. As you know, a similar proposal enacted in 1986 for gifts of appreciated property was temporarily repealed several times and then fully repealed in 1993 after the evidence of the dramatic reduction in giving was documented. For example, for museums alone, a national survey demonstrated a 60% drop in giving to museums generally from 1985 to 1987, and a second national survey, of art museums only, showed a drop of 63% from 1986-88. And initial evidence of the impact of changes to the car donation deduction which became effective on January 1, 2005 suggests that donations to charities in this area have been reduced by as much as fifty percent.
At the same time, however, we share your concern that if the American taxpayer is to continue to subsidize giving to charities via the tax deduction system, that system should be fair and transparent. If Americans lose confidence in giving to charity, the public service missions of all of our organizations will suffer. In addition, where we have good evidence, as with the Art Advisory Panel mechanism at the Internal Revenue Service, we can see that there is a need for reforms to tighten up the valuation process in noncash gifts.
In this context of the need for reform but also the need to proceed thoughtfully, balancing a proposal’s potential benefit in increasing the accuracy of valuation against its potential costs in discouraging donors to charitable purposes, we strongly encourage you to review and adopt the recommendations on noncash gifts of the Panel on the Nonprofit Sector, as expressed in its June 2005 Final Report (pp. 53-60.)
As you know, the Panel, convened with your encouragement by Independent Sector, represents a wide variety of charities, and the process by which its conclusions were drawn incorporated a great deal of additional advice from many of us and other kinds of charities. We strongly believe that continuing to base noncash gift deductions on fair market value is the right way to maintain and encourage Americans’ historical pattern of generous giving for charitable purposes, but we are fully aware that, as the Panel’s Report points out, “problems have arisen due to the lack of clear, objective standards for establishing clear market value of the donated property.” We know that unless we take effective steps to address those problems, we cannot maintain confidence in the fair market value deduction mechanism that has been so successful in encouraging giving for charitable purposes.
The Panel’s recommendations on noncash gifts are those effective steps. Strengthening the definition of a qualified appraisal and a qualified appraiser for these purposes, expanding penalties on taxpayers for grossly inflated valuations for deduction purposes, imposing new penalties on appraisers for such valuations, and mandating electronic filing of Forms 8282 and 8283 will collectively go a long way toward restoring justified confidence in the accuracy of fair market value deductions, but do so in ways that will not unduly discourage giving. These recommendations, which would apply to all forms of appreciated property, along with the additional specific recommendations on conservation and historic façade easements and on clothing and household items, would be practical, substantial, and effective ways to increase valuation accuracy.
Thus we strongly encourage you to enact these provisions where so recommended by the Panel, and to direct the IRS to take action to incorporate them into regulations or policies where so recommended, as part of your forthcoming legislation in this area.
Finally, many of us previously have been in productive contact with you and your staff members on these issues, and we would be happy to continue to work collaboratively with you and them on this issue as the legislative process unfolds. We share your goal of strengthening the nonprofit sector by assuring that it continues to merit high levels of public confidence.
Sincerely,
National Organizations (71)
Agudath Israel of America
American Arts Alliance
American Association of Museums
American Association for State and Local History
American Heart Association
American Institute for Conservation of Historic & Artistic Works
American Jewish Committee
American Symphony Orchestra League
American Zoo and Aquarium Association
Americans for the Arts
America’s Fund for Communities, Inc.
Anti-Defamation League
Associated Writing Programs
Association of Art Museum Directors
Association of Children’s Museums
Association of College and University Museums and Galleries
Association of Fundraising Professionals
Association of Jewish Aging Services
Association of Jewish Family and Children’s Agencies
Association for Living History, Farm and Agricultural Museums
Association of Performing Arts Presenters
Association of Railway Museums
Association of Science Museum Directors
Association of Science-Technology Centers Incorporated
B’nai B’rith International
Center for Nonprofit Advancement
College Art Association
Council for Advancement and Support of Education
Council of American Jewish Museums
Council on Foundations
Dance/USA
Government Accountability Project (GAP)
Hadassah: Women’s Zionist Organization of America
HALT, Inc—An Organization of Americans for Legal Reform
Hebrew Immigrant Aid Society
Heritage Preservation
Independent Sector
International Association of Jewish Vocational Services
International Museum Theater Alliance
Jewish Council for Public Affairs
Literary Network
Lupus Foundation of America
March of Dimes
MENC: The Association for Music Education
Museum Store Association
Museum Trustee Association
National Assembly of State Arts Agencies
National Association of Independent Schools
National Cancer Coalition
National Catholic Development Conference
National Committee on Planned Giving
National Council of Jewish Women
National Council of Nonprofit Associations
National Law Enforcement Officers Memorial Fund
National Multiple Sclerosis Society
Nonprofit Federation of the Direct Marketing Association
1-880-Save-A-Pet.com
Opera America
Points of Light Foundation
Soroptimist International of the Americas
The Arc of the United States
The Center for Social and Economic Leadership
The Conservation Fund
The Nature Conservancy
The Trust for Public Land
Theatre Communications Group
Union for Reform Judaism
United Cerebral Palsy
United Jewish Communities
Wildlife Trust
World Emergency Relief
Regional, State, and Local Organizations (217)
Agua Caliente Cultural Museum, Palm Springs, CA
Alamance Battleground State Historic Site, Burlington, NC
Allen County Museum, Lima, OH
Allied Jewish Federation of Colorado
Arkansas Arts Center, Little Rock, AR
Art Institute of Chicago, Chicago, IL
Association of Midwest Museums
Association of the Miraculous Medal, Perryville, MO
Augusta Jewish Federation, Augusta, GA
Baton Rouge Area Foundation, Baton Rouge, LA
Benjamin Harrison Presidential Site, Indianapolis, IN
Bennett Place, Durham, NC
Bentonville Battlefield Historical Association, Inc., Bentonville, NC
Bentonville Battlefield State Historic Site, Bentonville, NC
Bland County Historical Society, Bastian, VA
Brandywine River Museum, Chadds Ford, PA
Brunswick Town—Ft. Anderson State Historic Site, Winnabow, NC
California Association of Museums
California Community Foundation, Los Angeles, CA
Cave Creek Museum, Cave Creek, AZ
Charles H. Wright Museum of African American History, Detroit, MI
Charlotte Hawkins Brown Museum, Sedalia, NC
Charlotte Museum of History, Charlotte, NC
Christian Appalachian Project, Lancaster, KY
Coastal Community Foundation of SC, Charleston, SC
Colon & Associates, LLC, Vienna, VA
Columbus Jewish Foundation, Columbus, OH
Columbus Zoo and Aquarium, Columbus, OH
Community Foundation for the Capital Region, Albany, NY
Community Foundation of Greater Flint, Flint, MI
Community Foundation of Greater Greensboro, Greensboro, NC
Community Foundation Silicon Valley, San Jose, CA
CSS Neuse State Historic Site and Richard Caswell Memorial, Kinston, NC
Daniel D. Cantor Senior Center of Broward County, FL
David Posnack Hebrew Day School of Broward County, FL
David Posnack Jewish Community Center of Broward County, FL
Dedham Historical Society, Dedham, MA
Duke Homestead State Historic Site and Tobacco Museum, Durham, NC
Eagle Rock Art Museum & Education Center, Idaho Falls, ID
Fairfield County Museum, Winnsboro, SC
Florida Association of Museums
Fort Fisher State Historic Site, Kuire Beach, NC
Fort Wayne Jewish Federation, Fort Wayne, IN
Ft. Dobbs State Historic Site, Statesville, NC
Foundation For the Carolinas, Charlotte, NC
Franciscan Friars of Atonement, Garrison, NY
Fraxier Historical Arms Museum, Louisville, KY
Gadsden Arts Center, Quincy, FL
Gold History Corporation [a 501(c) support group], Midland, NC
Governor Charles B. Aycock Birthplace State Historic Site, Fremont, NC
Greater Kansas City Community Foundation, Kansas City, MO
Gulf Coast Community Foundation of Venice, Venice, FL
Hecksher Museum of Art, Huntington, NY
High Point Museum, High Point, NC
Historic Bath State Historic Site, Bath, NC
Historic Halifax, Halifax, NC
Historic New England, Boston, MA
Historic Sahuaro Ranch, Glendale, AZ
Historic Stagville State Historic Site, Durham, NC
Home Creek Living Historical Farm, Pinnacle, NC
Houston Computer Museum, Houston, TX
Illinois Association of Museums
International Center for the Preservation of Wild Animals (the Wilds), Cumberland, OH
James K. Polk Memorial State Historic Site, Pineville, NC
Jewish Board of Family and Children’s Services of New York City
Jewish Communal Fund of New York
Jewish Community Foundation of Colorado
Jewish Community Foundation of MetroWest, NJ
Jewish Community Relations Council of Greater Washington
Jewish Family and Vocational Service of Louisville, KY
Jewish Family Service of Broward County, FL
Jewish Family Service of Houston, TX
Jewish Family Service of New Orleans, LA
Jewish Family Service of San Diego, CA
Jewish Family Service of St. Paul, MN
Jewish Family Service of Wilkes-Barre, PA
Jewish Family Services of Columbus, OH
Jewish Family Services of York, PA
Jewish Federation of Central New Jersey
Jewish Federation of Greater Atlanta, GA
Jewish Federation of Greater Los Angeles, CA
Jewish Federation of Greater New Haven, CT
Jewish Federation of Greater New Orleans, LA
Jewish Federation of Greater Philadelphia, PA
Jewish Federation of Greater Seattle, WA
Jewish Federation of Metropolitan Chicago, IL
Jewish Federation of Nashville and Middle Tennessee
Jewish Federation of New Hampshire
Jewish Federation of Palm Beach County, FL
Jewish Federation of Portland, OR
Jewish Federation of South Palm Beach County, FL
Jewish Foundation of Nashville, TN
Knoxville Museum of Art, Knoxville, TN
Kresge Art Museum, East Lansing, MI
LaSalle University Art Museum, Philadelphia, PA
LeRoy Historical Society, LeRoy, NY
Levine Museum of the New South, Charlotte, NC
Lighthouse Center for the Arts, Tequesta, FL
Los Angeles County Museum of Art, Los Angeles, CA
Lower Hudson Conference of Historical Agencies & Museums
Madison Jewish Community Council, Madison, WI
Maine Community Foundation, Ellsworth, ME
Marin County Foundation, Novato, CA
Maryhill Museum of Art, Goldendale, WA
Mel Fisher Maritime Museum, Key West, FL
Metropolitan Council on Jewish Poverty in New York
Metropolitan Museum of Art, New York, NY
Mesa Historical Museum, Mesa, AZ
Mexican Fine Arts Center Museum, Chicago, IL
Miami University Art Museum, Oxford, OH
Michigan Nonprofit Association
Mid-Atlantic Association of Museums
Minneapolis Jewish Foundation, Minneapolis, MN
Mizel Museum, Denver, CO
Monte L. Bean Life Science Museum of Brigham Young University, Provo, UT
Mount Vernon Ladies Association, Mount Vernon, VA
Mountain-Plains Museums Association
Museum Association of Arizona
Museum Association of New York
Museum of the Albemarle, Elizabeth City, NC
Museum of disABILITY History, Williamsville, NY
Museum of Great Christian Preachers & Ministries, Maitland, FL
Museum of Osteology, Oklahoma City, OK
National Canal Museum/Hugh Moore Historical Park, Easton, PA
National Heritage Museum, Lexington, MA
North Carolina Museum of History, Raleigh, NC
North Carolina Transportation Museum, Spencer, NC
North Carolina Transportation Museum Foundation, Spencer, NC
Nevada Museums Association
New Britain Museum of American Art, New Britain, CT
New England Museum Association
New Jersey State Association of Jewish Federations
New Orleans Hillel Foundation, New Orleans, LA
North Carolina Center for Nonprofits
Northshore Jewish Congregation, New Orleans, LA
Northwest Arkansas Community Foundation, Springdale, AR
Oak Park River Forest Chamber of Commerce, Oak Park, IL
Oak Park-River Forest Community Foundation, Oak Park, IL
Ohev Sholom Congregation, York, PA
Oklahoma Museums Association
Old Sturbridge Village, Sturbridge, MA
Paris-Henry County Heritage Center, Paris, TN
Peabody Essex Museum, Salem, MA
Philadelphia Zoo, Philadelphia, PA
Picker Art Gallery, Colgate University, Hamilton, NY
Please Touch Museum, Philadelphia, PA
Powhanton Plantation Manor House, Williamsburg, VA
Pueblo Grande Museum, Phoenix, AZ
Reed Gold Mine State Historic Site, Midland, NC
Reedville Fishermen’s Museum, Reedville, VA
Robert E. Lee Memorial Association, Stratford, VA
Samak Art Gallery, Bucknell University, Lewisburg, PA
Samuel M. & Helene Soref Jewish Community Center, Broward County, FL
San Antonio Area Foundation, San Antonio, TX
San Diego Natural History Museum, San Diego, CA
San Dieguito Heritage Museum, Encinitas, CA
San Francisco Maritime National Park Association, San Francisco, CA
Sarasota-Manatee Jewish Federation, Sarasota, FL
Somerset Place Historic Site, Creswell, NC
Southeastern Museums Conference
Spartanburg County Museum of Art, Spartanburg, SC
Sports Hall of Fame of New Jersey, East Rutherford, NJ
St. Labre Indian School, Ashland, MT
Saint Louis Zoological Park, St. Louis, MO
Talmud Torah of St. Paul, MN
The Board of Rabbis of Southern California
The Butler Institute of American Art, Youngstown, OH
The Children’s Museum of Indianapolis, Indianapolis, IN
The Columbia Foundation, Columbia, MD
The Danish Immigrant Museum, Elk Horn, IA
The Eric Carle Museum of Picture Book Art, Amherst, MA
The Field Museum, Chicago, IL
The Foundation Board of the Jewish Federation of Greater Dayton, OH
The Frick Collection, New York, NY
The Hyde Collection, Glens Falls, NY
The Hebrew Home of Greater Washington, Rockville, MD
The House in the Horseshoe State Historic Site, Sanford, NC
The Mennello Museum of American Art, Orlando, FL
The Morikami Museum and Japanese Gardens, Delray Beach, FL
The Museum of Art, Rhode Island School of Design, Providence, RI
The Museum of Contemporary Photography, Columbia College Chicago, Chicago, IL
The Museum of Modern Art, New York, NY
The New York Community Trust, New York, NY
The Olana Partnership, Hudson, NY
The Seattle Foundation, Seattle, WA
The Thomas Wolfe Memorial Advisory Committee, Ashville, NC
This Century Art Gallery, Williamsburg, VA
Thomas Wolfe Memorial State Historic Site, Asheville, NC
Tioga County Historical Society, Owego, NY
Torah Academy, St. Louis Park, MN
Trinity Missions, Silver Spring, MD
Tryon Palace Historic Sites & Gardens, New Bern, NC
UJA Federation of New York
UJA Federation of Northern New Jersey
United Jewish Communities of Metrowest, NJ
United Jewish Communities of York, PA
United Jewish Community of Broward County, FL
United Jewish Federation of Pittsburgh, PA
United Jewish Federation of San Diego County, CA
United Jewish Fund and Council of St. Paul, MN
University of Buffalo Art Galleries, Buffalo, NY
Virginia Association of Museums
Virginia Discovery Museum, Charlottesville, VA
Walter E. Terhune Gallery, Owens Community College, Toledo, OH
Ward W. O’Hara Agricultural Museum, Auburn, NY
Wenham Museum, Wenham, MA
Western Museums Association
Wings Over Miami Museum, Inc., Miami, FL
Wisconsin Maritime Museum, Manitowoc, WI
Wisconsin Sports Development Corp., Madison, WI [a 501(c)3 organization]
Wolf Creek Indian Village & Museum, Bastian, VA
Women’s Sports Foundation’s International Women’s Sports Hall of Fame, East Meadow, NY
Worcester Art Museum, Worcester, MA
World of Good, Harrisonburg, VA
Youngstown Area Jewish Federation, Youngstown, OH
Zebulan B. Vance Birthplace, Weaverville, NC
Cc: Dean Zerbe, Majority Tax Counsel, Senate Finance Committee
Jon Selib, Minority Tax Counsel, Senate Finance Committee
Members of the Senate Finance Committee
Contact information:
Jason Hall, Director
Government and Media Relations
American Association of Museums, on behalf of the Coalition to Uphold Noncash Charitable Giving
202-218-7705
jhall@aam-us.org
