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Wednesday, June 22, 2005

Nonprofit Panel Rolls Out Final Recommendations

The panel recommends:
Charities and foundations should include far more detailed information about executive and board compensation and the independence of board members on their informational tax forms -- but should not be required to place limits on what they pay their top officials or board members.

Charities should be prohibited by law from making loans to their board members, but nonprofit organizations should still be permitted to make loans to their employees.

No limits should be placed on the deduction individuals may take for donations of clothing and other household items, but the Internal Revenue Service should develop guidelines to help donors place a value on such contributions.

Donor-advised funds should be required by law to give away annually at least 5 percent of their total assets, but each donor-advised account should not have to distribute a minimum amount to charity every year and certain kinds of funds should be excluded from a payout requirement.

Congress should tighten the rules for some types of supporting organizations, requiring them to distribute 5 percent of their net assets every year to the charitable groups they support. Supporting organizations are designed to finance the work of specific charities. Many large nonprofit groups have supporting organizations that generate revenue by investing in stocks or by operating businesses.

Sen. Grassley hopes to have comprehensive reform legislation rolled out within the next few weeks. Most experts think that the legislation will look more like the Joint Tax Committee's recommendations than the Panel's, but it is anyone's guess at this point.

Check them out yourself at: http://www.nonprofitpanel.org/final/

Posted by Jennifer Lowe