As 2015 ended and our new year began, there were two actions by federal government agencies that will have a direct impact on charitable giving. The good news is that they will benefit both donors and nonprofit organizations.

IRA Charitable Rollover: While not a new provision, the ability to make charitable donations from an IRA for adults 70.5 years of age and older has been subject to an annual renewal for many years now and, very often, had not been reauthorized until the very end of the calendar year. This made it very difficult for nonprofit organizations to seek gifts and for donors to plan for gifts of this type. With the passage of the Protecting Americans from Tax Hikes (PATH) Act in late December 2015 (and signed into law by President Obama), this deduction has now been made permanent. The IRA provision allows individuals who are 70.5 or older to donate up to $100,000 to a charity directly from their Individual Retirement Accounts (IRA) without treating the distribution as taxable income.

IRS Withdraws Controversial Proposal: Earlier this year, the Internal Revenue Service proposed new rules relating to the substantiation of charitable gifts. This controversial measure provided for charities to record and report contributions of $250 or more on a new information form that would be in addition to the current Federal 990. There was much opposition to this proposal from charities and donors alike. Together, more than 38,000 people argued it would expose the public to increased risk of identity theft, would impose significant costs and burden nonprofit organizations, and would create public confusion and disincentives for donors to support the work of nonprofits. As the new year began, their voices were heard and the IRS wisely withdrew this proposed rule change.

As a member of the Giving Institute, we, at Evans Consulting, continue to monitor challenges and hardships that might impact fundraising results for nonprofits and impede giving on the part of generous donors. We distribute notices about these challenges to our newsletter readers and hope that future alerts will capture your attention and motivate you to voice opinions to appropriate elected officials.