Emerging Issues in Philanthropy seminar series

After Katrina: Public Expectation and Charities' Response

Elizabeth T. Boris, C. Eugene Steuerle

The essays in this collection grew out of the 14th Emerging Issues in Philanthropy Seminar, "Charities' Response to Disasters: Expectations and Realities," held on December 2, 2005. Authors discuss the strengths and weaknesses of charities’ responses to the Gulf Coast hurricanes, lessons learned from previous disasters—the September 11th attacks and the Asian Tsunami—and how well those lessons were applied. Authors note the need to have realistic expectations of charities' role in disaster relief and rebuilding, given the resources of the charities—particularly small local secular and faith-based agencies—and their inability to control the content or amount of voluntary assistance. The critical role of government in coordinating and leading disaster response efforts is a major theme.

Philanthropic Foundations

Elizabeth T. Boris, C. Eugene Steuerle

Both proponents and opponents of changes in the laws, regulations, and practices of charitable foundations have the same goal: enhancing public well-being through the best use of charitable resources. There has been a series of proposals to raise the payout rate of foundations, to limit the extent to which administrative expenses can count as part of payout, to set a minimum size for foundations, and to maintain grant levels during downturns in the economy. This brief reports on a discussion from the tenth "Emerging Issues in Philanthropy" seminar series of foundation payout and regulation.

Accumulations of Wealth by Nonprofits

Marion R. Fremont-Smith

Contrary to some public perceptions, most of the wealth in the nonprofit sector is not in the hands of private foundations. It is instead held by service-providing organizations, notably hospitals and related health care organizations, together with colleges and universities. However, wealth of individual organizations varies greatly. Some colleges and universities have endowments in the billions while others have little or no permanent funds. Can there be too much wealth in the nonprofit sector and, if so, what should we do about it? This brief reports on a discussion from the sixth Emerging Issues Seminar of these issues, including current trends and mechanisms proposed to control wealth.

Preparing for the Next Emergency

C. Eugene Steuerle

This brief summarizes a Center on Nonprofits and Philanthropy/Hauser Center seminar on lessons learned from the September 11 charitable relief efforts. It discusses issues including the immediate challenges of emergency relief, meeting needs and donor intent, and administrative costs.

Faith-Based Initiatives: Sacred Deeds and Secular Dollars

Carol J. De Vita, Sarah Wilson

Proposals to encourage greater cooperation between government and faith-based organizations have drawn considerable discussion within the social service, religious, and policymaking communities. Questions about the legal implications of such partnerships, the capacity and effectiveness of religious groups to deliver services, and the effect of these partnerships on religious life in America are at the heart of the debate. This policy brief reports on a one-day seminar held in May 2001 and sponsored by the Urban Institute's Center on Nonprofits and Philanthropy and the Hauser Center for Nonprofit Organizations, Harvard University, in which religious leaders, government officials, social service providers, and academic researchers examined the political and social questions sparked by the White House Initiatives. It examines various points of contention and suggests future steps that can shed light on this important public policy discussion.

When Nonprofits Conduct Exempt Activities as Taxable Enterprises

C. Eugene Steuerle

When a nonprofit engages in business activities unrelated to its nonprofit purposes, taxability is usually not a question of choice; various laws and regulations require that the organization pay taxes on this income and, typically, on sales and property. For related activities, however, a nonprofit that can claim tax exemption sometimes chooses to carry out these activities in the form of a taxable enterprise. But why would an organization decide to pay more tax—or at least appear to pay more tax—than the law requires?

The Cost of Giving: How Do Changes in Tax Deductions Affect Charitable Contributions?

Joseph J. Cordes

Each year, millions of American taxpayers claim tax deductions for contributions to their favorite charities. The charitable tax deduction subsidizes private giving by reducing the out-of-pocket cost of making contributions. In April 1999, the Urban Institute’s Center on Nonprofits and Philanthropy and Harvard University’s Hauser Center for Nonprofit Organizations convened the first Seminar on Emerging Issues in Philanthropy to explore whether the benefits derived from the charitable tax deduction are worth the cost.

The Unrelated Business Income Tax: All Bark and No Bite?

Evelyn Brody, Joseph J. Cordes

Nonprofit organizations engage in a range of income-producing activities: Universities charge tuition, hospitals collect fees, and social-service organizations enter into government contracts. To the extent that an activity is "substantially related" to the organization's tax-exempt purpose, the income is tax-free (and the associated expenses are, essentially, not deductible). By contrast, net income from "unrelated business activities", is subject to the Unrelated Business Income Tax (UBIT), which generally taxes such income at ordinary corporate (or trust) tax rates. Congress, however, has exempted dividends, interest, rents, and royalties from the UBIT.

Election Year Proposals Affecting Charities

Sarah Wilson

In 2000, the candidates running for president and the Clinton administration developed a number of legislative proposals that would affect the nonprofit sector, both directly and indirectly. These proposals would influence charitable giving and the way in which some charitable organizations operate. It remains to be seen which proposals ultimately will be enacted. Nonetheless, they illustrate the kinds of policy changes that are likely to be considered in the near future.