Monday, September 28, 2009
Senator Baurcus Proposes Limit to Charitable-Deductions
Senator Max Baucus, the chairman of the Senate Finance Committee, proposed limiting the charitable tax deduction for wealthy Americans to 35%. While less drastic than the cut to 28% proposed by President Obama, many nonprofits fear that any decrease in the tax deductibility of charitable donations will reduce donations at a time when nonprofits are already struggling.
Nonprofit CEO Salaries Rise in 2008
According to a survey by the Chronicle of Philanthropy, the highest paid CEOs in the nonprofit world saw in increase in their salaries in 2008. Stacey Palmer, an editor at the Chronicle of Philanthropy, argued that most of the salaries were set before nonprofits began feeling the effects of the recession. Topping the list of questionably high compensation was $2.1 million for the director of the Museum of Modern Art in New York; $2.7 million for the head of a health care group in Boston; $1.3 million for the president of New York University.
AIDS Charity Under Federal Investigation
Let’s Talk, Let’s Test Foundation received $3 million from the Illinois legislature last year, and now the state health department is questioning how the charity spent $523,545. The questionable expenses include five-figure bonus payments and a skybox at a college football game. Federal authorities are also investigating $3,273 in campaign contributions from three employees, two of whom received five-figure bonuses, to the charity’s founder, State Rep. Connie Howard. The organization’s tax exempt status was revoked in Illinois after it failed to report its 2008 finances, and the foundation is now $950,000 in debt.
Gates Foundation Adds PRIs to Investment Portfolio
The Bill and Melinda Gate Foundation is leveraging more of its $35.1 billion to charitable purposes through program related investments (PRIs). After losing 20% of its endowment in the financial crisis, the Gates Foundation was forced to rethink its investment strategy, which was previously focused solely on profit maximization. PRI’s are investments expected to turn a profit while still serving a purpose related to a charitable program of the foundation. The Gates Foundation has loaned $40 million to companies increasing banking services and microcredit in Africa and Asia and is considering a plan to guarantee US students loans.