Press Releases

WASHINGTON ­­­­- A new analysis released today by the National Committee for Responsive Philanthropy (NCRP) suggests that private foundations can afford to devote up to an additional $4.3 billion annually to nonprofits while sustaining themselves for the long term and enhancing their own efficiency. The findings lend support to a provision in a bipartisan charity aid bill in Congress, Sec. 105 of H.R. 7, that would help foundations focus their required charitable spending almost entirely on grants. The reform would end foundations' rampant practice of counting much of their own administrative costs toward their annual charitable spending obligations.

"This is a modest and reasonable reform that would help charities with desperately needed new grantmaking while simultaneously safeguarding foundation perpetuity," said NCRP Executive Director Rick Cohen. "Rather than stopping foundations from spending funds on administrative and operating costs, the proposed provision of the Charitable Giving Act simply guarantees that at least 5 percent of foundations' endowments will be devoted to strengthening the budgets of America's nonprofits on the front lines of social progress."

NCRP's new analysis, titled Helping Charities, Sustaining Foundations: Reasonable Tax Reform Would Aid America's Charities, Preserve Foundation Perpetuity and Enhance Foundation Effectiveness and Efficiency, can be viewed online at www.ncrp.org/HelpingCharities.pdf.

Under current law, private foundations are required to donate only 5 percent of their assets each year to charitable purposes - and they can include many of their own administrative overhead expenses in that 5 percent. The proposed bipartisan reform (Sec. 105 of H.R. 7) under consideration in the U.S. House of Representatives, sponsored by Reps. Roy Blunt, R-Mo., and Harold Ford Jr., D-Tenn., would hold that level at 5 percent, but exclude foundations' administrative costs - such as executive salaries, fees paid to trustees and board members, office construction and rental costs - from their required annual charitable spending known as "qualifying distributions."