Action Alert: IRS Reporting Proposal Threatens Donor, Nonprofit Security

The deadline for comments on an IRS reporting proposal threatening nonprofit and donor security is December 16 – less than a week away. The new, voluntary reporting method calls on nonprofits to collect, store, and report donors’ Social Security numbers, along with the amount of donations and other information. The proposed regulations would give nonprofits the option of filing a separate new information return with the IRS and individual donors by February 28 every year to substantiate contributions of more than $250 in value. A similar mandatory proposal was considered and rejected in the past based on numerous legal, policy and confidentiality problems it raised.

This should concern foundations and the general public for a number of reasons. Tim Delaney, president and CEO of the National Council of Nonprofits, explains in a recent blog post:

  • Opens the door to scam artists. The public is consistently warned by state attorneys general (“Never give out personal information, such as your … Social Security number“), the Social Security Administration (“your number is confidential“), and many other experts — including the IRS itself — to provide their Social Security number only when “absolutely necessary.” At minimum, this IRS proposal injects a contrary message that will confuse the public. Even without adoption by any nonprofit, a scammer could call a donor purporting to be with a (receiving) nonprofit and request the donor’s social security number in order to send a form confirming their contribution for use in case of audit.
  • Nonprofits could be targeted by hackers and made liable. Media stories the past few years have revealed massive security breaches with hackers stealing the Social Security numbers of more than 22 million people from the federal Office of Personnel Management, as well as penetrating the CIAState Department, and even the White House. The federal government has sunk billions of dollars and has hundreds, if not thousands, of people dedicated to keeping government information secure. And yet, its systems were hacked. Nonprofits have neither the financial resources nor sufficient staffing to combat hackers who will see an easy source for Social Security information. This also creates a liability nightmare for innocent nonprofits. In an interview last week with The Chronicle of Philanthropy, Janet Kleinfelter, Tennessee’s Deputy Attorney General and President of the National Association of State Charity Officials (NASCO), noted that if nonprofits collected Social Security numbers and that information were to be breached by hackers, “as a regulator, I would look at that as a breach of fiduciary duty.”
  • Giving will suffer, which means our communities suffer. Most people are cautious about the information they share online, and rightfully so. To be asked to share their address, their credit card number and their Social Security number all in the same place would be enough to scare even the most committed donor to decline to give. As much as they may want to support good works in their community, it wouldn’t justify taking the risk of their identity being stolen using the ease of online giving. For private foundations, the new regulation could result in replacement pressure, as foundations would be depended on to offset reduced individual donated funds; it would also be a drag on resources as each of their grantees may seek their Taxpayer Identification Numbers (in lieu of Social Security numbers).

WHAT CAN YOU DO?

The IRS is asking for comments on the proposal by December 16.  Submit comments at the IRS website — and let your board members, funders and donors know to submit their concerns, too.

WHAT ARE THE TALKING POINTS?

The National Council of Nonprofits compiled some talking points:

  • A charitable nonprofit should never be asking a donor for her or his Social Security number when soliciting donations. If someone is asking in relation to a donation, that should be considered a sign of a scam or fraudulent solicitation.
  • The proposed Donee Reporting Rule conflicts with the IRS advice to taxpayers to only give out their Social Security numbers when “absolutely necessary.”
  • Taxpayers may reduce giving because they are reluctant to provide Social Security numbers to charities given concerns over identity theft.
  • The current contemporaneous written acknowledgement system is working.
  • Just because the proposal is voluntary now is no reason to ignore its potential adverse impacts.

Also be sure to include basic information about your organization. As a funder you may also want to mention your concern for your grantees.

IS THIS LOBBYING?

NO. Comments on regulations are not considered lobbying by the IRS.

– David Biemesderfer, President & CEO, Florida Philanthropic Network

FPN Leads Team to Advocate for Philanthropy on Capitol Hill

Florida Philanthropic Network provided a strong voice for Florida philanthropy in Washington, DC a few weeks ago when we led our state’s delegation for the 2015 Foundations on the Hill event. The Florida team held 23 meetings with members of our state’s congressional delegation and their staffs, where we stressed to them the value and impact of philanthropy in our state.

FPN President & CEO David Biemesderfer (l) was one of the speakers for the kick-off of the 2015 Foundations on the Hill Event, along with (l-r) Sherry Magill, President of the Jessie Ball duPont Fund and a founder of FPN; Adam Meyerson, President of the Philanthropy Roundtable; and Sue Santa, Senior Vice President for Public Policy and Legal Affairs at the Council on Foundations

FPN President & CEO David Biemesderfer (l) was one of the speakers for the kick-off of the 2015 Foundations on the Hill and Philanthropy Week in Washington, along with (l-r) Sherry Magill, President of the Jessie Ball duPont Fund and a founder of FPN; Adam Meyerson, President of Philanthropy Roundtable; and Sue Santa, Senior Vice President for Public Policy and Legal Affairs at the Council on Foundations.

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The Next Big Conversation in Florida Philanthropy: How Are We Preparing for Sea-Level Rise?

Florida at night from space.

Photo Credit: NASA.gov

The theme of Florida Philanthropic Network’s 2015 Statewide Summit on Philanthropy, which is being held on January 29-30, is “The Next Big Conversations in Florida Philanthropy.” In the spirit of the Summit’s theme, this post is part of a series where we’ve asked some of our member leaders to share their thoughts on the next big conversations that should be taking place in Florida’s philanthropic sector. For more information on the Summit, visit www.fpnetwork.org/summit.

Thank you to Dr. Mark Pritchett, Senior Vice President for Community Investment at Gulf Coast Community Foundation, for sharing his thoughts on the next big conversation in Florida philanthropy. 

Most of Florida lives along the coast—just look at a nighttime photo of our state from space. We grow along the coastline here in Florida too. For many of us, the coast is the foundation of our communities. And that coastline is changing. But what are we doing about it? Continue reading

The Next Big Conversation in Florida Philanthropy: Guiding Donors Through Florida’s Wealth Transfer

Multi-Generation-Family-Relaxi-42381205

The theme of Florida Philanthropic Network’s 2015 Statewide Summit on Philanthropy, which is being held on January 29-30, is “The Next Big Conversations in Florida Philanthropy.” In the spirit of the Summit’s theme, this post is part of a series where we’ve asked some of our member leaders to share their thoughts on the next big conversations that should be taking place in Florida’s philanthropic sector. For more information on the Summit, visit www.fpnetwork.org/summit.

Thank you to Joanne Cohen, Vice President of Philanthropic Services at The Community Foundation for Northeast Florida for sharing her thoughts on the next big conversation in Florida philanthropy. 

The phone rang and I was greeted with the following question: “Do you have any ideas about how I can talk to my young adult children about philanthropy? Can you help me?” This has become a common question in our northeast Florida community among our foundation donors. Why now? Is this the next big conversation in Florida philanthropy? I think the answer is a resounding yes! Continue reading

Children’s Health Coverage in Florida Making Progress But Many Challenges Ahead, New FPN Brief Shows

KidsCoverageBriefCover600Last week Florida Philanthropic Network and our Florida Health Funders member affinity group released an educational brief on the state of children’s health coverage in Florida. Anyone who cares about the health of Florida’s kids needs to know the information covered in the publication.

Authored by Joan Alker, Executive Director of the Center for Children and Families at the Georgetown University Health Policy Institute, the brief has some good news for Florida: over the past five years, the number and rate of uninsured children has declined in in the state, mirroring a nationwide trend. In 2008, about 668,000 Florida children ages 18 and under were uninsured; by 2013 that number had dropped to 445,000. Continue reading

The Next Big Conversation in Florida Philanthropy: Tech Talk

healthcare-information-technology

The theme of Florida Philanthropic Network’s 2015 Statewide Summit on Philanthropy, which is being held on January 29-30, is “The Next Big Conversations in Florida Philanthropy.” In the spirit of the Summit’s theme, this post is part of a series where we’ve asked some of our member leaders to share their thoughts on the next big conversations that should be taking place in Florida’s philanthropic sector. For more information on the Summit, visit www.fpnetwork.org/summit.

Thank you to Eric Kelly, President of the Quantum Foundation for sharing his thoughts on the next big conversation in Florida philanthropy. 

People often think of Florida as an aging state and, as a health foundation, we’re well aware of the challenges presented by a large older population but for us, the next big conversation in Florida philanthropy has to be about younger people—the millennials—and how to reach, communicate and interact with them. And that means learning to speak “Technology.” Continue reading

Children’s Services Councils: Valuable Partners for Philanthropy in Florida

Many Floridians may not know that Florida is the only state in the country that is home to some unique funding entities, known as Children’s Services Councils (CSCs), dedicated solely to investing in the well-being of children and families. Today voters in five Florida counties – Broward, Martin, Okeechobee, St. Lucie and Palm Beach – will be asked to reauthorize their county’s CSC. Continue reading