The Pension Reform Bill, signed into law by President Bush in the middle of August, represents the most comprehensive changes to the rules governing the charitable sector since the Tax Reform Act of 1969. The legislation (H.R. 4) contains both incentives to encourage charitable giving and safeguards designed to deter individuals who would use charitable organizations for personal benefit and to ensure that donations are used for charitable purposes.

Among the incentives is an IRA rollover that marks the beginning of a major new initiative to encourage charitable donations. Because this provision will expire in two years, it is important for charitable organizations to educate their donors about this opportunity so our sector can demonstrate the value of this provision.

The bill also contains a series of safeguards that should help protect the sector from unscrupulous indviduals while protecting the independence of charitable organizations. They incorporate changes that many in the sector sought as they worked with Congressional staff, particularly in the Senate, to improve reforms initially passed late in 2005. The revised provisions now more closely reflect recommendations of the Panel on the Nonprofit Sector made last year.

The following documents (all PDFs) describe the bill and its effects in more detail. Developed by the staff of Independent Sector, they are designed to help charitable organizations understand and apply the provisions to their work.

• Analysis of Charitable Reforms & Incentives in the “Pension Protection Act of 2006” (H.R. 4)
• Tips for Public Charities and Private Foundations Regarding Charitable Provisions in the Pension Protect Act of 2006 (H.R. 4)
• Tax Tips for Donors: How New Tax Rules Affect Your Charitable Contributions

If you have trouble downloading the document, try right-clicking on the link (on a Mac, hold the shift key) and choosing "Save As." You may also find it helpful to install Acrobat Reader 7.