IRA Rollover Call-In Day
June 26, 2007
Instructions/Talking Points

Background/Urgency

After years of lobbying by AFP and other organizations, the (Individual Retirement Account) IRA Rollover provision was finally signed into law in 2006. Unfortunately, the provision was very limited, as it only allowed for direct gifts of cash from IRAs and capped such gifts at $100,000 annually. Worst of all, the provision expires at the end of 2007.

The IRA Rollover provision finally has a foot in the door, but we need a major grassroots lobbying effort to ensure the door stays open. Since 2008 is a presidential year, and state primaries are being moved up to very early in 2008, attention in Congress is already waning. Therefore, it is critical that AFP act NOW to ensure that the IRA Rollover provision is not only enhanced, but made permanent before it expires!

Why is the IRA Rollover so important?

Over the past few decades, the stock market and the overall economy have grown tremendously. Even with the occasionally slow periods of growth, many individuals have more than sufficient funds to retire comfortably. In addition, individuals are encouraged under the current tax laws to liquidate their IRAs during their lifetime since their estates will face confiscatory tax rates of up to 80% if their IRA funds are left to a dependent or family member (other than their spouse). Under current law, any amounts left in an IRA when an individual dies may be taxed as income to the beneficiary, and are also considered assets for the purposes of calculating that individual's estate tax liability. IRA assets are currently estimated well in excess of $3 trillion.

It is important to note that it is not just the very wealthy who have considerable funds in their IRAs. Americans of all income levels may have excess funds in their IRAs and wish to distribute them charitably.

How does the IRA Rollover work?

Under the current provision (set to expire at the end of this year), a donor who has reached the age of 70½ would be allowed to exclude any IRA funds up to $100,000 that are withdrawn and transferred to a charity from his or her income when filing a tax return for that year. The donor would be eligible to claim a charitable deduction only to the extent that the IRA was funded with after-tax dollars.

Ideally, the amounts transferred to the charity could be in the form of either direct cash gifts OR deferred or life-income gifts (e.g., a charitable remainder trust, gift annuity or contribution to a pooled income fund). If the IRA funds were rolled over as a life-income gift, the donor would pay taxes on the resulting annual income payments from the charity.

The current IRA rollover provision only allows for direct gifts of cash. So in addition to asking members of Congress to make the provision permanent, we are urging them to remove the $100,000 cap, lower the age threshold from 70½ to 59½ and expand the provision to include planned gifts. This is why the IRA Rollover Call-In Day is so essential.

What can I do?

Participate in the Call-In Day Tuesday, June 26. We're asking every member of AFP to make three very short calls and send three letters. The calls should take about one minute each, if that. You can use the prepared letters below. Add in your personal information and, if you want, a sentence or two about how the IRA Rollover would help, or already has helped, your organization. We have step-by-step instructions below.

All in all, AFP is asking for no more than 15 minutes of your time on June 26. We hope you'll get involved in this very important lobbying effort.

Okay, what do I do now?

Thanks for helping! Detailed instructions are below.

1. Use this link and type in your zip code to determine your U.S. Representative: http://www.house.gov/zip/ZIP2Rep.html
2. Use this link to determine your two U.S. Senators: U.S. Senators by State
3. Call the Congressional switchboard (202-224-3121) and ask to speak to your U.S. Representative.
4. Use the following talking points:
   1. Tell the staff person that you are calling from the representative's district (and give a city or area).
   2. Ask the representative to support the IRA Rollover, a provision that will increase charitable giving by billions of dollars annually.
   3. Ask the representative to co-sponsor and support H.R. 1419, the Public Good IRA Rollover Act, and any other legislation that will enhance the IRA Rollover and most importantly, make the provision permanent .
   4. The charitable sector is counting on the representative's support.
5. Use the Congressional switchboard and make similar calls to your two U.S. Senators. However, the bill in the Senate is S. 819, the Public Good IRA Rollover Act.
6. Mail three letters, one each to your U.S. Representative and two U.S. Senators. Cut and paste the sample letter below into your word processing software and personalize it with your own information (places where you can include your personal information are indicated in bold in the sample letter below):
   1. the Representative's or Senator's name and salutation
   2. your name and address
   3. the correct bill number
   4. a line or two about the impact the IRA Rollover would have (and is having) upon your organization.
   5. any other information you would like to add about your organization and its impact upon the community.

IRA Rollover Sample Letter

DATE

For U.S. Representative, use:

Dear Representative LAST NAME:
U.S. House of Representatives
Washington , D.C. 20515

For U.S. Senators, use:

Dear Senator LAST NAME :
U.S. Senate
Washington , D.C. 20510

As a member of the Association of Fundraising Professionals (AFP) and a constituent, I urge you to make the IRA Rollover provision permanent by passing legislation or amendments containing language similar to the provisions found in H.R. 1419 [or S. 819] , the Public Good IRA Rollover Act of 2007.

Congress should not only make the IRA Rollover permanent but it should also enhance the provision by allowing for planned gifts (the current provision allows only direct gifts of cash), removing the $100,000 cap on gifts from IRA accounts and lowering the age threshold from 70½ to 59½.

AFP represents more than 25,000 members across the United States who are responsible for generating philanthropic funds for a wide variety of charitable organizations. AFP exists to advance ethical and effective fundraising and support the extraordinary work that charities perform every day for millions of Americans.

The IRA Rollover provision was included in last year's Pension Reform Act, but the provision currently is scheduled to sunset at the end of this year. This provision is very important because it will not only help all types and sizes of charities, but it also has the potential to increase giving by billions of dollars annually.

IRA assets are currently estimated well in excess of $3 trillion. Even if only a small percentage of these funds were donated to charitable purposes, it could add billions of dollars to support the vital work that nonprofit organizations do in communities across America . Preliminary surveys indicate that the IRA rollover provision enacted last year already is generating tens of millions of dollars in support of critical charitable needs. [If your organization received any IRA gifts, please note that here to show that the provision has been effective.]

The Public Good IRA Rollover Act would make all of these necessary changes, which would in turn allow our nation's charities to significantly enhance their programs and services that serve communities across the country and especially in my community.

Please support the Public Good IRA Rollover Act, and thank you for your attention and consideration.

Sincerely,

YOUR NAME