On September 27, Sens. Rick Santorum (R-PA) and Joe Lieberman (D-CT) introduced S. 1780, the Charity, Aid, Recovery and Empowerment Act (CARE). The legislation includes charitable giving incentives such as tax-free charitable contributions from Individual Retirement Accounts (IRA), and partial deductions of charitable contributions for taxpayers who do not itemize their tax returns. In an attempt to neutralize the charitable reform package expected to come from the Senate Finance Committee, Santorum also included accountability provisions designed to improve oversight of charities. A companion bill in the House does not include the accountability provisions. BODY TEXT S. 1780 is copied from the CARE Act that passed both the House and Senate in the 108th Congress. That bill received significant bipartisan support, but became mired in partisan politics over rules for a House-Senate conference committee, which was never convened. In the 109th Congress, CARE was introduced as Title III of S. 6, a larger welfare reform bill. That larger bill has not moved forward. Key provisions of S. 1780 include:

• A two-year program allowing non-itemizers to deduct a portion of charitable contributions. (Single filers could deduct contributions over $250 up to a ceiling of $500; these figures are doubled for joint filers.)
• Individual Retirement Account rollover. Donors aged 70 1/2; and over may make direct cash contributions to a charity from a traditional or Roth IRA. Donors aged 59 1/2; and over could rollover amounts for a "life income gift," such as a charitable remainder trust or gift annuity.
• $150 million for the Compassion Capital Fund for capacity building to assist small community and faith-based organizations.
• $1 billion in additional funding for the Social Services Block Grant (SSBG)
• Simplification of lobbying expenditure rules for charities, by eliminating the separate reporting requirement for grassroots and direct lobbying
• Charitable deductions for contributions of food and book inventories; an enhanced deduction for charitable contributions of literary, musical, artistic and scholarly compositions; and
• Mileage reimbursements for charitable volunteers that can be excluded from gross income.

Santorum also included nonprofit accountability measures in the legislation, in order to preempt charitable reform legislation, currently being written by the Senate Finance Committee, and of which he has been increasingly vocal in his criticism. In a Sept. 7 letter sent to various nonprofit organizations, Santorum commented, "[u]nfortunately, there is a current movement in Washington that will change the way charitable and nonprofit organizations operate and that could severely hinder the ability and willingness of average Americans to give." According to Santorum's letter, the Senate Finance Committee recently issued a staff discussion document outlining a number of charitable reform proposals. While Santorum agrees that the reports of charitable abuses are cause for concern, he proposes that "the government... authorize sufficient resources to facilitate full implementation of existing law" rather than create new reporting and accountability rules. Accordingly, the accountability and oversight measures in the CARE Act are designed to strengthen current enforcement while resisting a "one-size fits all" approach. A summary of these provisions is available on Independent Sector's website. Earlier this month, certain provisions of the CARE Act were incorporated into Public Law 109-73, the Katrina Emergency Tax Relief Act of 2005. However, the charitable giving provisions of the law are a short-term quick-fix limited in scope and duration, with giving incentives expire at the end of 2005. Reps. Roy Blunt (R-MO) and Harold Ford (D-TN) have introduced companion legislation, H.R. 3908, the Charitable Giving Act of 2005, in the House. The House bill, however, does not include the accountability provisions.