Non-cash gifts targeted for elimination by Congress.

Representatives of nonprofits that rely on non-cash gifts met informally in Washington. D.C., to build a coalition to fight the Senate Finance Commit. tee's assault on the deductions individuals and businesses receive for such gifts to charity.

While advocacy group Independent Sector (IS) has issued an interim report for senators regarding reforms and accountability in the sector, the final report is not expected before June.

Ed Able, chief executive officer of the American Association of Museums, said approximately a dozen organizations met in his group's offices last month because of concerns legislators would not wait for IS's final report. The Association of Fundraising Professionals (AFP) was also a coordinator of the meeting.

Able declined to identify the organizations that sent representatives. Others at the meeting said representatives of Gifts In Kind International and the Council for Advancement and Support of Education were in the room. Also attending were representatives from coalitions of arts groups and land conservation organizations, THE NONPROFIT TIMES has learned.

Representatives from IS were invited to participate but were unable to attend due to other commitments, Able said.

According to sources at the meeting, there was a debate whether these groups needed to move ahead with a separate lobbying effort, arguing that IS already was overloaded. IS convened The Panel on the Nonprofit Sector to develop an initial response to federal proposals circulated last summer and aimed at improving charitable governance and accountability.

As previously reported in THE NONPROFIT TIMES, the interim report's release ignited controversy within the sector. Several prominent nonprofit leaders were upset that they were unable to review a final version before its delivery to Capitol Hill, yet were asked to support it.

One person familiar with the panel's procedure, who requested anonymity, was uncertain how changes occurred between an earlier version posted for public comment and the final version of the interim report.

The AFP participated in the panel discussions but has not endorsed the interim report. "We've not publicly supported the interim report," said Walter Sczudlo, executive vice president of AFP He said AFP remains committed to working with IS and other groups attempting to lobby Congress regarding regulation of the sector.

"There's very little in the interim report that anyone can disagree with," said Sczudlo. "My understanding is there are some on the Hill who think Independent Sector dodged the difficult issues. Some in the sector that think IS is trying to cover too many bases too fast."

He said that the organizations that met informally are considering the additional lobbying because, "the finance committee has expressed its commitment to fundamentally overhauling the sector. Sen. (Charles) Grassley said at the heating that the last time the rules governing the sector were overhauled a man walked on the moon. That attitude suggests a damn the torpedoes, full speed ahead approach. While it may be appropriate to look at some adjustments and tightening of some of the provisions affecting the sector, there certainly isn't any crisis that requires creation of a whole new set of rules."

Paulette Maehara, CFRE, CAE, AFP's president and CEO, said that her organization has not publicly endorsed the interim report because it is a work in progress. "It's a process issue in that it's a preliminary report, and at this point we would be hesitant to endorse something that eventually down the road--of which I'm not saying will happen--we may have to step out and disagree with," said Maehara. "We prefer to look at that from the end process as opposed to the beginning, which this is.... It's an interim report and there will be subsequent reports."

More than 500 fundraising professionals called Congress to voice support for the non-cash gift deduction from a telephone bank AFP set up at its recent annual conference, she said.

Able said his members were particularly hard hit when the non-cash deduction was taken away during the tax reform act in 1986. Gifts of objects to museums declined by 60 percent almost immediately. "There was a period of 1991 and 1992 when they suspended that provision, and immediately gifts of objects to museums rose to pre-'86 value," said Able. The provision came back, somewhat permanently, Aug. 10, 1993.

Congress has already substantially changed the rules regarding some non-cash gifts, moving on donations of automobiles and intellectual property. In that both items were part of larger charity-related legislation and became the only aspects to pass, the nonprofit leaders are attempting to prevent a repeat performance.