Historically, the value of tax benefits for charitable contributions and organizations was estimated to be around $100 billion per year. This figure fell in recent years due to the economic recession and slow recovery. Although revisions to the treatment of charitable contributions and tax-exempt organizations that receive these contributions have been made in recent years, a number of issues remain unresolved. A number of provisions related to charitable contributions have been enacted on a temporary basis as part of the "tax extenders," including an individual retirement account (IRA) rollover, liberalized treatment of certain gifts of inventory, and some other provisions. The Tax Relief, Unemployment Reauthorization, and Job Creation Act of 2010 ( P.L. 111-312 ) extended these provisions through 2011. The American Taxpayer Relief Act of 2012 ( P.L. 112-240 ) extended most, but not all, of these provisions through 2013. The future of various charitable tax provisions beyond 2013 is uncertain. This report also addresses a number of current policy issues relevant for various types of charitable organizations. Issues relating to donor-advised funds and supporting organizations, such as distribution requirements, remain relevant. Similar concerns about whether funds were being paid out at a high enough rate have also been directed at university and college endowments, where a combination of high returns and relatively low payout rates has led to rapid growth. Issues have also been raised about whether nonprofit hospitals provide enough charity care. The Patient Protection and Affordable Care Act (PPACA; P.L. 111-148 ) attempted to address some of these concerns by imposing new requirements on nonprofit hospitals while requiring the Secretary of the Treasury in conjunction with the Secretary of Health and Human Services to report to Congress on charity care provided by tax-exempt hospitals. The President's budgets proposed limiting the value of itemized deductions (which would include charitable contributions) to 28% of each dollar. The final report of the Fiscal Commission also recommended limiting the value of tax benefits associated with charitable contributions. A number of other proposals for caps or floors have also been made as a part of tax reform. In addition to addressing the issues mentioned above, this report discusses the current tax benefits for tax-exempt and charitable organizations, reviews legislative changes that have taken place in recent years, and discusses potential future legislative issues. It focuses on deductions for charitable contributions, and on institutions that are generally eligible for deductible charitable contributions, such as social welfare organizations, educational institutions, nonprofit hospitals, and churches, along with conduits to those institutions such as private foundations, donor-advised funds, and supporting organizations. The tax system provides a series of benefits for tax-exempt and charitable organizations. The most widely estimated and discussed is the deduction for charitable contributions, which is estimated in FY2014 to reduce federal revenue by $46.4 billion. This amount has declined compared with previous projects when most of the 2001 tax rates were made permanent. Another important benefit is the exemption of earnings on assets from the income tax. As discussed below, although this benefit is difficult to estimate, it appears to be as large, and historically has been in the neighborhood of $50 billion per year. For universities and colleges, these benefits are several times as large as the savings by donors from deducting charitable contributions. The value, however, fell temporarily given the reduction in earnings yields during the recent economic slowdown, had largely recovered, but fell again in 2012. Not all tax-exempt organizations can receive tax deductible donations, but religious, educational, social welfare, health, animal protection, and similar organizations are eligible. In recent years, several revisions to the treatment of charitable deductions have been made, both to expand benefits and address potential abuses. Some of the provisions that expand benefits have become part of the "extenders," provisions that are currently set to expire at the end of 2013. Although charitable deductions are available to all taxpayers, individuals who take the standard deduction do not have a marginal tax incentive to give. Slightly over one-third of taxpayers itemize; about 30% deduct charitable contributions. Individuals' contributions are, in general, limited to 50% of income for most charities, but are restricted to 30% for certain nonprofits, including non-operating foundations and institutions set up for the benefit of members (such as fraternal lodges). Individuals can contribute property as well as cash, and the contribution of appreciated assets has particularly beneficial treatment, since the value of most appreciated assets can be deducted without including the capital gains in income. (Some contributions of property are limited to the smaller of basis or fair market value, such as business inventory.) For that reason, gifts of appreciated property are limited to 30% of income for most general charitable organizations, and to 20% for organizations with more restricted giving limits, such as non-operating private foundations. Corporate contributions are limited to 10% of taxable income. Individuals can also deduct costs of volunteering for charitable purposes, including out-of-pocket expenditures, costs of using a vehicle, and travel costs when there is no significant personal element. The treatment of charitable contributions has been of legislative interest. A series of proposals to expand charitable benefits were made in the past, beginning with President Bush's 2000 presidential campaign, and followed by a series of bills introduced in Congress (referred to as the Community Solutions Act and the CARE Act). The centerpiece of the initial proposal was to allow charitable deductions for non-itemizers. This provision, which was relatively costly compared to other proposals, was scaled back with ceilings and floors, and ultimately not adopted. A number of more limited proposals were considered and some were adopted, largely on a temporary basis (part of temporary provisions referred to as the "extenders" that are continually reauthorized). Proposals and enacted legislation placing restrictions on charitable contributions were largely motivated by potential abuses, which led to some changes in the law. These included the lack of documentation of cash contributions, but largely focused on gifts of property, where the valuation of the property or even the existence of a true gift may be questioned. Broad reform proposals have also suggested restricting charitable deductions to make incentives more efficient, both from an economic and administrative perspective, by only allowing charitable deductions in excess of a floor. More recently, charitable contributions may be affected by overall limitations on itemized deductions through general tax reform. A less visible, but nevertheless important, benefit is that tax exemption allows organizations to accumulate assets without paying tax on earnings. Estimates discussed below suggest that the revenue loss from this tax benefit may be larger than that associated with charitable contributions deductions. If charitable contributions were spent quickly, this benefit would be minimal. If contributions are held as assets and invested, the tax exemption may confer significant benefits. There are several ways in which donations are invested rather than spent. Some types of active tax-exempt organizations maintain assets in the form of endowments, particularly educational institutions. Private foundations are often originally funded with a large donation and pay out a small share of assets (required to be at least 5%, however). Two other types of institutions are similar to private foundations in that they do not directly engage in activities and accumulate assets from which they make payments: supporting organizations and donor-advised funds. All of these types of asset accumulating institutions have been the subject of legislative interest. Prior to the recent recession, revenue losses associated with allowing organizations to accumulate assets tax-free had increased substantially with the growth of educational institution endowments. At some institutions, earnings were substantial relative to payout rates. During FY2007 (which ended in June 2007 for most institutions), approximately $25 billion would have been raised if endowment earnings alone were subject to the corporate tax. This is more than three times as large as the revenue loss for charitable donations to all educational institutions, which was approximately $7 billion in 2007. The ratio of revenue cost of the asset earnings to charitable contributions is probably smaller for other types of nonprofits. Nonetheless, the revenue cost of exempting asset earnings for all charitable organizations was likely as high as $50 billion prior to the recession, about the same size as the cost of the charitable deduction. Returns on educational endowments were -18.7% in FY2009 and -2.5% over the 2007 through 2009 three-year period. Over the 10-year period, endowments earned a net return of approximately 4%. The recent economic downturn highlights how revenue losses associated with the tax-free accumulation of assets are susceptible to economic conditions. Revenue loss will fluctuate as returns to assets fluctuate. For FY2011, however, endowment returns had largely recovered, and the lost revenue for endowment earnings for educational institutions was projected at $22 billion, with overall costs were close to their FY2007 values. Returns, however, fell to virtually zero (-0.3%), due in part to large losses on international equities and small gains on domestic equities. These markets should eventually recover, however. Congress also addressed some issues associated with tax-exempt organizations themselves. Some of this concern was directed at circumstances where tax deductible donations are made to organizations that act as conduits and do not have charitable activities. Private non-operating foundations, recipients of donations that make grants to active organizations, are required to pay out 5% of assets. Donor advised funds and supporting organizations, however, had no payout requirements. These organizations were the subject of legislative interest, not only because of concerns about payout rates, but also about the possibilities of using these organizations, which were not subject to self-dealing rules as restrictive as foundations, for private benefit. Some changes for these organizations were adopted, but major changes, such as payout requirements, were not in all cases; instead, Congress authorized Treasury studies and decisions in the aftermath of those studies is uncertain. Although numerous legislative proposals have been introduced since 2001 directly relevant to the charitable sector, few of these proposals have become public law. The American Taxpayer Relief Act of 2012 ( P.L.