New Senate Bill Would Hurt Charities and Those They Serve
In an op-ed at The Hill.com today, Roundtable Director of Policy Elizabeth McGuigan writes about the potential damage that proposed legislation, the ACE Act, would cause to philanthropy.
“Sens. Angus King (I-Maine) and Charles Grassley (R-Iowa) recently introduced a bill called the “Accelerate Charitable Efforts Act.” The problem is, the measure would have the opposite effect.
Among many concerns the charitable sector has with the legislation, there are three major threats to charitable givers and those in our communities that they serve.
. . .
First, the bill appears to vilify donor-advised funds, or DAFs, which are personal charitable giving accounts. Anyone can open a DAF, often with low or no minimums, and every dollar a donor puts into a DAF is immediately and irrevocably dedicated to charitable giving. These giving vehicles are a good way to commit to giving while having more time to think through strategic gifts or to allow funds to grow and appreciate for a larger ultimate donation to a charity. Without the overhead costs of starting a private foundation, DAFs make giving easy, accessible, and open to everyone.
Yet, the Senate bill would handcuff DAF donors by requiring that all funds be paid out within 15 years, or 50 years if a donor is willing to delay claiming a tax deduction for their gifts. Those that do not pay out within this arbitrary timeline would face a 50 percent tax on the charitable funds. In other words, the government would dictate when you must give your funds to charity, or it will take half of those dedicated charitable resources. Donors would lose the ability to save and grow their gifts over time, and charities would receive smaller gifts than might otherwise be the case.”