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S. 1981 Makes It More Difficult for Public Charities To Meet the Public Support Test

The Bill Would Treat All Anonymous DAF Contributions Received From Sponsoring Organizations As Coming From One Person— Whether That Is the Case or Not

 

Under current law, public charities must demonstrate broad support from the public to obtain and retain public charity status.

  • This bill would prohibit public charities from using DAF contributions to meet the public support test, unless:
    • The DAF sponsoring organization identifies the donor by name, in which case the contribution is treated as coming from that donor; or
    • The DAF sponsoring organization specifies that no individual had advisory privileges over a contribution.

Impact:

  • When it comes to public charities, which must demonstrate broad support, DAF contributions are critical. There are many reasons that donors may want to remain anonymous, including for religious or modesty reasons.
  • This bill ignores the fact that sponsoring organizations are themselves IRS designated public charities and would also make it difficult for recipient charities to prove broad support with multiple, independent, anonymous DAF donations.

 

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