In an op-ed published in The Center Square, Philanthropy Roundtable’s Director of Government Affairs Megan Schmidt stressed the importance of flexible giving vehicles, like donor-advised funds, that are vital to California’s charitable sector. She also warned against legislative threats that could discourage charitable giving in the Golden State in 2024.
Below are excerpts from the article entitled “How Charitable Giving Helps California”:
“Nearly a third of the year’s charitable giving will take place this month, and Americans unofficially began this season of generosity on Giving Tuesday, donating $3.1 billion to U.S. nonprofits in a single day. As Californians open their pocketbooks to those in need – helping to address challenges like homelessness, poverty alleviation and access to medical care – it’s a good time to remember they are most effective in their charity when they are free to give to the causes they care about most.
That’s why California’s leaders should resist efforts that would restrict charitable giving and ultimately reduce support for nonprofits tackling the Golden State’s biggest challenges. After all, a strong charitable sector strengthens our communities. Yet in 2023 alone, at least 22 states have considered legislation that threatens donor privacy and could chill charitable giving.
With needs high on multiple fronts, flexibility in giving is more important than ever. A new Philanthropy Roundtable report highlights how California-based community foundations are using donor-advised funds (DAFs), charitable savings accounts, to make a difference. For example, contributions to DAFs are helping organizations provide specialized services for senior citizens, giving children access to environmental education programs and instilling in them a love for reading.
DAFs are popular tools for giving around the country. They give individuals the ability to set aside funds—used only for charities—that can be donated immediately or in the future. Due to their versatility and relative simplicity, DAFs have become the fastest-growing vehicle for charitable giving in recent years. In California, our research of 22 community foundations showed the average DAF payout rate in fiscal years 2021 and 2022 was an impressive 22%. Critics claim DAFs are withholding money while donors still get tax breaks. But our research clearly demonstrates a steadfast commitment to regular and generous giving in the state.”
To read the complete article, please visit The Center Square.