Various Groups Voice Concerns About Senate Effort to Restrict Charitable Giving

In June, Senators Angus King of Maine and Charles Grassley of Iowa introduced a bill that would increase restrictions on charitable giving. The so-called Accelerating Charitable Efforts (ACE) Act would impose new mandates on foundations, distribution requirements on donor-advised funds and other restrictions on charitable giving. This legislation, if passed, will directly harm charities and those who benefit from their valuable work—some of our nation’s most vulnerable.

“The best way to expand and encourage giving is to ensure that everyone can participate, but more mandates and regulations on giving will make it harder for all Americans to support the causes they care about and those who are struggling,” said Philanthropy Roundtable President and CEO Elise Westhoff. “The Roundtable’s main concern is that restricting charitable giving will inevitably suppress giving overall, decrease grantmaking to charities and hurt communities in need.”

Similar efforts have been controversial in the philanthropic sector in the past, and many groups have joined the Roundtable in voicing concern or opposition to this legislation.

Concerns about the legislation include:

Statement from Council on Foundations, a nonprofit membership association of grantmaking foundations and corporations (June 10): “The ACE Act includes provisions that would negatively impact the philanthropic sector, our nonprofit partners and local communities. … Although we know foundations have a range of views on this proposal, we believe the changes in the bill will not achieve the ends we are all seeking to realize – greater support for nonprofits and communities, now and in the future, as we work together to advance the greater good.” 

Statement from Community Foundation Public Awareness Initiative, which includes more than 130 community foundations in nearly all 50 states working to educate the public about how they are improving communities (June 10).

“DAFs are popular for donors because they make giving flexible and easy. When it’s easy to give, people give more … the Community Foundation Public Awareness Initiative believes recent proposals to place restrictions on DAFs – including the latest legislation proposed by Sen. Angus King and Sen. Charles Grassley – are solutions in search of problems. If approved, these measures would reduce charitable giving – and ultimately hurt community nonprofits.” 

Statement from Matthew Evans, director of public policy at United Philanthropy Forum, a membership network of more than 90 regional and national philanthropy-serving organizations (PSOs), representing more than 7,000 funders, who work to make philanthropy better (June 10):

“It’s hard to see how it would propel more charitable giving.”

Statement from Eric Fingerhut, CEO of Jewish Federations of North America, which represents 146 independent federations and a network of 300 smaller communities across the continent (June 11):

“We are gravely concerned that efforts to undermine DAFs, the fastest growing vehicle for charitable giving in the U.S., would fundamentally change the nature of philanthropy and deprive those most in need. … DAFs play an especially important role during times of crisis in their ability to immediately funnel life-saving funds.”

Statement from Ken Nopar, senior philanthropic advisor at American Endowment Foundation, a donor-advised fund sponsor (June 11):

“The beauty of DAFs is how simple and inexpensive they are. Donors contribute to them and get one annual tax receipt, and then they go online and recommend grants to their favorite charities. If there are rigorous reporting and tracking requirements, fees will increase and donors will have less to give away, hurting the charities.”

Letter to Congress from national philanthropic organizations and signed by Community Foundation Public Awareness Initiative, Council on Foundations, Independent Sector, Philanthropy Roundtable, and United Philanthropy Forum (June 11):

“While some argue new restrictions on DAFs and private foundations are needed to ensure charitable dollars are reaching nonprofits, there is no data to indicate whether these measures would propel more charitable giving. As Congress considers reforms that impact foundations and other charitable organizations, we believe those changes should be supported by data, increase charitable giving, build trust in our sector, reflect the on-the-ground experience of both the organizations and donors being impacted and include voices from a broad representation of the philanthropic sector.”

Philanthropic “sector inclusion” letter, which was signed by more than 80 charitable sector organizations, asking congressional leaders to include input from the organizations and donors—and the charitable vehicles they use—being affected by recent legislation:

“In the midst of the unprecedented pandemic that continues to challenge us in 2021, some critics of philanthropy are seeking rushed, sweeping reforms to regulate the sector and its donors, suggesting it would increase charitable giving. Unfortunately, many of the proposed reforms could actually result in less charitable giving in the long run. … As we have seen amid the COVID-19 crisis and associated challenges, the sector is far too fragile to be regulated by unnecessary one-size-fits-all mandates.”

For more on this topic, please see the Roundtable’s resources:

  • Philanthropy Roundtable President and CEO Elise Westhoff issued a statement in response to the King-Grassley legislation.
  • Philanthropy Roundtable Policy Director Elizabeth McGuigan explains how the King-Grassley legislation will harm both charities and those who benefit most from them.

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