In Star Wars, Episode IV (still the best one in my opinion!), when the Death Star looms large in front of the Millenium Falcon, Luke Skywalker mutters, “I have a very bad feeling about this.”
When it comes to federal regulation of donor advised funds, I’m beginning to feel the same way.
Donor advised funds (DAFs) have somehow taken on a misperceived reputation as something less than what they are: a simple yet flexible way for charitably-minded people to make great grants to wonderful organizations. But somehow, the drumbeat for further stifling regulations grows larger, including a recent story in The Economist. That magazine is not known as an organ for radical viewpoints, yet in their March 23 issue they had DAFs in their crosshairs. “Many philanthropists sing DAFs’ praises,” the article concludes, “But that does not prove their worth to society as a whole.”
Just who, then, is our voice in Washington to “prove the worth” of DAFs? That common voice speaking for all of us is the Council on Foundations (COF). While many community foundations are part of regional associations and affinity groups that do a great job of serving our field, when it comes to protecting our interests in Washington, no organization can match the depth of talent and breadth of knowledge that is provided by COF.
For instance, when then-House Ways and Means Committee Chair Dave Camp introduced the Tax Reform Act of 2014 that included a proposed five-year mandatory payout for gifts to donor advised funds, the Council began a full court press on the Hill to educate lawmakers about the concept of endowed funds and why a payout requirement for donor advised funds would defeat the concept of long-term charitable support that so many nonprofits depend on. Thanks in part to the work of the Council, a payout requirement for DAFs appears to be off the table, but currently, lawmakers are considering more detailed reporting requirements for DAFs in exchange for allowing the popular IRA charitable rollover to be extended to DAF contributions. As a member of the Council, I’m heartened that the Council is working closely with congressional tax writing staff to ensure that any such reporting requirements take into consideration the unique nature of charitable giving and particularly year-end giving, and do not result in a skewed view of the data.
Thank you, Council on Foundations, for serving as our eyes and ears in the legal and regulatory environment of Washington. The Death Star may be looming, but we have The Force of COF on our side.
About the Author
David Bennett joined the Community Foundation of Greater Fort Wayne (CFGFW) as Executive Director in 1995. Since that time, CFGFW has grown from about $30 million to just over $140 million in assets, and last year awarded over $10 million in grants and scholarships. In March, David announced he will retire from the Community Foundation at the end of this year.
David resides in Grabill, Indiana with his wife of 34 years, LuAnn.