Reps on Friday. Brian Higgins (D.N.Y.) and Mike Kelly (R-Penn.) sent a dear colleague letter expressing support for Donor-Aided Funds (DAFs). The letter was signed by 11 members of the Ways and Means Committee, five Republicans and six Democrats, and highlights the effectiveness of DAFs and how they have been used during the pandemic to quickly provide needed aid to sick communities. . The letter addresses recent calls from critics to reform the rules surrounding DAFs and highlights how DAFs are an important tool for charitable giving, especially during times of growing need. Here are some key excerpts from the letter:
On efforts to limit DAFs: ,Active groups have begun lobbying Congress for significant reform of the rules surrounding the DAF and family foundations, and legislation has been introduced to that effect. We are concerned that these proposals will reduce philanthropic donations and restrict the ability for generous families to respond quickly to crises such as the COVID-19 pandemic.,
On donating during COVID: ,American nonprofits and foundations have stepped up in response to the COVID-19 pandemic. Donors and charities have donated record amounts to help their neighbors in need – and they’ve made sure their dollars reach those affected as quickly as possible.,
On the effectiveness of DAF in response to COVID: ,While the COVID-19 highlights the power of the DAF, the explosion in giving was not triggered by the pandemic. As per NPT 2021 Donor-Aided Fund ReportThe charitable grant from DAF has more than doubled in the last five years. Additionally, for each year on record, the annual grant distribution rate for all DAFs has consistently been over 20 percent of assets. In fact, the payout rate for DAFs in 2020 stood at 23.8 per cent, the highest in a decade. And most DAF sponsors have passive funding policies in place to ensure that charitable assets make their way to working charities.,
Also last week, Accelerated Charitable Efforts (ACE) ACT sponsor reps. Chelly Pingree (D-ME) and Tom Reid (R-NY) began circulating a Dear Allies letter of their own, which outlines some of the provisions of the ACE Act and encourages members to support the bill. does. It suggests that the DAF prevents money from going into the hands of “real charities” and suggests that money going out today is always better than money going out in the future.
Stay tuned for how these efforts go along with fellow lawmakers.
