Donor Advised Funds & Charitable Giving
Holding Donor-Advised Funds Accountable
Kat is committed to decolonizing philanthropy by holding Donor-Advised Funds (DAFs) accountable. DAFs are a philanthropic vehicle that could do so much more to support strained nonprofits, including in communities of color and among our most vulnerable populations. With common sense reforms we can ensure DAFs solve the problems of today, instead of being used as a tax haven, and stockpiling money for the wealthy. There is over $120 billion in these Donor-Advised Funds which needs to be put towards helping Americans, now – not saved for future generations when millions of Americans are suffering untold damage.
To help fix this problem, in 2019 and 2020 Kat sponsored bills in the California legislature (AB 1712 – 2019) (AB 2936 – 2020) with the goal of ensuring that the diversion of government tax proceeds allowed by the DAF tax deduction is justified by the timely release of funds to help communities who need it most. AB 2936, was one of the first bills passed by any state legislative chamber that would require additional regulations of DAFs to ensure more positive societal outcomes.
At a time when COVID-19 has only increased the urgency with which the $120 billion stockpiled in DAFs should be granted out, Kat will continue to pursue avenues to hold Big Philanthropy accountable to its true mission, instead of allowing philanthropy to become another Wall Street.
The Initiative to Accelerate Charitable Giving
Kat is a supporter of the Initiative to Accelerate Charitable Giving (IACG) at the federal level, including the bipartisan Accelerating Charitable Efforts (ACE) Act sponsored by Senators Angus King (I) and Chuck Grassley (R) As our nation struggles with the horrible effects of the pandemic, systemic racism, and a hunger and health crisis, the work that charities do has never been more important. Yet, the gatekeepers to funds that working charities need, Donor-Advised Funds (DAFs) and private foundations, are falling short of what is needed. Service providing nonprofits are struggling to operate during a time when DAFs and private foundations have record amounts of money ($1.3 trillion) sitting in their coffers. Kat understands that today’s tax laws do not sufficiently incentivize DAFs and private foundations to distribute their funds to charities in a timely way, even though donors receive their tax benefits upfront, depriving the government of critical tax revenues for helpful programs. The IACG is a modest proposal that will do the following:
- For private foundations, close loopholes to better ensure that distributions qualifying for the payout requirement are available for use by working charities; and incentivize greater payout through reforms to the excise tax.
- For donor-advised funds, adopt measures to make sure that DAF accounts are distributed to working charities within a reasonable period of time.
- For individuals, incentivize greater giving by expanding and extending the new non-itemizer charitable deduction in a cost-effective way.
Related Legislative Materials