Mary’s Pence believes that money that can contribute to the work of addressing and changing unjust systems should be used, not saved. It’s for that reason that we endorse the Emergency Charity Stimulus proposal to request that 5% more funds be released from private foundations and Donor Advised Funds (DAFs) and made available to nonprofits working on the frontlines during the pandemic.
Five percent might not seem like a lot, but it could actually mean the difference between whether or not $200 billion in charitable dollars would be available to nonprofits. The Emergency Charity Stimulus proposes simple and temporary changes to laws governing how much private foundations and donor-advised funds (DAFs) are minimally required to pay out each year. The proposal would double the minimum mandate for private foundations and DAFs from 5% to 10% annually. The result of which is an estimated $200 billion that could be available to charities responding to important and immediate needs that have only been compounded as a result of the current worldwide health crisis.
According to Charity Reform Initiative of the Institute for Policy Studies, about $1.2 trillion in wealth is warehoused in private foundations and DAFs. “Wealthy donors already took substantial tax breaks when they set up these funds – sometimes decades ago – yet the law allows 95% of private foundation assets and 100% of donor advised fund dollars to remain unspent, year after year.” That’s why they are urging nonprofit leadership to support the proposal that would make private foundations and DAFs release more of their funds to be what they are intended to be – charity donations.
For more information about the Emergency Charity Stimulus, click here.