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Donor advised funds attract a significant share of charitable giving and warrant Congress’s attention. The national sponsoring organization is distinct from other DAF sponsors. The national sponsoring organization’s exempt purpose is to spend money for the benefit of other 501(c)(3) organizations, and is best characterized as a fundraising organization. Given the national sponsoring organization’s exempt purpose, it is already subject to a facts and circumstances based payout. Because national sponsoring organizations fundamentally are vehicles for spending not saving, Congress should apply legislatively the commensurate in scope test and require that national sponsoring organizations spend contributed funds over a specified time period. The goal is to provide a spending period long enough so as not to alienate new donors, but short enough so as not to extend unduly the delay to charity that results when DAFs are used as public charity substitutes. Congress also should note that DAFs increasingly are used for noncash charitable contributions. The positive effect will be to make property conversions more efficient. The negative effect will be to accentuate the broken system for property contributions at great expense. DAFs present an opportunity for Congress to reduce the cost of the subsidy for property contributions and move to a net benefit to charity approach to the deduction.


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8 Sep 2022
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  • Subject
    • Administrative Law

    • Banking and Finance Law

    • Business Organizations Law

    • Law and Economics

    • Law and Society

  • Event date
    • 23 October 2015

  • Date submitted

    8 September 2022