The Rise of Donor-Advised Funds: Why Congress Should Not Respond

Abstract

Should Congress respond? No. It would be wrong for Congress to respond to the “rise”. Why should a “rise” arouse Congressional action when a “rise” is precisely the expected outcome following Congress’s “legitimization” of donor-advised funds in 2006 by incorporating them into the Internal Revenue Code? We do not even have Treasury Regulations addressing permissible distributions yet. Depending on how those regulations turn out, we could see significant changes in distribution policies. Why would Congress act now when we have not yet seen donor-advised funds firing on all cylinders because we still await the much-anticipated operating guidance?