New Coalition of Philanthropists, Major Foundations Launches to Increase Funding to America’s Charities During Pandemic and Beyond
Philanthropists and leaders of major foundations have launched the Initiative to Accelerate Charitable Giving, a coalition dedicated to promoting common-sense, non-partisan charitable giving reforms that increase and accelerate resources to working charities, while enhancing the efficacy of the philanthropic sector writ large. Coalition members represent a broad spectrum of interests across philanthropy, and include private foundations such as the Ford Foundation, Hewlett Foundation, and W. K. Kellogg Foundation; philanthropists John Arnold, Kat Taylor, and Melanie Lundquist; and law professors Ray Madoff and Roger Colinvaux, among others.
As the nation wrestles with the health and economic effects of COVID-19 – both of which have exacerbated social inequities, from systemic racism to a worsening hunger crisis – the work of charities has never been more important. Yet as the demand for charitable services has significantly increased, charities’ revenues and resources have decreased, leaving them in urgent need of support.
Currently, $1 trillion sits in private foundations and $120 billion sits in donor-advised funds (DAFs) – money that could be used to support charities and the millions of people they serve. Today’s tax laws do not sufficiently incentivize these philanthropic vehicles to distribute their funds to charities in a timely fashion, even though donors receive tax benefits upfront – meaning the government is deprived of tax revenue without seeing a return benefit to society. Further, approximately only 10% of Americans receive tax benefits for their charitable giving in the first place.
“If you’re wondering about the disparity between the immense philanthropic wealth in this country and the daily fight most charities have to wage to stay alive, look no further than charitable tax laws,” said philanthropist and Coalition member John Arnold, Founder and Co-Chair of Arnold Ventures. “The rules disincentivize philanthropists from giving with any sense of urgency: foundations and donor-advised funds get immediate tax breaks, and feel no pressure to deliver resources to where they are needed: charities solving this generation’s most pressing problems.”
The coalition released a statement of principles signed by its members that outlines federal policy proposals that would significantly expand and accelerate the flow of resources to working charities from private foundations, DAFs, and individuals. The Initiative proposes the following common-sense reforms:
- 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 DAFs, 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.
More information about the Initiative to Accelerate Charitable Giving is available at acceleratecharitablegiving.org.