Today, Senator Angus King (I-Maine) and Senator Chuck Grassley (R-Iowa) introduced the Accelerating Charitable Efforts (ACE) Act, which will get more money to our nation’s charities faster. The ACE Act reflects the policy ideas outlined in the Initiative to Accelerate Charitable Giving’s statement of principles and puts them into action in a pragmatic and thoughtful way.
As reported in The New York Times:
On Wednesday, the effort will make its way to Congress, where Senators Angus King of Maine and Charles E. Grassley of Iowa are introducing legislation to attempt a version of what the group outlined in that first brainstorming session: a way of ensuring that money promised to charity more quickly gets to the people who need it.
The promise of philanthropy was that the wealthy could enjoy generous tax breaks for their charitable contributions in return for helping society in the ways they saw fit. The pandemic laid bare how, with a few exceptions, accumulation trumped distribution.
More and more of the money given to charity has been delayed, sometimes for decades, if not marooned indefinitely in the endowments of private foundations and in the donor-advised funds, which are akin to 401(k)s for philanthropy but have few regulations or requirements.
Read IACG’s statement and what others below are saying about this positive step forward for America’s charitable organizations:
John Arnold, Co-Founder of Arnold Ventures: “As our country grapples with a pandemic, an economic recovery and deeply rooted inequality, it is clear the status quo for charitable giving incentives is not working. Congress must act to close the loopholes that warehouse charitable dollars in intermediary vehicles and slow the flow of charitable dollars to working charities. Charities are at the frontlines of our communities, and it’s time to unlock the more than one trillion dollars promised to them. Today, legislation aimed at addressing these issues was introduced. I applaud Senator Angus King and Senator Chuck Grassley for their leadership on this important issue and urge other Members of Congress to support this bill.” (LINK)
Melanie Lundquist, Activist Philanthropist: “Now is the time to fix our clogged philanthropic pipeline. As a longtime advocate for strengthening the philanthropic sector, I applaud Senator Angus King and Senator Chuck Grassley for introducing legislation that will better incentivize charitable giving and push other donors to get money to work quickly for those charities it has been pledged to help. I urge other Members of Congress to pass the Accelerating Charitable Efforts (ACE) Act.”
Ray Madoff, Law Professor at Boston College: “The ACE Act recently introduced by Senators King and Grassley impose sensible guardrails designed to ensure that the charitable exit ramp leads to public good and not just unenforceable IOU’s.” (LINK)
Paul Major, President and CEO of the Telluride Foundation: “The work charities do in local communities cannot be understated. Just take the impacts of COVID – our local food banks were extraordinary. However the original federal charitable giving tax rules no longer make these crucial organizations a priority. I applaud Senator Angus King and Senator Chuck Grassley for introducing the Accelerating Charitable Efforts (ACE) Act. This bill puts charities back at the center of our charitable giving laws again and recognizes the unique role of community foundations while ensuring funds in charitable vehicles get to work to meet the needs now. As a community foundation leader, I strongly urge Congress to quickly pass this legislation and call upon members of the philanthropic community to support these efforts to get more resources to charities faster.”
Michael Sheldrick, Co-founder and Chief Policy and Government Relations Officer for Global Citizen: “Our charities deserve our support and desperately need more funding to carry out their important work. … Recently, two members of the U.S. Senate took up this call to action, Senator King of Maine & Senator Grassley of Iowa, when they chose to introduce legislation to make sure that our charities are well funded in their work. This legislation proposes common sense changes to charitable giving deductions to encourage more money to flow to America’s charities and out of wealth warehouses called Donor Advised Funds.” (LINK)
Mark Swann, Executive Director of Preble Street: “The critical role that charities play in Maine and communities across the country has never been more evident than in the past year. And yet, while these organizations change and save lives, thousands are at risk of closing. Now more than ever, Congress must restore the connection between charitable tax benefits and benefits to charities. Getting more money to our nation’s charities faster means more resources and help for Mainers and Americans in need. We are grateful to Senator Angus King and Senator Chuck Grassley for their leadership in introducing legislation that strengthens and invests in America’s charitable organizations. I urge Congress to swiftly pass the Accelerating Charitable Efforts (ACE) Act.”
Kat Taylor, Founder of the TomKat Foundation, Co-Founder of Beneficial State Bank: “The pandemic reminds us there is a dire need to rebuild our infrastructure around equity. Common sense charitable reforms, like the Accelerating Charitable Efforts (ACE) Act, will close loopholes and make philanthropy more accountable. It will especially encourage giving at a time when frontline communities need and deserve it most.”
Dean Zerbe, Former Senior Counsel and Tax Counsel to the Senate Finance Committee: “Great to see common sense bipartisan charitable reform championed by @ChuckGrassley and @SenAngusKing. Billions in more dollars to help those most in need.” (LINK)
Read below why these philanthropic leaders and experts believe now is the time to invest in America’s charities:
James Andreoni, Distinguished Professor of Economics at the University of California, San Diego: “Charitable gifts are public investments, not expenses. While donated dollars are sitting in DAFs, they could be getting double or triple the returns if they were invested in early childhood development, or in people’s health. Likewise, charitable investments to slow climate change, stem a deadly famine, or stop a lethal pandemic can have social returns that far surpass the S&P 500.” (LINK)
Stephanie Ellis-Smith and Christina Lewis, Co-Founders of Give Blck: “We have seen first-hand how structural issues in the philanthropic sector slow money getting to working charities and the out-sized impacts they have on communities of color. The lack of transparency of donor-advised funds makes it difficult for organizations to cultivate relationships with donors. Not to mention the fact that despite the hefty payouts during the pandemic, commercial DAFs are still sitting on billions of dollars that are already dedicated to the commonweal but sitting fallow instead. While these difficulties hit all organizations, the hit is disproportionally devastating to Black and BIPOC groups.” (LINK)
Stephen Foley, Deputy US News Editor of the Financial Times: “A survey of US non-profits suggests they squeezed out a 2 per cent rise in funding in 2020 — a year when food banks were overwhelmed and the problems of racial injustice were laid bare. A year after the pandemic hit, employment at charities and other non-profits in the US was down 7 per cent, according to Johns Hopkins University data. Yet the money bottled up by financial intermediaries surged in 2020.” (LINK)
Peter Martin, Director of Philanthropy at Tides: “According to the National Philanthropic Trust, charitable assets held in donor-advised funds in the United States currently total $121.42 billion. That’s money that could be deployed right now to fuel real and lasting change on issues from poverty and injustice to education, healthcare, and the environment. But all too often, the money in donor-advised funds just sits there.” (LINK)
David Risher, CEO and Co-Founder of Worldreader: “There has never been a more important time to put charitable dollars to work. While many non-profits continue to work tirelessly to keep kids learning and provide other essential services during the pandemic, they are struggling and need our support. We must restore the connection between charitable tax benefits and benefits to working charities so that they can continue serving our communities and addressing the most pressing issues of our time.” (LINK)
William A. Schambra, Senior Fellow at the Hudson Institute: “When conservatives make the argument for localism, for civil society, for a restoration of a Tocquevillian vision of America where smaller civic organizations address problems, working charities are at the heart of that endeavor. DAFs are an enormous whirlpool sucking that money away from charities into accounts that are institutionally inclined to be reluctant to disburse money.” (LINK)
Peter Singer, Philosopher, Professor of Bioethics, and Founder of the charity The Life You Can Save: “There is clearly a problem when the government has provided significant tax benefits for more than $1 trillion, but that vast sum sits in private foundations and donor-advised funds instead of being used effectively to meet the challenges the world faces.” (LINK)
Katherine Vockins, Founder and Executive Director of Rehabilitation Through The Arts: “As an organization that receives the majority of its funding from private foundations and individuals, RTA applauds efforts to move money out of foundations and DAFs faster, potentially allowing RTA to expand its rehabilitative programs to a broader population within the facilities where we operate, to open additional NYS prisons and move into prisons outside of New York State. Additional funding—including funds released from appropriate DAFs and foundations—truly would have a direct, positive impact on how incarcerated people re-enter society after incarceration, affecting their families and communities as well.” (LINK)