Pandemic fuels debate over mandating greater philanthropic giving

U.S. Capitol.
U.S. Capitol.
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The philanthropic sector is divided over whether Congress should mandate greater spending by foundations and donor-advised funds.

Pandemic fuels debate over mandating greater philanthropic giving

Some philanthropists want to require foundations and donor-advised funds to boost giving significantly over the next three years.
February 26, 2021

As the coronavirus pandemic enters its second year, questions are being raised over whether Congress should force foundations and donor-advised funds to increase their giving, the Associated Press reports.

Some philanthropists are calling on Congress to require these philanthropic groups to contribute at least 10% of their investment assets each year for three years, which, they say, will spur $200 billion in charitable giving. Private foundations are currently mandated to give 5% of their assets annually. Donor-advised funds don’t deal with any similar restrictions forcing them to give a certain amount within a certain timeline.

Others such as John Arnold, co-founder of Arnold Ventures, have proposed a plan that would require assets in a donor-advised fund to be spent within 15 years. It would also limit certain forms of spending from counting toward a private foundation’s payout obligations, such as paying salaries for family members or putting money in donor-advised funds. But foundations wouldn’t have to pay an excise tax for any year that they donate 7% of more of their assets.

But some more conservative-leaning leaders in philanthropy aren’t on board with any government involvement in private donations, even if temporary. “We actually don’t think it will accelerate giving at all,” Elise Westhoff, president and CEO of the Philanthropy Roundtable, told the Associated Press about Arnold’s proposal. “It’s really a solution in search of a problem.”

NYN Media reporter Kay Dervesh
Kay Dervishi
is a staff reporter at NYN Media.