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This is: US bill limiting patient philanthropy?, published by Max_Daniel on the Effective Altruism Forum.
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[Linked article might be behind a paywall. Sorry.]
I just read a New York Times article titled How Long Should It Take to Give Away Millions? Subtitle:
The promise of philanthropy was that the wealthy could enjoy tax breaks for their charitable contributions. The pandemic laid bare how accumulation can trump getting money to those in need. A Senate bill aims to change that.
[Boldface emphases in quotes will be mine throughout this post.]
It seems that a coalition of stakeholders including policymakers, advocacy groups, and some billionaires essentially has for a while objected to the idea of 'giving later'. For instance, they want to increase per-year spending requirements for foundations, regulate donor-advised funds (DAFs), and close what they perceive to be various loopholes.
The participants wanted, among other reforms, to ensure that money stashed in donor-advised funds, which had already earned those donors significant tax savings, ended up in the hands of working charities more quickly.
Last summer, Patriotic Millionaires — a group of about 200 wealthy individuals including the Disney heiress Abigail Disney — joined the left-leaning Institute for Policy Studies in asking Congress to double for the next three years the amount of their assets private foundations are required to pay out, to 10 percent.
Mr. Arnold, Ms. Madoff and others began recruiting support for proposals to regulate donor-advised funds and to curb practices by private foundations like counting salaries and benefits to family members toward their legal payout requirements. In December, the Initiative to Accelerate Charitable Giving was announced, with the support of big names in the field like the Ford Foundation, the Hewlett Foundation and the Kellogg Foundation.
This June, bipartisan legislation along these lines was introduced to Congress, sponsored by senators Angus King (I. - Maine) and Charles E. Grassley (R. - Iowa).
The bill would close a loophole in order to speed giving to working charities: Foundations would no longer be able to meet the 5 percent annual payout requirement by giving to a donor-advised fund where there currently is no payout requirement. The bill also would prohibit foundations from counting the salaries or travel expenses of a donor’s family members toward the 5 percent minimum.
For donor-advised funds, the proposed legislation would require a donor who wanted the full tax benefit right away to ensure that the funds were dispensed within 15 years.
If that is too fast a pace, or if donors are focused on giving over a longer time span, they could take 50 years to pay out. But they would need to wait until then to claim the full tax deduction.
(I don't know the status of this bill.)
I know almost nothing about US tax and nonprofit law. I don't have a good sense of the overall impact it would have on the philanthropy landscape, or on the feasibility of patient philanthropy. In any case it seems clear that the vast majority of giving that might be pushed from later to earlier times was not motivated by EA-style 'giving later' reasons anyway, and that EA-inspired patient philanthropy would at most be a freak casualty.
To be very clear, this means that I don't have a considered view on whether or not this bill would be net good, and what share of the reasoning behind it might be sound.
I found this article interesting primarily from a political communications, issue framing, and agenda setting perspective. In particular, I thought it was interesting that the discussion (at least as represented by this article) is an arguably muddled mix of empirical concerns about unintended tax loopholes, a perceived linkage to the more general issue of wealth inequality,...
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