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Public Policy Update - February 2022


Each month, Philanthropy Southeast provides members with monthly updates on the latest public policy developments in Washington and state capitols around the region, analyzing their possible impact on the charitable sector. If you would like to see an issue featured in a future Public Policy Update, contact Jaci Bertrand, Philanthropy Southeast's vice president of member engagement, at jaci@philanthropysoutheast.org.
 

Registration Now Open for Virtual Foundations on the Hill
 

REGISTER

 

Foundations on the Hill 2022, taking place April 5-7, will provide philanthropic leaders their best opportunity all year to discuss the impact and importance of their work with the policymakers who represent them in Washington.

Like last year, Foundations on the Hill 2022 will take place online, making it easy to participate no matter where you are.

Why attend Foundations on the Hill? Here are a few reasons:

  • Inform and educate lawmakers and key staff members about the work you do and how it supports people in your community
  • Advocate for policies and priorities that amplify the impact of your work and improve lives
  • Build relationships and partnerships with lawmakers that can offer lasting benefits
  • Help lawmakers understand the importance of philanthropy within their own districts and states

Foundations on the Hill is designed for newcomers and policy veterans alike! The Philanthropy Southeast staff will support you and your colleagues by facilitating meetings, offering trainings and providing you with compelling materials that help you tell your story.

You can also register now for two upcoming webinars that will ensure you're prepared for Foundations on the Hill:

Why You Belong at Foundations on the Hill
Thursday, February 24 at 10:00am (ET) / 9:00am (CT)

FOTH 2022: What You Need to Know
Tuesday, March 29 at 2:00pm (ET) / 1:00pm (CT)

During Foundations on the Hill, you'll also be able to attend sessions presented by our partners at the United Philanthropy Forum, Independent Sector and Council on Foundations that will help you understand the current legislative aspect and help you engage with policy and advocacy year-round!

 

House Version of ACE Act Introduced

This week, two U.S. House members, Rep. Chellie Pingree (D-ME) and Rep. Tom Reed (R-NY), introduced their own version of the Accelerating Charitable Efforts (ACE) Act – a companion to an identical Senate bill that was introduced last yearBoth versions of the ACE Act are modeled after the Initiative to Accelerate Charitable Giving proposal put forward by billionaire philanthropist John Arnold and Boston College professor Ray Madoff. 

Both bills would make several changes relevant to private foundations and donor-advised funds. Here are some of the bill’s key provisions:

Changes to Donor-Advised Funds: The bill would replace the current structure of DAFs with two new categories of the giving vehicles, one of which would offer better tax benefits to those who disburse assets within 15 years while the other would delay tax benefits until funds are exhausted. 

  • 15-Year DAFs: DAF holders who choose this vehicle could take an immediate tax deduction for their gifts but would be required to disperse all funds or relinquish control of their DAF within 15 years, otherwise face a 50 percent excise tax penalty on the value of the assets held in the DAF. 
  • 50-Year DAFs: Donors who want more than 15 years to distribute funds from their DAF could elect this vehicle and still receive capital gains and estate tax benefits upon their donation. However, they would not receive a tax deduction for their gift until the funds are distributed. All funds would be required to be distributed within 50 years of donation to the DAF.

The bill does include a significant exemption for DAFs managed by community foundations. The legislation allows donors with less than $1 million in assets in a DAF managed by a community foundation to be exempt from the new payout rules, and DAF accounts larger than $1 million at community foundations would either be subject to a 5 percent payout each year or have to distribute funds within 15 years. 

The bill also includes provisions intended to prevent donors of complex assets, such as private stock holdings and real estate, from claiming tax benefits that exceed the dollar amount for which the asset is eventually sold.

Changes Affecting Private/Family Foundations: Private foundations would no longer be able to count disbursements to donor-advised funds or family members’ travel and salary expenses toward their 5-percent minimum payout requirement. The legislation offers additional benefits to private foundations that payout more than 7 percent in any year by waiving the annual 1.39 percent excise tax on investment income that all private foundations currently pay.

Additionally, private foundations created after the implementation of the ACE Act would be completely exempt from the excise tax if they agree to grant out all assets within 25 years of founding.

Philanthropy Southeast is keeping a close eye on both versions of the ACE Act and will provide updates if either bill moves toward passage.

 

House Committee Requests Information on Disparities

The bipartisan Select Committee on Economic Disparity & Fairness in Growth, formed in the House at the end of 2020 to address income and wealth inequality in America, is requesting information on many issues of concern to philanthropy, including housing, higher education and job training, and child and families. 

The committee, which will act as a resource to Congress, is studying the causes and consequences of economic disparity. It is interested in hearing from the charitable sector, as well as academic experts, community leaders and the private sector. It has also announced plans to hold at least one hearing this year in the Southeast.

The committee is currently requesting information from a broad range of stakeholders to help inform its work. The panel plans to use these responses to help shape its work over the next year, source witnesses for hearings and hear real stories from around the country. 

While we can’t predict what policy recommendations the committee will ultimately put forward, by sharing your success stories, solutions and recommendations, you can ensure voices from the Southeast are heard and taken into consideration. 

You can review the full list of questions here and submit a response here. Please note, by submitting a response you are acknowledging that these responses could become public. Submissions are due by February 15. 2022. 

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Philanthropy Southeast
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Atlanta, GA 30303

Visiting Philanthropy Southeast:
All staff are working remotely at this time but can still be reached via email and by calling (404) 524-0911.

Hours:
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Phone: (404) 524-0911
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Mission: Philanthropy Southeast strengthens Southern philanthropy, welcoming our members to listen, learn and collaborate on ideas and actions to help build an equitable, prosperous South.