Public Policy Update – April 16, 2025
Philanthropy Southeast regularly provides members with 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 at jaci@philanthropysoutheast.org.
Legislation to Allow IRA Rollover to DAFs Introduced in House
A bill that would allow individual retirement account (IRA) holders to make qualified charitable distributions to donor-advised funds was introduced last week in the House.
The legislation (H.R. 2891), which has bipartisan support, was introduced by Reps. Adrian Smith (R-Nebraska) and Jimmy Panetta (D-California), who both serve on the House Ways & Means Committee.
“This bill provides seniors with greater flexibility to direct their charitable giving to support the causes they believe in,” said Smith. “This in turn opens the door to empower more American charities to do more good for our communities.”
Allowing IRA holders to rollover assets to DAFs has long been a policy priority for Philanthropy Southeast and the broader charitable sector.
“Older Americans can’t use their IRA charitable rollovers to give through donor-advised funds,” said Rep. Panetta. “Our bipartisan bill would fix that by allowing these rollovers to go into DAFs, giving donors the flexibility to give smarter and support a broader range of causes. This commonsense change empowers generosity, strengthens local communities, and reflects how people actually want to give."
The bill has attracted the support of three lawmakers from the Southeast: Reps. Vern Buchanan (R-Florida), Terri Sewell (D-Alabama), and Donald Beyer (D-Virginia).
What’s Ahead on Tax Policy
Now that Republicans in the House and Senate have passed identical budget blueprints, they must begin the work of filling in that blueprint with specific details on an array of issues, including provisions that could affect the charitable sector.
Politico has a round-up of the “biggest fights” that await lawmakers. Items like a universal charitable deduction or taxes on foundation endowments aren’t among those listed, but those ideas and others could be considered as lawmakers make adjustments throughout the tax code to accommodate other priorities.
Legislative language will likely not be available for some time – keep an eye out for more updates as details emerge.
Trump 2026 Budget May Propose Elimination of Head Start, Among Other Cuts
President Trump’s fiscal 2026 budget proposal hasn’t been officially released, but early reporting indicates it will call for the elimination of federal funding for Head Start, which provides child care and preschool programs to low-income families.
USA Today reported that, in addition to cutting Head Start funding, the proposal would also cut funding for the Low-Income Home Energy Assistance Program, which helps struggling households pay for heating and cooling.
The budget proposal is separate from the budget reconciliation process currently playing out in Congress. The president’s budget proposal is essentially a wish list of spending priorities for the coming year provided by the White House to Congress and has no binding effect on the spending bills Congress will ultimately pass.
However, the budget proposal does help set the parameters for the appropriations process, especially when the president’s party controls Congress.
Influential Group Calls on IRS to Investigate Foundations' Exempt Status
Earlier this month, the American Alliance for Equal Rights (AAER), which also brought the Fearless Fund case, requested the IRS investigate the tax-exempt status of the Gates Foundation, the LAGRANT Foundation, and the Creative Capitol Foundation, claiming they engaged in illegal racial discrimination by operating grantmaking and scholarship initiatives aimed at people of color.
While the IRS is not required to launch a review after receiving a request, the Gates Foundation moved quickly to open the scholarship program in question to all races, adopting new criteria for determining recipients, which it said it was already considering before the inquiry.
In an opinion in The Wall Street Journal Sunday after Gates announced the change, Edward Blum, the leader of AAER, urged the IRS to issue guidance to explicitly say that tax-exempt status is “a privilege conditioned on colorblind nondiscrimination.”
