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New Reports Highlight Growth of Donor-Advised Funds and Giving Circles

Author: Stephen Sherman

Dec05

Even taking into account the Great Recession, we’ve generally seen the numbers, assets, and giving for private and community foundations in the United States continue to rise over the past decade. Over the long term, that growth has been steady and alludes to the staying power of foundations in spite of changing social, economic and political circumstances. However, while foundations have the capacity to make transformative grants in their respective communities, collectively they account for a relatively small share of charitable giving when compared with contributions from individual donors.

Donor-advised funds (DAFs) and giving circles lie somewhere in between foundations and individuals on the giving spectrum and are two of the fastest growing philanthropic vehicles. Two recent studies offer insight into the growth of these giving instruments in the United States.

The 2017 Donor-Advised Fund Report, published by the National Philanthropic Trust, surveys the growth of DAFs in the United States from 2010-2016 and provides an analysis of funds by sponsor type. Data was gathered from over 1,000 organizations that sponsor DAFs, including national charities, community foundations and single-issue charities. In 2016, there were approximately 285,000 individual donor-advised funds across the country – more than three times the number of private foundations. Nearly 44,000 DAFs are housed in organizations within SECF’s 11-state footprint, representing around 15 percent of all donor-advised funds in the country.

The 2017 report offered a glimpse at the growth and concentration of DAFs by state. Massachusetts (82,643), California (38,590) and Pennsylvania (20,819) were home to more than half of all DAFs in the country in 2016 thanks to prominent charities such as Fidelity and Vanguard. Georgia was one of the fastest-growing states for DAFs and ranked fourth nationally with 19,736 funds, slightly ahead of New York (18,481). Georgia’s leading position can be largely attributed to the National Christian Foundation, located in Alpharetta, which houses more than 16,000 donor-advised funds. Within the Southeast region, Florida, North Carolina, Tennessee, and Virginia also host significant numbers of DAFs.

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January 2020 Public Policy Update

Author: Southeastern Council of Foundations

Jan07

Each month, SECF 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, SECF's vice president of member engagement, at jaci@secf.org.


SECF Public Policy Committee Welcomes New Leadership, Prepares for a Busy Year Ahead

SECF's work on public policy is heading into 2020 with plenty of momentum following crucial victories in Washington to cap off 2019, including the simplification of the private foundation excise tax and the repeal of harmful changes to the unrelated business income tax (UBIT).

The year ahead promises to be busy and unpredictable, particularly with elections on the horizon. In a few weeks, SECF's Public Policy Committee will meet to discuss our strategy for the year and the priorities we will present to lawmakers at Foundations on the Hill and beyond.

Leading the committee in 2020 will be two co-chairs: Jane Alexander, president and CEO of the Community Foundation for Mississippi, and Susan DeVenny, president and CEO of the J. Marion Sims Foundation.

Jane provides a vital perspective on the many policy issues that affect not just philanthropy, but community foundations in particular. She has served as the president and CEO of the Community Foundation for Mississippi, based in Jackson, since 2012. During that time, the foundation's assets have grown to $60 million, with more than 250 funds. Jane has led the foundation in working on a number of public-private partnerships, including an initiative between the Mississippi Governor's Office, the Mayor of the City of Jackson and the W.K. Kellogg Foundation to study and identify challenges facing the Jackson Public School system, and suggest community-based solutions to address those challenges. 

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Public Policy Update - June 2020

Author: Southeastern Council of Foundations

Jun02

Each month, SECF 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, SECF's vice president of member engagement, at jaci@secf.org.

 

Pandemic Response Legislation

Congress Weighing Changes to Paycheck Protection Program: In the wake of the House nearly unanimously passing a bill that would provide more flexibility for businesses and nonprofit organizations taking Paycheck Protection Program (PPP) loans, Senate Republicans have voiced concerns. However, there is still a strong possibility of changes ultimately becoming law.

On May 28, the House, by a 417-1 vote, passed the Paycheck Protection Program Flexibility Act. The bill would extend the loan forgiveness window to 24 weeks, up from 8 weeks. The measure would also give recipients more flexibility in how they can use the loans by changing the so-called 75/25 rule. The new rule would require only 60 percent of the loan to go toward payroll to still qualify for forgiveness, down from the current 75 percent threshold. This legislation would also allow loan recipients to defer payroll taxes for a longer period of time.

Senate Small Business Committee Chairman Marco Rubio (R-FL) says there are technical errors in the House bill that could make it more difficult for recipients to get their loans forgiven, making it unlikely the Senate passes the House bill unchanged. The Senate is expected to move forward with its own set of changes to PPP, possibly extending the forgiveness window to 16 weeks.

Changes to PPP may also be folded into the so-called RESTART Act, which has been proposed by Sens. Todd Young (R-IN) and Michael Bennet (D-CO). This measure would extend the PPP loan forgiveness window to 16 weeks for businesses that have seen their revenues decline at least 25 percent during the original 8-week window. 

The bill would also create a new loan program to serve businesses and nonprofits with fewer than 5,000 employees. These loans – capped at $10 million – would be available to 501(c)(3) organizations and several other types of tax-exempt organizations. The loans would cover payroll, benefits and fixed operating expenses for recipients that have experienced significant revenue losses during the pandemic. Loan recipients with fewer than 500 employees would have an opportunity to have their loans forgiven, while nonprofit employers with more than 500 employees would receive more favorable loan terms without forgiveness.

A detailed summary of the RESTART Act with loan and repayment examples can be found here.

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Public Policy Update - July 2020

Author: Southeastern Council of Foundations

Jul07

Each month, SECF 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, SECF's vice president of member engagement, at jaci@secf.org.


Bills to Expand Charitable Giving Introduced in House and Senate

Two Southeastern lawmakers are among the lead sponsors of bipartisan, bicameral proposals to expand the temporary universal charitable deduction put into law earlier this year.

In the Senate, Sen. Tim Scott (R-SC) is a lead sponsor of the Universal Giving Pandemic Response Act (S. 4032), which would expand the temporary $300 universal charitable deduction included in the CARES Act to one-third of the standard deduction, or roughly $4,000 for individuals and $8,000 for joint filers. The increased deduction would be available for tax years 2019 and 2020. Rep. Mark Walker (R-NC) has partnered with Rep. Chris Pappas (D-NH) to introduce an identical version of this legislation in the House.

The lead sponsors on the bill have indicated they are trying to get the expansion included in the next COVID relief package, which is expected in late July. The Senate Finance Committee is also considering expanding the universal charitable deduction in the next package, but committee members are also interested in adding compliance provisions to reduce the cost to the federal government and avoid fraud.

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Mission: The Southeastern Council of Foundations serves, connects, strengthens and champions philanthropy and philanthropic infrastructure in the South.