Charitable Giving Updates from Washington DCCharitable Giving Updates from Washington DC
DAFs and crypto have caught the attention of Capitol Hill.
A few new developments in Washington, D.C. may affect those involved in philanthropic planning:
DAFs on IRS & Treasury Priority Agenda
Earlier this month, the Internal Revenue Service and the Treasury Department released their Priority Guidance Plan for 2022-2023, which lays out what regulatory projects the agencies have on the docket from now through June of 2023.
On the list are four projects relevant to the use of donor-advised funds (DAFs). The projects, which were first noticed in 2017, are aimed at helping the IRS better enforce current laws around DAFs and prevent abuse. The Notice requested comments on a number of activities, including private foundation use of DAFs to meet their 5% payout requirement and the use of DAFs to meet the public support test for a charity.
The charitable sector has been waiting for these proposed regulations for years, and while we hear they may be in the final stages of process, it could still be some time until they are made public. Once they’re noticed, however, stakeholders will have the opportunity to submit feedback in the form of comments.
Calls for Stronger Crypto Policies and Philanthropy’s Response
On Nov. 1, the major crypto exchange FTX filed for bankruptcy, throwing the digital asset sector into turmoil. FTX’s founder and former CEO Sam Bankman-Fried’s once strong reputation on Capitol Hill appears to be significantly damaged due to the role he may have played in the exchange's collapse. Indeed, Biden administration officials and lawmakers on both sides of the aisle are now working to reexamine proposals Bankman-Fried and others lobbied for that may be too light of a touch to offer consumers adequate protection.
It’s unclear whether crypto legislation can move through Congress considering how narrow partisan margins will be in both chambers next year. Despite all this uncertainty, nonprofits engaged in the crypto space appear to be forging ahead with their projects. As policymakers write rules to protect consumers and create trust in this emerging asset class, nonprofits that stand to benefit from donations of these assets would be smart to provide input on how changes in policy could impact charitable giving.
