On July 24, IECF CEO Michelle Decker presented to a group of professional advisors who have worked with IECF for many years to help families create lasting charitable gifts to the Inland Empire. The topic was recent legislation (AB 2936) designed to regulate an extremely popular charitable giving tool called a Donor Advised Fund or DAF. Michelle was joined by the new Executive Director of the League of California Community Foundations, Laura Seaman, who explained League’s opposition to the legislation.
While AB 2936 did not make it to a vote in the Senate, it is the second time the legislature has taken up regulating this philanthropic tool. With sponsors Cal Nonprofits (the state’s trade association for nonprofit organizations) and NextGen, the bill had popular support across the nonprofit sector. But while the growth of national or corporate DAFs in very large businesses like Schwab or Fidelity continue to grow and are probably the real target of this legislation, the impact on community foundations required that we oppose alongside our League colleagues.
Donor Advised Funds are a very accessible giving tool for donors of all means, including those who build a fund slowly through annual gifts. DAFs are advised by their original donors and then pass to the next generation. But after that generation, the funds become part of IECF’s unrestricted giving. IECF helps donors open funds with a minimum of $25,000, and we believe that in the Inland Empire, where we have the lowest philanthropic dollars of almost any part of California, we need DAFs to grow the permanent philanthropic assets for the long-term success of our nonprofits. IECF and the League will continue to monitor efforts to regulate DAFs while ensuring best practices and oversight – like having an “inactive funds policy” that requires donors to spend their grantable amounts. For more information about efforts to regulate DAFs, please contact Michelle at email@example.com.