Last week, the Central Indiana Community Foundation (CICF) joined community foundation leaders from across the country in Washington, D.C., as part of an advocacy effort led by the Community Foundation Awareness Initiative (CFAI). The goal of this effort was to educate lawmakers about the unique role of community foundations and to advocate for specific policy priorities related to charitable giving and donor-advised funds (DAFs).
Over the course of the visit, foundation leaders participated in more than 20 meetings with members of the House and Senate, with a particular focus on those serving on the Ways and Means and Finance Committees. These meetings helped elevate the voices of community foundations and the communities they serve.
Our messages to lawmakers were:
- Community Foundations serve dual roles as fundraisers and grantmakers. We are hearing concerns about current policy direction both from our donors and the nonprofits we support in our community. Unlike most public charities, we care both about the rules related to money coming in (charitable giving, DAFs, gifts of complex assets, IRS rollover, estate taxes), and money going out (regulations related to payout, rules affecting administrative costs, inactive funds policies). We are essentially a local community’s charitable endowment; unlike a Private Foundation, each of us maintains hundreds, if not thousands, of charitable funds donated by local donors who want to make a lasting difference in their communities. The concerns over what we are seeing are widespread, and shared by both donors and grantees.
- Donors and/or foundations should be free to give to causes they care about without concerns of reprisal or retaliation – it’s fundamentally about freedom. Our donors are hearing about how Congress may review the activities of certain types of endowments, target charities that do specific work, or attack individual donors giving to causes that aren’t politically popular. We don’t want to be partisan, and community foundations serve all types of communities – urban and rural, blue and red – but the belief that people should be able to support the causes they want to with their own money crosses party lines.
- Don’t regulate donor-advised funds (DAFs) without coming to us first. Virtually all community foundations use DAFs to some extent as a tool for building local philanthropy. The extent to which community foundations use DAFs varies, but they are an important tool for our field. They are the entry point for many donors and how we begin long-lasting relationships. However, we are much different from large commercial sponsors of DAFs, and we want to ensure policymakers understand those differences. (“We are DAF sponsors, but we care about far more than DAFs.”)
- Fix the IRA charitable rollover (Qualified Charitable Distributions) for DAFs. Fixing the IRA charitable rollover to allow gifts to DAFs is a huge priority for community foundations because it will help us serve donors better and allow donors to get money to smaller charities, whereas today most donors pick one charity for their entire gift. This fix is even more important now that fewer older donors are itemizing deductions. It’s a huge priority for us to fix in the tax bill and every community foundation in communities around the country will be supportive. There may be bipartisan legislation soon to fix this and we are looking for cosponsors.
CICF is proud to contribute to this national conversation and advocate for policies that strengthen local philanthropy and empower donors and communities.
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