What’s bubbling up: Need-to-know updates on the proposed donor advised fund regulations

Stark Community Foundation is committed to providing timely updates on legal and policy developments to help you and other professionals who advise philanthropic clients stay on top of best practices in charitable planning. In that spirit, Donor Advised Funds and the rules governing these giving vehicles are topics that are popping up more frequently in financial and even mainstream media. Our team is closely watching these regulatory developments. 

As background, in November 2023, the Internal Revenue Service (IRS) issued proposed regulations that would change the way Donor Advised Funds are defined and how they operate. If you’ve not yet heard about the proposed regulations, the April 19, 2024 letter to Treasury Secretary Janet Yellen, signed by 33 members of Ways and Means, might have grabbed your attention. The letter lays out concerns that “these regulations could have the unintended consequence of impeding charitable giving in our communities, particularly at our local community foundations.” The IRS held a public hearing on the proposed regulations on May 6-7, 2024 featuring more than 30 in-person speakers, including a number of speakers from community foundations. You’ll hear from us when (and if) the proposed regulations, or some version thereof, go into effect and what to do about it.

As you track the issue, however, remember that a Donor Advised Fund is just one of many types of funds your clients can establish at Stark Community Foundation. Consider: 

• Field of Interest Funds and Designated Funds, for example, allow your client to support a charitable cause or organization they love. Our unrestricted Community Charitable Funds help your clients support future needs in the community that can’t be predicted and can only be addressed through Stark Community Foundation’s perpetual structure and mission to serve the community as a whole. 
• Field of Interest Funds, Designated Funds and Community Charitable Funds are eligible recipients of the popular and tax-savvy planning tool called the Qualified Charitable Distribution, or “QCD,” available to your clients who have reached age 70 ½.

We look forward to helping you serve your charitable clients regardless of where the proposed regulations land. We’ll keep you posted!

 *This blog post is provided for informational purposes only, and is not intended as legal, accounting or financial planning advice.