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DAFs and public policy

A year ago, we asked you about how nonprofits experience various types of donor-advised funds (DAFs); for example, how many donations you receive, how often you knew the donor in advance of the donation, etc.

This survey focuses on your thinking about the public policy aspects of donor-advised funds, such as potential regulations or reports that might be required.

Your responses to this survey are anonymous. At the end is a place to add your name and contact info if you wish. We will not link your contact information to your responses.

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* 1. Which of the following categories best describes where you work or are on the board?

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* 2. In which California county is your main office?

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* 3. In the last 12 months, from what types of DAF sponsors have you received donations? (check all that apply)

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* 4. In your nonprofit, about what percentage of individual donations come from donor-advised funds?

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* 5. Recently there have been many articles about donor-advised funds in places like the New York Times, Bloomberg News, Stanford Social Innovation Review, Nonprofit Times, and elsewhere. How aware are you of these recent critiques of DAFs? (choose only one)

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* 6. How aware are you about the following aspects of donor-advised funds?

  I am not aware of this aspect I am somewhat aware of this aspect I am very aware of this aspect
Donors to donor-advised funds receive an immediate tax deduction for the full amount of the donation.
Many DAF sponsors have "inactive fund policies," providing for the sponsor to make grants or to absorb the fund if, after a certain number of years, the fund holder has not made any grants.
The funds deposited become legally owned by the donor-advised fund sponsor.
Donor-advised fund sponsors manage the sale of donated assets (such as stock, real estate, cryptocurrency).
Private foundations are required to spend 5% of their assets each year -- which can include their own program-related expenses and transfers to donor-advised funds.
There are no legal requirements for funds from donor-advised funds to be paid out or granted out at any time.
Many donor-advised fund sponsors also permit donors to advise on how the funds will be invested.
A common expectation by donors is that they will instruct the donor-advised fund sponsor on which nonprofits to make grants/payouts to and in what amounts.
In most cases, non-cash donations (such as stocks, real estate) to donor-advised funds result in greater tax deductions than if the same non-cash donation were donated to a private foundation.

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* 7. A great many ideas have been floated as to appropriate public policy goals related to donor-advised funds.

Related to mandatory minimum distributions for non-endowment donor-advised funds, please indicate how much you agree or disagree with the following:

  Strongly disagree Somewhat disagree Neutral/no opinion Somewhat agree Strongly agree
There should be an annual percentage (of assets) that must be granted out / paid out from a DAF.
There should be no requirements for funds in DAFs to be granted out/paid out.
There should be a certain number of years over which all funds in a DAF must be granted out /paid out.

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* 8. If regulations focused on a certain number of years in which all funds in a DAF must be granted out/paid out, which one of the following do you most agree with?

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* 9. Please tell us why you chose your answer to Question 8:

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* 10. If there were to be a requirement that a certain percent of assets be paid out each year, which percentage do you most agree with?

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* 11. Please explain why you chose your answer to Question 10:

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* 12. In the last CalNonprofits survey about donor-advised funds, and in talking with nonprofits, we have heard many ideas for new policies related to donor-advised funds. Please indicate your level of agreement with the following ideas that have surfaced:

  Strongly disagree Somewhat disagree Neutral/no opinion Somewhat agree Strongly agree
DAF sponsors should be required to have an "inactive funds policy" but without requirements on what that policy should be.
Requiring DAF sponsors to have an "inactive funds policy" where, if a DAF fund holder has not made any payouts/grants within a certain number of years, the DAF sponsor can distribute from that account or have the account convert to part of the sponsor's endowment.
Transferring funds from private foundations to donor-advised funds should continue to "count" towards the 5% payout requirements of private foundations.
Transferring funds from private foundations to donor-advised funds should NOT be allowed to "count" towards payout requirements.
DAF sponsors should be permitted to make payouts/grants in cryptocurrency.
DAF sponsors should be required to tell the nonprofit recipient the name of the DAF account holder from which a payout/grant came.
There should be some way for a nonprofit to know something about the donor in case the nonprofit does not want to receive money from that person.
There should be better oversight of donors who use donor-advised funds to make donations that have significant benefits attached (such as sponsorship of an event, a table at a dinner, season tickets, etc.).
There should be different rules for DAF sponsors depending on size (for example, a regulation might apply only to DAF sponsors that have $300 million or more in donor-advised funds).
There should be different rules for DAF sponsors that are affiliated with commercial investment firms than for community foundations.
DAF sponsors should be required to report each year for each fund: how much came into the fund, how much went out, where outgoing funds went, and how much was paid in management fees.
DAF sponsors should NOT be required to report any information about individual funds.

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* 13. Do you have additional comments about public policy relating to donor-advised funds?

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* 14. Do you have any messages for the CalNonprofits board and staff related to public policy and donor-advised funds?

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* 15. Would you like to receive updates on public policy that affects nonprofits, compliance information, and other news and events from CalNonprofits?

Thank you for taking the time to share your thinking with us.
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