A bipartisan tax proposal meant to speed up donations from foundations and donor-advised funds has reached the United States House of Representatives. The proposed payout bill was introduced by Rep. Chellie Pingree (D-ME) and Rep. Tom Reed (R-NY) and follows a similar bill brought to the Senate last year. Both bills are meant to update tax laws and regulations to make sure donations are received quickly by charities.
The legislation would allow donors to receive an upfront tax deduction for donor-advised funds only if they distribute the money within 15 years. As stated by Pingree’s office, “Loopholes in our current laws allow the ultrawealthy to make contributions and receive immediate tax benefits without any distribution requirements. The result is that money promised to charity can sit unused for years.” During a time period where all charitable giving can be used immediately, supporters of the bill say that donations are more about tax benefits than about giving to people in need. Opponents of the bill say that it may hurt charitable giving.
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