At the 2024 DAF Giving Summit, four leading Donor Advised Fund CEOs shared their insights on the biggest legislative threats to philanthropy that could come in next year’s congressional tax code deliberations
One of the highlights of the 2024 DAF Giving Summit in Nashville was the opening keynote that featured a panel of leading DAF CEOs, moderated by Sandra Swirski, Founder of Integer, a full-service advocacy firm that specializes in nonprofit policy. The panel included:
Ron Ransom, CEO of American Endowment Foundation (AEF)
Rachel Schnoll, CEO of Jewish Communal Fund (JCF)
Holly Welch Stubbing, CEO of National Philanthropic Trust (NPT)
Debbie Wilkerson, President & CEO of Greater Kansas City Community Foundation (GKCCF)
Sandra started the conversation with an excellent recap of the situation in Washington. The 2017 Tax Cuts and Jobs Act is due to expire at the end of 2025. If that tax cut package expires in full, it’s estimated that individuals and companies could face an estimated $5 trillion in incremental taxes. Regardless of which party is in power next year, no one will want to be responsible for the largest tax hike in history. That means that 2025 will be filled with heated discussion and deliberation in congress about what elements to keep or replace.
Given the heightened scrutiny of philanthropy and the rapid rise of Donor Advised Funds, it’s nearly guaranteed that some proposed changes to the charitable giving tax scheme will be a part of the conversation. Any provisions that complicate or reduce the tax benefits for philanthropy are the top concern for the speakers on this panel. They know that everyone in congress will be looking for new sources of revenue in the negotiations and it’s crucial for the philanthropy sector to get ahead of the risks by proactively engaging with lawmakers.
As Sandra so eloquently reminded everyone, “In Washington, if you’re not at the table, you’re likely to be on the menu.” Here are some of the group’s top suggestions on the best ways for nonprofits to get engaged with Advocacy for the sector.
“In Washington, if you’re not at the table, you’re likely to be on the menu.”
DAFs & Nonprofits Can Be More Aligned with their Messaging
The most important thing is that legislators have a consistent and clear message in mind about philanthropy during these upcoming deliberations. They should be hearing from everyone about how crucial it is to keep philanthropic dollars flowing to nonprofits. As Rachel Schnoll from JCF said, “Keeping philanthropy streamlined & easy for Americans is our top priority.”
Largely unfounded criticism of the sector has been on the rise, making it an easier target for new provisions that could be detrimental. As Ron Ransom from AEF pointed out, “Despite all the evidence on how DAFs expand people’s philanthropy, we as an industry are under attack. When we’re under attack, we need to come together.” This evidence includes payout rates north of 20% for 15 years, ever since National Philanthropic Trust started tracking.
“Despite all the evidence on how DAFs expand people’s philanthropy, we as an industry are under attack. When we’re under attack, we need to come together.”
Several of the panelists addressed criticism that they’ve heard from nonprofits, and encouraged folks to shift the language they use to be more constructive and accurate. DAFs don’t “lock up” money for charity; they help commit more money to philanthropy. Once assets are put in a DAF, they can’t be used for any other purpose. The alternative to a DAF contribution is not a direct nonprofit donation; it’s more likely that the assets would stay in the donor’s general portfolio.
While general individual giving is flat to declining, DAFs are a large and fast-growing source of growth for nonprofits (as demonstrated in the 2024 DAF Fundraising Report). In order to ensure this critical revenue channel keeps growing for nonprofits, DAFs and nonprofits need to remain arm-in-arm in advocacy efforts.
Figure from the 2024 DAF Fundraising Report
Nonprofits Ensuring their Voices are Heard
Other industries have been active with advocacy efforts on the hill for a very long time. Holly Welch Stubbing from NPT described the maturation challenge that the nonprofit sector faces and how much more often legislators are hearing from other industry advocates. The sector also has significantly fewer resources to invest in advocacy, which means “we always have to punch above our weight,” according to Holly.
This also means that broad-based involvement across the sector and consistent messaging is even more critical.
Ability for Nonprofits to Make an Impact with Legislators
Advocacy and lobbying efforts can seem extremely intimidating and out of reach for many nonprofits. In addition to emphasizing the importance of nonprofits getting involved in the conversation, the group also laid out specific ways to take action.
Don’t go at it alone
There are many nonprofit groups that engage with legislators in Washington on behalf of groups of nonprofit organizations. Look into opportunities with local and national associations that represent organizations - like the Association of Fundraising Professionals, Council on Foundations, The Nonprofit Alliance, etc. You can leverage their resources, join in their activations and seek advice on deeper engagement.
Reach out to your local representation
Especially during election cycles, when folks are spending significant time in their home districts campaigning, it’s a great time to reach out to elected officials. You can take those opportunities to highlight great work being done in their own community by nonprofits and the importance of national legislation that is supportive of nonprofits on the local level.
Harness the power of story
While specific data points and research are definitely helpful, nothing is more powerful for a busy legislator than a compelling story of impact. They are inundated with inbounds and requests, but vivid narratives of how DAF giving leads to measurable impact in their own communities are bound to stick with them. As Sandra said, “nonprofits sharing the importance and difference DAFs make to lawmakers, those stories really make a difference.”
Don’t underestimate the power of your voice
Advocacy is going to be new to a lot of nonprofit leaders, but that doesn’t mean they don’t belong in these conversations. As Debbie Wilkerson from GKCCF advised, “Nonprofits need to stay vigilant and stay aware. You have a voice and just need to find your way to plug in.”
“Nonprofits need to stay vigilant and stay aware. You have a voice and just need to find your way to plug in.”
Opportunities for the Sector to be Proactive in Washington
While much of the conversation covered the ways that the sector can protect itself against threats, there is also an opportunity to be proactive and propose changes that would be productive. The conversation included many interesting suggestions where philanthropy leaders can lean in on changes they would like to see that can improve processes and increase giving.
Given that the nonprofit sector will be part of the tax conversation, it is essential for the sector to put forth the first proposals, ones that are actually clarifying and helpful. There are many things in the existing regulations that are confusing and limiting as written, and providing clearer explanations would improve things for regulators, donors and nonprofits. Debbie shared, “Clarity on how you can use DAFs for events and the tax deductible portion would be incredibly helpful, for example. Aligning with other tax rules makes a ton of sense.”
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