06/16/2021

ACE Act Ensures Donor-advised Funds are Made Available in a Reasonable Time

The purpose of the act is to reform private foundations

Senators Chuck Grassley (R-IA) and Angus King (I-ME) introduced the Accelerating Charitable Efforts Act (ACE Act) last week. The press release states that the purpose of the ACE Act is to reform private foundations and ensure that philanthropic funds in donor-advised funds (DAFs) are made available to working charities within a reasonable time. 

Currently, donor-advised funds account for over $140 billion in charitable gifts.  However, under current tax law there is no requirement to distribute these funds to charities.  The proposed legislation would ensure that DAF assets are distributed within reasonable timeframes and establish rules to accelerate the distribution of these assets to working charities.  In addition, the proposed legislation modifies the rules regarding the distribution requirements for private foundations and reforms how public charities compute their public support test when a DAF contributes to a charity.  A few of the highlights of the Act are listed below. 

The ACE Act establishes a set of complex rules to create two new types of DAFs.

Please select this link to read the complete article from OSAE Member VonLehman CPA & Advisory Firm.