A coalition of nonprofit groups is calling on the U.S. Senate to include a temporary emergency stimulus in its next pandemic relief package. The proposal would unlock $200 billion in charitable funds to assist charities overwhelmed by the pandemic, with updates to the laws governing private foundations and donor-advised funds (DAFs). The proposal would release more of the estimated $1.2 trillion they currently hold by increasing required distributions to 10 percent annually for three years.
“Nonprofits need emergency help right now. Millions of nonprofit jobs have been lost, one-third of them in health care. Up to 120,000 nonprofits are shutting down completely,” said Scott Wallace, co-chair of the Wallace Global Fund, a private foundation that committed to spend 20 percent of its own endowment in 2020. “We urge Congress to enact an Emergency Charity Stimulus to force philanthropies to increase their support for nonprofit organizations – immediately, urgently, and temporarily, to allow time for deployment of a vaccine and economic recovery.”
“We are collectively facing the most dire moment that many of us have seen in our lifetimes, and it is likely the tip of the iceberg in terms of the challenges that await us as a society and a planet,” said Aileen Getty, founder and president of the Aileen Getty Foundation and granddaughter of billionaire J. Paul Getty.
“While some foundations and donors are stepping up at this moment, others continue to treat the five percent payout as a ceiling not a floor,” said Chuck Collins, director of the Charity Reform Initiative at the Institute for Policy Studies. ““Donors have already taken the tax break for these contributions. Congress needs to raise the bar for those donors who haven’t figured out this is no time to sit on your treasure.”
Led by the Charity Reform Initiative of the Institute for Policy Studies, Patriotic Millionaires, and the Wallace Global Fund, the groups first proposed the idea in May with a letter to Congress. The letter has now been signed by almost 800 philanthropists and leaders of foundations as well as several thousand nonprofit leaders and staff.
The proposal calls for a temporary doubling of private foundation payout from 5 percent to 10 percent for three years and would establish a similar 10 percent payout for donor-advised funds (DAFs) that currently have no mandate.
Researchers at the Institute for Policy Studies estimate these policies would unleash an estimated $200 billion in additional charity funds over three years, with no additional cost to taxpayers. The independent nonprofit sector is part of the front-line response to the pandemic and other natural disasters. The sector employs 12 million workers or more than 10 percent of the private workforce.
Prominent signers of the letter include: Scott Wallace, Wallace Global Fund (PA); Abigail Disney (NY); Aileen Getty, Aileen Getty Foundation (CA), Sara Miller, Miranda Family Fund (NY), Rory Kennedy (CA), Ning Mosberger-Tang (CO); Catherine Gund, George Gund Foundation (NY); Mary Mountcastle, Mary Reynolds Babcock Foundation (NC); Anna Fink, Amalgamated Charitable; Ellen Friedman, Compton Fund (CA); Jerry Hirsch, Lodestar Foundation (AZ); Morris Pearl (NY); and Stephen Prince (TN).
About the Charity Reform Initiative
The Charity Reform Initiative of the Institute for Policy Studies aims to modernize the rules governing philanthropy to increase the flow of resources to the nonprofit independent sector and protect the integrity of the tax system.
About the Patriotic Millionaires
The Patriotic Millionaires are high-net worth Americans, business leaders, and investors who are united in their concern about the destabilizing concentration of wealth and power in America. The mission of The Patriotic Millionaires organization is to build a more stable, prosperous, and inclusive nation by promoting public policies based on the “first principles” of equal political representation, a guaranteed living wage for all working citizens, and a fair tax system.
About the Wallace Global Fund
The mission of the Wallace Global Fund is to support people-powered movements to advance democracy and rights and to fight for a healthy planet.