Elise Westhoff Responds to the Arnold-Madoff Proposal

Elise Westhoff Responds to the Arnold-Madoff Proposal

Elise Westhoff Responds to the Arnold-Madoff Proposal

Dec 01, 2020
The Philanthropy Roundtable

On Dec. 1, billionaire John Arnold and professor Ray Madoff released a plan to control the philanthropic sector referred to as the Initiative to Speed up Charitable Giving. The Philanthropy Roundtable opposed the outlines of this plan, which might impose pointless laws on personal foundations and donor-advised funds, when it was first floated a few months in the past. 

On Tuesday afternoon, the Roundtable launched a full assertion on the lately launched initiative:

The Philanthropy Roundtable’s President and CEO Elise Westhoff Responds to New Proposal to Regulate Non-public Foundations and Donor-Suggested Funds

WASHINGTON — At the moment, a coalition of foundations led by billionaire philanthropist John Arnold and Boston School Legislation College’s Ray Madoff launched new policy proposals asking Congress to impose particular and pointless laws on personal foundations, particularly singling out household foundations. The proposal additionally requires additional regulation of donor-advised funds (DAFs), particular person charitable accounts that develop over time and permit Individuals to simply put aside funds for charitable giving, which have been essential to supporting covid-19 reduction efforts.

At a time when people are voluntarily growing their giving to unravel our nation’s most urgent challenges via charitable donations, the Arnold-Madoff proposal would undermine lots of the benefits of DAFs—America’s fastest-growing charitable-giving automobiles—together with sturdy protections for donors, recipients, and DAFs themselves. 

Elise Westhoff, president and CEO of The Philanthropy Roundtable, issued the next assertion in response:

“The Arnold-Madoff proposal is an answer looking for an issue, calling for pointless laws to personal foundations and donor-advised funds. The proposal means that the work and expense of members of the family concerned within the time-consuming and essential work of their household foundations mustn’t rely as legit working bills with regards to payout,” mentioned Westhoff. “And its proposed laws for donor-advised funds would stifle charitable giving when it’s most wanted. Giving via donor-advised funds tripled between 2007 and 2018. And Constancy Charitable, a DAF-sponsoring group, studies {that a} survey of its account holders signifies 79 % plan to keep up or improve their giving in 2020. Moderately than accelerating giving, the Arnold-Madoff proposal would make it tougher for smaller donors to assist these in want and would lower general giving within the long-run.”

The Philanthropy Roundtable has serious concerns about two main tenets of the Arnold-Madoff proposal:

  • Penalizing personal foundations, particularly beneficiant household foundations: The proposal targets personal foundations by forbidding them to rely giving from donor-advised funds towards their payout necessities. It additionally imposes extra mandates on how household foundations should deal with working bills, salaries, and extra. DAFs are used for quite a lot of legit causes—for instance, to guard the protection and privateness of particular person donors and their freedom to present to unpopular causes with out worry of threats, intimidation, and violence. There are already cheap and mandatory guidelines in place to manipulate these establishments in addition to civil and felony penalties in circumstances of abuse. Somebody’s final title mustn’t matter when devising charitable-giving guidelines.
  • Forcing people and organizations to extend payouts from donor-advised funds over an arbitrary time horizon: We imagine donors are able to making knowledgeable and clever decisions about how, when, and the place to present. Permitting a authorities regulator to power payouts towards a person’s long-term plan and higher judgment—or face punishment—makes it tougher for donors to help the long-term way forward for a group or trigger, which is why so many throughout the political spectrum oppose this concept. It’s not possible to foretell the following disaster, and we should shield our means to avoid wasting for unprecedented emergencies and exhausting occasions sooner or later.

 Extra Sources:

  • Joanne Florino, Adam Meyerson Distinguished Fellow in Philanthropic Excellence at The Philanthropy Roundtable

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