What’s bubbling up: Need-to-know updates on the proposed donor-advised fund regulations

What’s bubbling up: Need-to-know updates on the proposed donor-advised fund regulations

The McPherson County Community Foundation (MCCF) is committed to providing timely updates on legal and policy developments to help you stay on top of best practices in charitable planning. In that spirit, donor-advised funds and the rules governing these vehicles are topics that are popping up more frequently in financial and even mainstream media. Our team is closely watching these regulatory developments.

As background, in November 2023, the Internal Revenue Service issued proposed regulations that would change the way donor-advised funds are defined and how they operate. Especially leading up to the May 6, 2024 public hearings, the proposed regulations have created quite a buzz. If you’d not yet heard about the proposed regulations, the April 19, 2024 letter to Treasury Secretary Janet Yellen, signed by 33 members of Ways and Means, might have grabbed your attention. The letter lays out concerns that “these regulations could have the unintended consequence of impeding charitable giving in our communities, particularly at MCCF.” You’ll hear from us when (and if) the proposed regulations, or some version thereof, go into effect and what to do about it.

As you track the issue, however, it’s important to remember that a donor-advised fund is just one of many types of funds you can establish at MCCF. Consider:

–Certainly the donor-advised fund is popular because it allows you to make a tax-deductible transfer of cash or marketable securities that is immediately eligible for a charitable deduction. Then, you can recommend gifts to favorite charities from the fund to meet community needs as they emerge.

–Other types of funds at the Foundation can be just as effective as a donor-advised fund depending on your objectives. In some situations, these other fund types are even more effective than a donor-advised fund to achieve a your goals.

–Field-of-interest funds and designated funds, for example, allow you to support a charitable cause or organization they love. Unrestricted funds help you support future needs in the community that can’t be predicted and can only be addressed through MCCF’s perpetual structure and mission to serve the community as a whole.

–A major advantage of field-of-interest funds, designated funds, and unrestricted funds is that they are eligible recipients of the popular and tax-savvy planning tool called the Qualified Charitable Distribution, or “QCD,” available to those who have reached age 70 ½.

We look forward to helping you serve your charitable needs regardless of where the proposed regulations ultimately land. And we’ll keep you posted!




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