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Monitoring the Ongoing DAF Regulations

Jun 11, 2024 | Professional Advisors

Monitoring the Ongoing DAF Regulations

We are committed to helping you serve your charitable clients regardless of where the proposed donor-advised fund regulations ultimately land.

DAFs are popular because they allow your client to make a tax-deductible transfer of cash, marketable securities or another asset class that is immediately eligible for a charitable deduction. Then, the client can recommend gifts to favorite charities from the fund to meet community needs as they emerge.

Reminder: As we track potential changes to DAFs, don’t forget there are other advantageous funds your clients can establish at the Community Foundation, which are not classified as DAFs.

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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 our local community foundations.”

You’ll hear from us when (and if) the proposed regulations, or some version thereof, go into effect and what to do about it.

A major advantage of field-of-interest funds, designated funds, scholarships 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 your clients who have reached age 70 ½.

 

  • Scholarship Funds – Did you know OCCF is the largest independent scholarship provider in the state of Oklahoma? We have several donors funding their scholarships through QCDs now and increasing the scholarship’s impact with a testamentary IRA gift later.
  • Field-of-Interest Funds – Did you know OCCF has funds that provide grant support for the following cause areas? Many of our donors love that they can provide support for their favorite cause areas and appreciate the accountability for the funded projects.

           *Health Care Access *Children *Beautification *Animal Welfare *Services for Older Adults *Education

  • Designated Funds allow your client to provide support for specific organizations they love.

The team at the Community Foundation is a resource and sounding board as you serve your philanthropic clients. We understand the charitable side of the equation and are happy to serve as a secondary source as you manage the primary relationship with your clients. This newsletter is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.