New Data: Americans Want Quicker DAF, Foundation Payouts

Majority of conservatives and liberals agree that DAFS should distribute money within 5 years

Pundits left and right continue to lament how politically divided Americans are, but sizable and growing majorities across the political spectrum appear to be unified in support of a payout requirement for donor-advised funds (DAFs) and would like to see increased foundation payout requirements.

The data is included in a new report, Americans’ Understanding and Opinions About Charitable Foundations and Donor-Advised Funds. The report was jointly commissioned by Inequality.org (a project of the Institute for Policy Studies) and The Giving Review (a project of the Center for Strategic Giving at the Capital Research Center). Both organizations are Washington, D.C. think tanks with progressive and conservative policy orientations respectively reflecting opposite sides of the political spectrum. The authors acknowledge as much, calling themselves “an odd couple for collaboration.”

It appears they’ve found common ground among the 79% of Americans across the political spectrum who would support requiring DAFs to distribute all monies within five years and 54% who would support mandating it in as little as two years. The percentages are an increase from the 72% and 50% who gave the same respective answers in a similar study done in 2022.

The responses collectively suggest that congressionally floated proposals to mandate a 15-year DAF payout requirement wouldn’t go far enough. “These facts may be the most telling. Not only are Americans supportive of a higher payout, but they support a relatively short timeline for grantmaking,” the authors wrote.

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Regarding foundations, 71% of respondents believe Congress should raise the annual payout requirement from 5% to 10%. The political right is slightly more circumspect about favoring such proposals than the political left. However, strong support can still be found among solid majorities of liberals, moderates, and conservatives, as well as across differences of income, race, age, and gender.

“Ask whether human activity is the main cause of global warming, and 88% on the left will say yes but only 37% on the right. Ask if the government should ensure that everyone has healthcare and 85% on the left will agree but just 30% on the right. … That’s polarization,” the authors wrote. “But ask whether taxpayers should subsidize billionaires and the wealthy in creating foundations that will exist in perpetuity, and 77% on the right agree with 87% on the left that they should not. Ask how quickly donors should have to move money out of donor-advised accounts to working charities, and 74% of conservatives agree with the 88% of liberals who believe it should be within five years or less.”

Three out of four (75%) respondents also said there should be a cap on the amount of giving that ultra-wealthy donors can claim to reduce their taxes. However, respondents were ambivalent when asked about anonymous giving with 58% initially saying they didn’t have a problem with it but 83% then saying they would support a disclosure requirement for large gifts when the possibility of influence over nonprofits was added to the question.

The results were obtained from a survey last month of 1,005 adults with samplings weighted to match U.S. census data, according to the authors. More than half (58%) of the respondents acknowledged that many working charities are struggling, which suggests they recognize the importance of work done by nonprofits generally but are skeptical of high net-worth giving or what some critics have derisively referred to as Big Philanthropy. The findings echo recent polling by Independent Sector and others showing high levels of skepticism of philanthropy with much of the distrust driven by growing skepticism of giving by wealthy individuals.

The report was jointly authored by Chuck Collins, a senior scholar at the Institute for Policy Studies and director of its Program on Inequality and the Public Good, and by Michael Hartmann, a senior fellow at the Capital Research Center and director of its Center for Strategic Giving. The authors conclude from their results that “the time is right to consider changing the current system, and that policymakers who explore reform will have strong public support behind them.”

This article was originally published by The NonProfit Times.

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