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Black Tie International:
Charity Stimulus
 
 
http://charitystimulus.org/
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Philanthropists, Foundation Leaders

Call on Congress
 to Inject $200B from Their Endowments into Economy

 

A 3-Year Emergency Charity Stimulus would Boost Flows to Charities
by $200 Billion
 

A Stimulus that is
 “Already Paid For” by Tax Deductions Benefiting Donors


A group of more than 275 foundation trustees, donors and philanthropic leaders today released a letter urging Congress to mandate an emergency charity stimulus increase in the pay-out percentage required of foundations by law.

 

 The letter comes amid public calls for the philanthropic sector to do more in response to the COVID-19 pandemic.


 

Private foundations hold $1.2 trillion and donor-advised charity funds

 (DAFs) hold another $120 billion with minimal payout requirements.

 

Foundations are mandated to pay out a minimum of 5 percent of funds on an annual basis no matter what the invested endowment accrues in returns.
 

 Donor-advised funds have no mandated payout.

 DAF donors receive tax deductions at the moment the funds are created, but the funds can then sit for years or even decades before being transferred to active charities.

 

 In practice, this means that wealth and endowments meant for the public good often grow in size rather than being put to use.


 

Signatories are calling

 on Congressional leaders to introduce an 

Emergency Charity Stimulus
 

by enacting the following measures:

1)
 Mandating a temporary doubling of private foundation payout from
5 percent to 10 percent for three years,

and 2)

Establishing 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.

 These funds would support vital social services at no cost to taxpayers.


 

“Only Congress has the power to compel a massive injection of wealthy people’s

 money into jobs and nonprofit charitable organizations working in areas vital for our
 recovery,” 
 

said Scott Wallace, co-chair of the Wallace Global Fund, a private foundation that

 recently committed to spend 20% of its own endowment in 2020.

“The wealthy donors who created these foundations and DAFs have already reaped

 vast taxpayer subsidies for their future generosity. But in this moment of crisis,

 it’s time we sped that generosity and paid more right now.


 

“It is past time to surrender to the truth that there is no legacy for any of us if we don't align our resources now toward a more sustainable and compassionate future,”

said Aileen Getty, founder and president of the Aileen Getty Foundation and granddaughter of billionaire J. Paul Getty.

 

 “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.”

 

“While some foundations and donors are stepping up at this moment, others continue to treat the 5 percent payout as a ceiling not a floor,”

 said Chuck Collins, director of the Charity Reform Initiative at the Institute for Policy Studies.

 

“The independent nonprofit sector is part of the front-line response to the pandemic, with everything from food banks, mental and physical health services, culture and educational institutions. The sector employs 12 million workers, over 10 percent of the private workforce.”


 

"This is not a time for the philanthropic community to pull back,”

said Stephen Prince,  Vice-Chair of the Patriotic Millionaires and a businessman who founded Card Marketing Services.

 “We don’t want charitable giving to drop off a cliff in 2021 and 2022.


 Our tax code has provided wealthy people with these huge loopholes over the past 45 years. In these troubling times, we need to rise to the occasion and double down on our giving back."


 

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).



To-date, 275 philanthropic leaders have signed the letter.


 

The full letter and the initial list of signers may be found 
here (http://charitystimulus.org/).

 

The letter states in part,

“Increased funding could be immediately absorbed by food banks, health care providers, educational institutions, and organizations addressing issues like poverty alleviation, economic development, safe and secure voting, and social justice.

 Otherwise, foundations which are losing assets on Wall Street will cut their grant-making correspondingly – as they did in the years after the 2009 recession – forcing many nonprofit organizations they fund to reduce budgets, lay off staff, and cut back on their charitable work.”


 

The letter also says,

“Private foundations are currently mandated by federal law to spend five percent of their assets each year in grants and overhead, and DAFs are not required to spend a dime.

 While some foundations pay out more, the vast majority of American foundations treat the five percent floor as a ceiling on their giving, in part to ensure that the institutions will live in perpetuity.

Wealthy donors take an immediate, taxpayer-subsidized deduction when giving money to these entities, regardless of when the money is distributed.

And in this time of unprecedented crisis, the money is not reaching charities fast enough.”

 

The letter was organized by the Charity Reform Initiative of the Institute for Policy Studies, Patriotic Millionaires, and the Wallace Global Fund. 


 

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.


 

 

 
 

WE SUPPORT AN EMERGENCY CHARITY STIMULUS BILL TO MANDATE INCREASED PAYOUTS FOR PRIVATE FOUNDATIONS AND DONOR-ADVISED FUNDS

 

Dear Speaker Pelosi, Chairman Neal, Ranking Member Brady, Minority Leader Schumer, Chairman Grassley, and Ranking Member Wyden, 

We are writing as philanthropic donors and leaders to urge you to consider including “emergency charitable stimulus” legislation in the next coronavirus relief package by doubling the mandated annual foundation payout over the next three years, from five percent to ten percent, and to mandate the same ten percent payout requirement for Donor Advised Funds (DAFs). This simple change will allow Congress to inject more than $200 billion into the economy over the next three years, according to estimates by the Institute for Policy Studies – all without spending a dollar of
taxpayer money.  

As you know, private foundations are currently mandated by federal law to spend five percent of their assets each year in grants and overhead, and DAFs are not required to spend a dime. While some foundations pay out more, the vast majority of American foundations treat the five percent floor as a ceiling on their giving, in part to ensure that the institutions will live in perpetuity. Wealthy donors take an immediate, taxpayer-subsidized deduction when giving money to these entities, regardless of when the money is distributed. And in this time of unprecedented crisis, the money is not reaching charities fast enough. 

The independent nonprofit sector employs over 12 million people, ten percent of the private sector workforce. Increased funding could be immediately absorbed by food banks, health care providers, educational institutions, and organizations addressing issues like poverty alleviation, economic development, safe and secure voting, and social justice. Otherwise, foundations which are losing assets on Wall Street will cut their grant-making correspondingly – as they did in the years after the 2009 recession – forcing many nonprofit organizations they fund to reduce budgets, lay off staff, and cut back on their charitable work. This will cause additional problems for an economy which is already in trouble.

In the midst of global pandemic and economic shutdown, there is no justification for allowing the country’s wealthiest dynasties to continue to hoard tax-advantaged funds that have already been designated as charitable contributions in anticipation of some future need, when there are so many urgent needs now. While this change is a deviation from the status quo, it is a modest one. Congress’s purpose in incentivizing these foundations and funds with tax deductions in the first place was to support charitable efforts. There has clearly not been a moment in the past fifty years in which the full deployment of our charitable sector was more necessary. 

America is in an unprecedented crisis. The world of philanthropy must step up and do more, faster. Congress must insist on it.

Thank you for your consideration.

SCOTT WALLACE
Wallace Global Fund (PA)

CATHERINE GUND
George Gund Foundation (NY)

ANNA FINK
Amalgamated Charitable Fund (NY)

REGAN PRITZKER
(CA)

JULIE SCHECHTER
Shift Fund (MA)

ELLEN FRIEDMAN
Compton Fund (CA)

JUSTIN MAXSON
Mary Reynolds Babcock (NC)

MICHAEL PINE
Chicago Community Trust (IL)

TRACY HEWAT
Hewat Fund (RI)

DEB NELSON
RSF Social Finance (CA)

KATHRYN GILJ
Ceres Trust (IL)

SE-AH-DOM EDMO
MRG Foundation (OR)

GUN DENHART
(OR)

MIKE LAPHAM
DBL Foundation (MA)

CHUNG-WHA HONG
Grassroots International (MA)

ERIC SCHOENBERG
(NJ)

TERRY WINOGRAD
(CA)

SOPHIE ROBINSON
(NH)

MARNIE THOMPSON
(NC)

ELLEN DORSEY
Wallace Global Fund (DC)

FRANK PATITUCCI
(CA)

BENNO FRIEDMAN
Cloud Mt. Foundation (MA)

ZEPH FISHLYN
(OR)

ASHLEIGH GARDERE
Mary Reynolds Babcock Foundation (LA)

LAUREN CAMPBELL
(DC)

ELISE SALTZBERG
(MD)

ABIGAIL DISNEY
(NY)

MARY MOUNTCASTLE
Mary Reynolds Babcock Foundation (NC)

KEITH MESTRICH
Amalgamated Charitable Fund (NY)

JENNIFER RISCHER
(CA)

SARA MILLER
Miranda Family Fund (NY)

LARRY OTTINGER
Ottinger Foundation (MD)

JERRY HIRSCH
Lodestar Foundation (AZ)

SURINA KHAN
Women’s Foundation of California (CA)

MORRIS PEARL
(NY)

LEO FARBMAN
Kolibri Foundation (WA)

BILL CLAPP
(WA)

CHRISTIAN ETTINGER
Education Foundation of America (CA)

NAN ORROCK
Sapelo Foundation (GA)

TRACY GARY
Kismet Fund (CA)

ELLEN FARBMAN
Kolibri Foundation (NY)

ALIDA LATHAM
(WA)

HARLEY BROWN
(NY)

STEPHAN SEGAL
Segal Family Foundation (PA)

JONATHAN GOLDMAN
Spyder Fund (MA)

SONJA SWIFT
Swift Foundation (CA)

LOREN HARRIS
(CA)

DANIEL LEWIS
(CA)

CAROLYN VAN NELSON
(MN)

ROBIN BRADFORD
(TX)

KATHERINE ANDERSON
(NJ)

CAITLIN BRUNE
(CA)

MARSHA DAVIS
Tzedek Social Justice Fund (NC)

 

NING MOSBERGER-TANG
(CO)

ALAN DAVIS
Leonard and Sophie Davis Fund (CA)

SUSAN PRITZKER
(CA)

AILEEN GETTY
Aileen Getty Foundation (CA)

JASON FRANKLIN
Ktisis Fund (MI)

DRUMMOND PIKE
Tides Foundation (CA)

Dr. LM Alaiyo Foster
Black United Fund (OR)

VINI BHANSALI
Solidaire Network (CA)

STEPHEN PRINCE
(TN)

PETER STERN
(CA)

JAMES DUPONT
(CA)

VIRGIL SMITH
Z Smith Reynolds (GA)

SPENCER SHERMAN
Impact Assets (CA)

VU LE
(WA)

STEVEN FARBMAN
(NY)

MICAEL GAST
(WA)

NAOMI SOBEL
(MA)

Elaine Lissner
Parsemus Foundation (CA)

MATTHEW WILHELM
(NH)

ELSPETH GILMORE
(NY)

CATHERINE LERZA
(CA)

ALAN PRESTON
Arch Community Fund (MA)

JACINTA FITZGERALD
(WA)

JILL BUNGE
United Way Toledo (OH)

JORDAN GOLDWARG
(WA)

JENNIFER FITZGERALD
Mary Reynolds Babcock Foundation (MA)

 

 
 

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