September, 02 2020, 12:00am EDT

Coalition Calls on Senate to Unlock Charity Funds for Pandemic Relief
As Stock Market Rises and Charities Go Broke, the Senate Sits; the Time for a Charity Stimulus is Now
WASHINGTON
A coalition of nonprofit groups is calling on the Senate to enact a temporary emergency stimulus to unlock $200 billion in charitable funds to assist charities overwhelmed by the pandemic. They are asking the Senate to update the laws governing private foundations and donor-advised funds (DAFs) to require that they release more of the estimated $1.2 trillion they currently hold. The proposal would increase the required distributions to 10 percent annually for three years.
"I've been appalled for years by how many foundations treat the five percent federal floor as a ceiling and refuse to spend a penny more than they are required to," said Scott Wallace, co-chair of the Wallace Global Fund, which committed to give away 20% of its $120 million endowment this year. "The wealthy donors who created these foundations and donor-advised funds have already reaped vast taxpayer subsidies for their future generosity. In this moment of crisis, only Congress has the power to compel a massive injection of wealthy people's money into jobs and nonprofit charitable organizations vital for our recovery. It's time we sped up that generosity by making foundations pay more right now."
"One of the beauties of philanthropy is that different foundations invest in widely different nonprofits. By increasing foundation payout, philanthropies will be making more grants across a wide array of causes. We'll be keeping nonprofit workers employed, and we'll also be increasing funding across diverse areas like arts and culture, social justice, and direct services," said Mary Mountcastle, trustee, Mary Reynolds Babcock Foundation.
"While charities and the people they serve are suffering, billionaires are accumulating unprecedented amounts of wealth," said Chuck Collins, director of the Charity Reform Initiative at the Institute for Policy Studies. "Jeff Bezos just became the first person to surpass $200 billion in net worth. As Amazon and others continue to make money off the pandemic, Congress could mandate a payout of an additional $200 billion over three years from foundations to support recovery - without one cent of taxpayer funds."
Led by the Charity Reform Initiative of the Institute for Policy Studies, Patriotic Millionaires, and the Wallace Global Fund, the groups first proposed the idea in May with a letter to Congress. The letter has now been signed by 550 philanthropists and leaders of foundations and several thousand nonprofit leaders and staff.
The proposal contains 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. The independent nonprofit sector is part of the front-line response to the pandemic and other natural disasters such as forest fires and hurricanes. The sector employs 12 million workers or more than 10 percent of the private workforce. A recent report predicts that as many as 38 percent of non-profit organizations may close as a result of the pandemic.
Prominent signers of the letter include: Scott Wallace, Wallace Global Fund (PA); Abigail Disney (NY); Aileen Getty, Aileen Getty Foundation (CA), Lisa Cowan, Robert Sterling Clark Foundation (NY); Surina Khan, Women's Foundation of California; Regan and Susan Pritzker (CA); Ning Mosberger-Tang, Innovo Foundation (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); Edgar Villanueva, Decolonizing Wealth (NY); Farhad Ebrahimi, President, The Chorus Foundation; Sara Miller, Miranda Family Fund (NY), Rory Kennedy (CA); Merle Chambers (CO); Morris Pearl (NY); and Stephen Prince (TN).
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."
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."
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 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.
The Patriotic Millionaires is a group of high-net worth Americans who share a profound concern about the destabilizing level of inequality in America. Our work centers on the two things that matter most in a capitalist democracy: power and money. Our goal is to ensure that the country's political economy is structured to meet the needs of regular Americans, rather than just millionaires. We focus on three "first" principles: a highly progressive tax system, a livable minimum wage, and equal political representation for all citizens.
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— Senator Ed Markey (@markey.senate.gov) July 1, 2025 at 1:22 PM
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