The article says nay because the bill would harm donor-advised funds and smaller donors.Â
"Most notably, it encourages Congress to pass legislation that would force donor-advised funds to disburse money within 15 years or lose tax deductibility." This would stifle long-term payout plans. But this rule would not apply to private foundations, which are usually significantly larger in size.Â
"Foundations would be unable to count the salaries and travel expenses of family members toward their annual 5% payout, even though such payments are made in service of the organization’s mission." The article argues that this rule would limit intergenerational wealth and affect smaller donors because most foundations have less than $50M in assets.Â
What would the bill mean for long-term, patient giving in effective altruism, especially given the popularity of donor-advised funds?
I find it hard to come up with an argument supportive of this proposal, but as one clarification: the proposal is that donors could choose to create a DAF with no time limit, but where the donor receives only capital gains tax benefits at the time of donation, and income tax benefits at the time of disbursement. Many large donors get most of their income through capital gains, so maybe aren't too bothered by this, and small donors might receive some benefit by being able to save up their donations for several years and then receive income tax benefits all at once when they disburse. (This would be helpful if they normally don't donate enough per year to get over the standard deduction but would be able to get over it after saving up donations for several years.)
My guess is that this is mostly harmful for people with low six-figure incomes who want to donate a substantial portion of their incomes and wait > 15 years.