Charity Groups Balk at IRS Proposal for Donor-Advised Funds

An IRS proposal broadening who is considered a “donor-adviser” could stifle charitable giving through what’s become a popular philanthropy tool, industry groups and tax pros say.

Donor-advised funds, or DAFs, allow people to receive an immediate tax exemption for their gift and leave the money or assets in the fund indefinitely before detailing which charities would get their money. Major investment management firms such as Fidelity Investments and community foundations often sponsor these funds.

But as the comment period on the November 2023 proposed regulations ends, tax practitioners and charity industry groups worry philanthropies will lose out.

The proposals alter ...