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Accelerating Charitable Efforts (ACE) Act Introduced

Bridgette Mugge

Feb 15 2022

2 min read

The Accelerating Charitable Efforts (ACE) Act was introduced in both the House and the Senate. The ACE Act is a bipartisan legislation aimed to reform both donor-advised fund (DAF) and private foundation rules. The ACE Act looks to establish timelines and payout obligations for both, intended to accelerate when funds are made available to working charities.

Under the Act, donor-advised funds are given the option between a 15-year DAF and a 50-year DAF. Charitable contribution deductions available to the donor will vary between the two options. The required payout timeframe applied to the DAF will vary as well with certain exemptions for community foundations.

Private foundations will see updates to the existing payout obligations, which will no longer be met by distributions to DAFs or by salaries or travel expenses to a donor’s family member. Excise tax applicability will also be updated if private foundations meet a 7% payout obligation or when the private foundation reaches a duration of 25 years or less.

Check back for more information as this moves through the legislative process to see how this may affect your organization or charitable giving. To speak with our team, please contact us.

Source: Pingree, Reed Sponsor Bipartisan Bill to Ensure Charitable Donations Reach Working Charities, February 3, 2022

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About the Author

Bridgette Mugge

Bridgette Mugge, EA, is a tax manager within Sikich’s not-for-profit practice. In her role, she supports not-for-profit organizations in tax planning, consulting and compliance services. She has nearly 15 years of experience in public accounting.