Over the last year and a half, every month it’s felt like there’s been a new effort to force, or at least encourage, philanthropists to open their wallets a bit wider and give away what’s inside sooner.
The reasons are simple enough: a global pandemic, a climate emergency that has become even more painfully present, and a long-overdue reckoning on systemic racism and anti-Blackness. And the motivations certainly do not stop there.
Nor, of course, is this a new phenomenon. Activists and progressive philanthropic groups have long made (largely unheeded) calls for philanthropy to give more. But the way these campaigns have proliferated in the COVID era has been remarkable. And there is movement toward potentially lasting change: One effort is now a Senate proposal with bipartisan sponsors—but also with plenty of opponents.
To help anyone who has lost track of these efforts, I’ve compiled a list of the campaigns and proposals that have emerged since early 2020. It is an overlapping set of initiatives involving many of the same players, with signatories for one pledge serving as organizers of another. In that way, it is hard to evaluate whether all of this simply amounts to a lot of noise or if it’s a burgeoning constituency for change.
At worst, these efforts could be seen as self-congratulatory, a form of virtue signaling for foundations that have long since decided to give money away at higher rates. At best, by exerting pressure on philanthropic peers to consider their own practices, these campaigns will rally others to give more. Legislative efforts face notable barriers—it is famously hard to build political will against people who give away money for a living. But perhaps the sheer volume of these efforts signals that there is an appetite for bigger shifts.
One more thing: It is hard to review these campaigns without noticing some commonalities among the organizers. Most are white and many are male. There are, of course, a wide range of philanthropic reform efforts led by women and people of color. The Climate Justice Funders Pledge, which asks top climate funders to give at least 30% of funding to BIPOC-led groups, and the recent letter organized by Groundswell Fund and the Solutions Project, are but two recent examples. The difference, put simply, is that such efforts tend to focus not just on how much is given out and how fast, but also to whom, and on how the decisions are made. The campaigns listed below, by contrast, are almost entirely focused on the overall amount and speed of giving. It is a contrast worthy of its own article.
Here are the recent efforts that have come across our desks.
Accelerating Charitable Efforts Act
Since the pandemic, many have called on Congress to force philanthropists to give more. But this is the only recent reform bill that has gotten any serious traction. Known as the ACE Act, it boasts that increasingly rare label in Washington: bipartisan. Introduced by Senators Angus King (I-ME) and Chuck Grassley (R-IA), the bill aims to change the rules governing donor-advised funds to make sure money gets out the door sooner.
Specifically, it would mandate two new types of accounts. One would grant tax benefits to the donor immediately but require distribution of the funds within 15 years. Another would delay tax benefits until funds are distributed while giving the donor 50 years to do so. Beyond that 50-year period, an excise tax is imposed. Non-cash contributions would only be credited when they are sold for cash and those funds are distributed.
Community foundations would gain a major exception under these rules: Any DAFs under their care with less than $1 million would be exempt from the new restrictions. Accounts over that threshold would receive immediate tax benefits only if they have a 5% annual payout.
The act also proposes changes for foundations. It blocks contributions to donor-advised funds from counting toward foundations’ minimum mandated payout, and does the same for the salaries or travel expenses of foundation family members. It also incentivizes higher payouts and spending down. Taxes on investment income would be eliminated in two situations: for newly created private foundations with a lifespan of 25 years or less, and in any year an institution gives out at least 7% of its assets.
As one might guess, the bill has kicked off a fierce debate. Organizations like the Council on Foundations, the Philanthropy Roundtable and the Community Foundation Public Awareness Initiative have come out against the bill. On the other side are members of the Initiative to Accelerate Charitable Giving, whose recommended changes make up the bulk of the act, among other academic and philanthropic supporters. The bill is reportedly gaining bipartisan support in Congress.
Initiative to Accelerate Charitable Giving
Led by John Arnold, the hedge fund billionaire and co-founder of Arnold Ventures, and Ray Madoff, philanthropy scholar and professor of law, this initiative has already influenced proposed legislation—in many cases, its fixes have been adopted without alteration in the Accelerating Charitable Efforts Act.
The initiative’s success may be due to the cadre of philanthropic power brokers it brought together. Unlike most other efforts listed here, it has attracted some of the country’s largest grantmakers, including the Ford, Kresge, W.K. Kellogg, and William and Flora Hewlett foundations. Signatories also include some of the foremost voices for reform, such as Rob Reich, Stanford professor and author of “Just Giving,” and Edgar Villanueva, who wrote “Decolonizing Wealth.”
Emergency Charitable Stimulus
This campaign was one of the first pandemic-era attempts to force open philanthropy’s bank vaults. Its premise is simple: double the minimum payout level for foundations, from 5% to 10%, for the next three years. Donor-advised funds would also be held to the same standard.
The effort started with a bang with an op-ed in USA Today by the co-chair of the Wallace Global Fund. Led by a group of wealthy individuals known as the Patriotic Millionaires, it tapped donor organizations like the Solidaire Network to attract a who’s who of progressive philanthropy. Signers include funders like the Mary Reynolds Babcock Foundation and the Chorus Foundation, donor groups like Resource Generation and Justice Funders, and heirs like Abigail Disney and two Pritzkers.
Actual legislation, however, has not materialized. With the pandemic heading toward a scary new peak, perhaps this effort will gain new supporters. At the very least, the campaign seems to have helped galvanize the debate over what policymakers might demand of philanthropy.
Crisis Charitable Commitment
Launched by Alan Davis, president of the Leonard and Sophia Davis Fund, this campaign feels almost like a second iteration of the Emergency Charitable Stimulus. Davis is on the advisory board of Patriotic Millionaires, one of the groups behind the stimulus proposal, and wrote an op-ed in The Chronicle of Philanthropy advocating for that campaign.
This effort takes a voluntary approach. It asks foundations to commit to give 6% a year out of their first $50 million in assets and 10% a year of all additional funding. DAFs must also give 10%, or $100,000, whichever is greater. A table of suggested giving levels is provided for wealthy individuals. All the pledges are self-enforced.
Signatories recently hit a total of 100, including the recent addition of the San Francisco Foundation, Tides Foundation and Amalgamated Foundation. Each committed that all DAFs they manage that hold more than $1 million will disburse at least 10% of their balance each year to charity.
Supporters also include many names that will be familiar to anyone who has read through the organizations listed on other pledges. For instance, Jennifer and David Risher—who organized the #HalfMyDAF campaign, covered below—have made the commitment. So has the Wallace Global Fund, which is involved in both the Emergency Charitable Stimulus and the Give While You Live campaigns. Those ties suggest several members were already committed to greater giving. As of August 3, the campaign estimates total associated commitments come to nearly $604 million.
When the pandemic began laying waste to nonprofit budgets in early 2020, Jennifer and David Risher wanted to push fellow donor-advised fund holders to give more. An estimated $140 billion is held in DAF accounts, which have no payout requirements despite their upfront tax benefits.
The California couple pledged to match up to $1 million in gifts to other donors’ favorite causes. The condition? Donors had to commit to giving away half the money in their donor-advised funds by later that year.
The campaign calculates that it mobilized a total of $8.6 million in 2020. This year, it aims to move $20 million. The Rishers—David worked at both Microsoft and Amazon early on—and some partners have put together a $1 million general matching fund, while their daughters and other friends added another $2 million in matching funds for a handful of specific issues.
There’s potentially a lot of money out there to activate. While some research has put the payout percentage for DAFs in the low teens, a recent study by the Council of Michigan Foundations found the median payout for the state’s accounts was just 3.1%, well below the 5% mandated for foundations. More than a third of DAFs studied had not yet paid a single penny to charity.
Give While You Live
Unlike most of these efforts, the Give While You Live campaign predates the pandemic. Launched in January 2020, it asks the world’s billionaires to give 5% of their wealth each year to charity. In other words, as much as foundations are required to pay out annually. It seemed perfectly timed for takeoff, and even had actress and UNICEF ambassador Priyanka Chopra as a pitchwoman.
Since the beginning of the pandemic, billionaires have seen their wealth grow by $1.76 trillion, an increase of nearly 60% according to analysis by Americans for Tax Fairness and the Institute for Policy Studies. There are now 719 people with 10-figure fortunes (i.e., members of the billionaires’ club) versus just 66 two decades ago.
And yet the campaign, led by Global Citizen, has struggled to gain momentum. The first—and seemingly only—pledgers to date are Laura and John Arnold, who join ed in April. And as is often the case, the Arnolds appear to have been giving at a rate of many times that threshold before signing on.