IRS DAF Changes for 2020

We want to bring your attention to operational changes to our grant process from a Donor Advised Fund (DAF). The Internal Revenue Service has issued new rules which change two types of grants from a DAF.

First, you will no longer be able to recommend a grant to pay for events, galas, memberships, and dues where there is an economic benefit included in the cost. Previously, such a grant request could be bifurcated (split) with the tax-deductible portion paid from your DAF and the nondeductible, or benefit portion, paid directly by you to the nonprofit organization. Therefore, the Foundation will no longer be able to pay any portion of the cost from a DAF starting January 1, 2020.

Second, on a positive note, a DAF will now be able to pay a personal pledge to a nonprofit organization. Grant recommendations for payments of pledges by donors were previously not allowed. This new beneficial rule will be effective on January 1, 2020.

We understand these new rules will affect you as an individual as well as the agencies you support. Please contact us to help you navigate any issues that this may cause.

Thanks for your support of the Foundation.