Donor-Advised Funds: Current Policy Landscape

Donor-advised funds (DAFs) remain an important and evolving policy area for philanthropy. AFP recognizes that DAFs play a valuable role in enabling individuals and families to make charitable contributions and support a wide range of nonprofit causes.

At the same time, policymakers in Congress and at the Treasury have expressed ongoing interest in potential changes to DAF rules, including questions about payout expectations and transparency. Some proposals under consideration would encourage greater grant activity from DAFs, while others would impose new reporting or regulatory requirements.

AFP’s advocacy reflects our core principles:

• Protect donor choice and flexibility in how philanthropic dollars are invested and granted to public charities
• Avoid punitive taxes, excessive regulation, or artificial payout mandates that could discourage contributions to DAFs or complicate nonprofit planning
• Encourage thoughtful, evidence-based policy improvements, such as measures that support increased grantmaking without undermining the fundamental purpose of DAFs

AFP continues to engage with lawmakers, the Treasury Department, and relevant regulators as possible updates to DAF policy are discussed. We urge any reforms to be developed with robust input from the nonprofit community and to preserve the essential charitable incentives that make DAFs a vital part of the philanthropic ecosystem.
 

How AFP Helped Shape the DAF Policy Conversation: 2024 IRS Letter

What AFP is Monitoring

• Congressional interest in legislative proposals affecting DAFs
• IRS regulatory activity related to donor-advised fund operations
• Tax policy discussions tied to charitable giving incentives broadly

AFP will update this page with concrete developments as they occur, along with member-focused analysis and guidance on implications for fundraising practice.

For example: H.R. 2891, the IRA Charitable Rollover Facilitation and Enhancement Act of 2025, was introduced in the 119th Congress by Rep. Adrian Smith (R-NE) with Rep. Jimmy Panetta (D-CA) as cosponsor to allow individuals to make qualified charitable distributions from IRAs directly to donor-advised funds.The bipartisan House bill allowing IRA rollovers to donor-advised funds is supported by a coalition of community foundations and the Council on Foundations. It is currently awaiting introduction of a Senate companion measure.