Department of the Treasury Issues Report on Supporting Organizations and Donor Advised Funds
On December 5, 2011, the Department of the Treasury (“Treasury”) issued a “Report to Congress on Supporting Organizations and Donor Advised Funds” (the “Report”). The Report was mandated by the Pension Protection Act of 2006 (the “PPA”). Specifically, Treasury was directed to study particular aspects of the operation of supporting organizations and donor advised funds (“DAFs”), including:
(1) whether deductions in respect of contributions to sponsoring organizations of DAFs or to supporting organizations are appropriate in consideration of their use of contributed assets (including timing of use);
(2) whether DAFs should be required to distribute a specified amount based on income or assets;
(3) whether the retention by donors of advisory rights or privileges is consistent with treatment of such transfers as completed gifts eligible for current deduction; and
(4) whether the issues raised above are also issues with respect to other forms of charities or charitable donations.