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Law360 (May 19, 2020, 7:55 PM EDT ) More than 275 philanthropic leaders and donors urged Congress to include emergency charity stimulus legislation in a coronavirus relief bill that would temporarily double the percentage of assets private foundations must spend each year, according to a letter released Tuesday.
Lawmakers should require private foundations to spend at least 10% of their assets on grants and overhead each year for three years, instead of the current 5%, the Emergency Charity Stimulus campaign said in a letter to a bipartisan group of congressional leaders. There's no justification for permitting America's wealthiest dynasties to continue stockpiling tax-advantaged funds designated as charitable contributions while many urgent causes need funding now, the group said.
Congress should also impose the same 10% standard for donor-advised funds, which currently don't have a payout requirement, according to the group.
Prominent signers of the letter include Aileen Getty, granddaughter of J. Paul Getty, and Abigail Disney. The Emergency Charity Stimulus campaign is supported by six groups including the Wallace Global Foundation, Patriotic Millionaires and the Institute for Policy Studies.
The move would allow Congress to inject more than $200 billion into the economy in the next three years without additional spending, according to estimates from the Institute for Policy Studies.
According to the campaign, private foundations hold $1.2 trillion, and donor-advised funds have another $120 billion.
Chuck Collins, director of the Charity Reform project at the Institute for Policy Studies, co-authored a paper released earlier this month that made the case for increasing the payout requirements on private foundations and donor-advised funds.
In 2018, donor-advised funds held $121 billion in assets and awarded $23 billion in grants, according to Collins and co-author Helen Flannery. The largest foundations also tend to pay out at much lower rates, the paper said.
A spokesman for Senate Finance Committee Chairman Chuck Grassley, R-Iowa, told Law360 that Grassley would work with colleagues on another virus relief bill "if it becomes necessary" and that it's too early to say what might be in it.
Representatives for other congressional leaders didn't respond to requests for comment.
--Editing by Neil Cohen.
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