A bipartisan group of legislators has introduced the Accelerating Charitable Efforts (ACE) Act in the U.S. House of Representatives. The ACE Act mirrors a bill introduced in the Senate in June 2021. It would create two new types of donor-advised funds (DAFs) — 15-year (or qualified) and 50-year (non-qualified) — with the timing and availability of various tax benefits hinging on how quickly the funds are distributed after donation.
The ACE Act would allow a donor to hold up to $1 million in DAF funds at any community foundation without being subject to payout rules. For amounts over $1 million, a donor could receive upfront tax benefits if the DAF requires a 5% annual payout or if donations must be distributed within 15 years of contribution. The bill also would reform rules for private foundations.