Washington, DC, June 10, 2020 — The coronavirus pandemic has ravaged economies around the world. Millions of Americans are sick with COVID-19, and millions more have lost their jobs. It follows that, in the face of COVID-19, most Americans recognize working charities are straining (70%) and think Congress should mandate an emergency 3-year increase in foundation payout from 5 percent of assets to 10 percent –and require that donor-advised funds have a 10 percent payout to active charities – even if this reduces the overall amount of money in these foundations and DAFs into the future (72%), according to the results of a recent poll conducted by Ipsos on behalf of Giv3. Additionally, eight in ten (79%) Americans think donor-advised charity funds (DAFs) should have a minimum annual payout and there should be greater transparency, even if it reduces the amount of money that will accumulate in theses DAFs over time.
While four in five (80%) hold the perception that U.S. taxpayers should not have to subsidize wealthy Americans who wish to create permanent legacy foundations that will exist in perpetuity to give donations to charities of their choosing, equally as many (81%) agree that charitable foundations play an important role because they can act independent of the bureaucracy of government, make decisions free of the politics of elected officials, can address gaps not addressed by governments, and can accumulate assets to help address fluctuations in the economy from year to year (like a `rainy day emergency fund`) and in perpetuity. And yet more than half (52%) describe the accumulation of wealth in foundations as being unacceptable. A clear majority (59%) find it acceptable that private foundations are mandated to payout a minimum annual payout requirement of 5 percent to be granted to qualified charities and/or to cover their overhead administration costs.
A full two-thirds (66%) of Americans feel it is unacceptable that, thanks to COVID-19, working charities, such as food banks, hospitals and health centers are straining as both government funds and private charity resources are being stretched thin. About as many (64%) think it is unacceptable that many of the more than 12 million Americans employed by the independent non-profit sector (i.e., organizations assisting seniors, the homeless, etc.) may soon be unemployed if donations decrease, though fewer than half (42%) admit they were aware that so many people were employed by this sector prior to the taking the survey.
The results of this poll suggest reforms to DAFs and private foundations could also be needed. Around three-fifths (61%) of Americans think it is unacceptable that donors can receive generous tax reductions when funding private charity foundations and donor-advised charity funds. For the wealthiest donors, as much as 70 cents of each dollar is subsidized by taxpayers in the form of lost tax revenue. Seven in ten (69%) say it is unacceptable that private donor-advised charity funds (DAFs) are under no obligation to disburse any funds to active charities. Donors take tax deductions when contributing to DAF but there is no mandated payout.
Ignorance is Bliss?
There is a lot the average American doesn’t know about private foundations and DAFs. For starters, only about one in three (36%) claim to know about private foundations, and how they work for donors and charities or that donors receive generous tax reductions when funding private charities or DAFs (32%).
One in four (24%) report awareness of the fact there is a lot of money accumulated in charities while closer to one in five say they know private foundations are mandated to payout a minimum of 5 percent to be granted to qualified charities and/or to cover their overhead administration costs (19%) or that DAFs are under no obligation to disburse any funds to active charities (19%). Just seventeen percent (17%) are aware of DAFs, and how they work.
About the Study
These are some of the findings of an Ipsos poll conducted between May 23rd and 24th, 2020 on behalf of Giv3. For this survey, a sample of 1,005 Americans aged 18+ were interviewed. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±3.5 percentage points, 19 times out of 20, had all Americans 18+ been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
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