Understanding the ACE Act

August 4, 2021

By now you may be aware of the Accelerating Charitable Efforts (ACE) Act, which was introduced by Senators King and Grassley in June. Among other things, the ACE Act establishes new rules for private and community foundations and their respective donor-advised funds specific to deduction eligibility and payout requirements and timelines.

This piece of legislation is the subject of a rigorous debate within the philanthropic sector, with strong opposition from the Council on Foundations and others. Supporters include the Initiative to Accelerate Charitable Giving and other groups that advocate for reform of tax laws related to charitable giving.

The Denver Foundation is monitoring the ACE Act and closely following developments to inform our analysis of the benefits and potential impact of the legislation. We are in conversation with the Council on Foundations as well as Philanthropy Colorado and our fellow community foundations.

In our experience, our donor-advised fundholders are both generous and active, distributing between 16-20% of their fund balance annually. We will weigh the question of how increased regulation might impact the kind of engaged philanthropy we see among our donors and what types of reform might move us toward the equitable future that is the cornerstone of our work.

We look forward to sharing updates on this issue, as well as our own evolving policy framework, in coming months. In the meantime, we welcome your feedback on the ACE Act and the regulation of donor-advised funds as a whole; please email feedback to information@denverfoundation.org.

Here are some resources for learning more about the ACT Act:

News coverage: