Comment from National Council of Nonprofits

See attached file(s) The National Council of Nonprofits (Council of Nonprofits or NCN) appreciates this opportunity to provide public comments on proposed regulations to guide taxpayers in understanding Internal Revenue Code Sections 4966 and 4967, added to the law by the Pension Protection Act of 2006. Many of the Council of Nonprofits’ more than 30,000 organizational members interact with DAFs as grant recipients, and some serve as DAF sponsors. Based on this experience, we applaud Treasury and the IRS for providing clarifying guidance on issues such as what constitutes a donor advised fund (DAF), who is considered a donor or donor-advisor, what is a taxable distribution from a DAF, and how DAF sponsoring organizations can exercise expenditure responsibility to make grants for charitable purposes to other than section 501(c)(3) organizations. NCN believes that the proposed regulations provide donors, donor advised fund sponsoring organizations, and operating charities that receive DAF grants with important guidance that will serve to increase the flow of needed dollars that address significant charitable missions. We are concerned, however, that some provisions discussed below may inadvertently increase the compliance burden on DAF sponsors and DAF donors, and therefore may result in unnecessary burdens on the flow of philanthropic dollars to the work of charitable organizations. Our comments focus on both the currently proposed regulations as well as potential future proposed regulations that can further the goal of increasing the distribution of dollars controlled by DAFs to the work of charitable nonprofits.