Chronicle of Philanthropy’s Dan Parks summarizes the proposal this way: “𝘛𝘩𝘦 𝘭𝘦𝘨𝘪𝘴𝘭𝘢𝘵𝘪𝘰𝘯 𝘸𝘰𝘶𝘭𝘥 𝘢𝘭𝘭𝘰𝘸 𝘥𝘰𝘯𝘰𝘳𝘴 𝘵𝘰 𝘨𝘦𝘵 𝘢𝘯 𝘶𝘱𝘧𝘳𝘰𝘯𝘵 𝘵𝘢𝘹 𝘥𝘦𝘥𝘶𝘤𝘵𝘪𝘰𝘯 𝘧𝘰𝘳 𝘥𝘰𝘯𝘰𝘳-𝘢𝘥𝘷𝘪𝘴𝘦𝘥-𝘧𝘶𝘯𝘥 𝘥𝘦𝘱𝘰𝘴𝘪𝘵𝘴 𝘰𝘯𝘭𝘺 𝘪𝘧 𝘵𝘩𝘦𝘺 𝘥𝘪𝘴𝘵𝘳𝘪𝘣𝘶𝘵𝘦 𝘵𝘩𝘦 𝘮𝘰𝘯𝘦𝘺 𝘸𝘪𝘵𝘩𝘪𝘯 15 𝘺𝘦𝘢𝘳𝘴. 𝘍𝘰𝘳 𝘤𝘰𝘮𝘮𝘶𝘯𝘪𝘵𝘺 𝘧𝘰𝘶𝘯𝘥𝘢𝘵𝘪𝘰𝘯𝘴…𝘵𝘩𝘦 𝘣𝘪𝘭𝘭 𝘸𝘰𝘶𝘭𝘥 𝘦𝘹𝘦𝘮𝘱𝘵 𝘥𝘰𝘯𝘰𝘳-𝘢𝘥𝘷𝘪𝘴𝘦𝘥 𝘧𝘶𝘯𝘥 𝘢𝘤𝘤𝘰𝘶𝘯𝘵𝘴 𝘰𝘧 $1 𝘮𝘪𝘭𝘭𝘪𝘰𝘯 𝘰𝘳 𝘭𝘦𝘴𝘴 𝘧𝘳𝘰𝘮 𝘢𝘯𝘺 𝘱𝘢𝘺𝘰𝘶𝘵 𝘳𝘦𝘲𝘶𝘪𝘳𝘦𝘮𝘦𝘯𝘵𝘴; 𝘭𝘢𝘳𝘨𝘦𝘳 𝘢𝘤𝘤𝘰𝘶𝘯𝘵𝘴 𝘸𝘰𝘶𝘭𝘥 𝘩𝘢𝘷𝘦 𝘵𝘰 𝘥𝘪𝘴𝘵𝘳𝘪𝘣𝘶𝘵𝘦 𝘢𝘵 𝘭𝘦𝘢𝘴𝘵 5 𝘱𝘦𝘳𝘤𝘦𝘯𝘵 𝘢𝘯𝘯𝘶𝘢𝘭𝘭𝘺.”
In fact, as the Nonprofit Times points out “National standards for community foundations on inactive accounts, a minimum 5% annual payout of assets held in donor-advised funds (DAF), and expanding charitable giving were among the recommendations issued by a group of community foundation leaders working to address issues around the fastest growing area of philanthropy.”National Standards arose because community foundations are proactive and by participating in the accreditation process agree to hold themselves to the highest standards. But it goes beyond that.As their perspective is “in perpetuity”, community foundations have always been in the business of balancing current needs with future needs – with everything from investment strategies to grantmaking, e.g. “payouts”. Because of their commitment to addressing current community needs 𝘸𝘪𝘵𝘩𝘰𝘶𝘵 𝘤𝘰𝘮𝘱𝘳𝘰𝘮𝘪𝘴𝘪𝘯𝘨 𝘵𝘩𝘦𝘪𝘳 𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘵𝘰 𝘮𝘦𝘦𝘵 𝘧𝘶𝘵𝘶𝘳𝘦 𝘯𝘦𝘦𝘥𝘴, many CFs have inactive fund policies for 𝐚𝐥𝐥 𝐨𝐟 𝐭𝐡𝐞𝐢𝐫 𝐟𝐮𝐧𝐝𝐬 – not just donor-advised funds.
Community foundations have always deployed many creative ways to increase funding to their communities when it’s most needed, including increasing payouts from discretionary funding and opening specific funds where donations will be immediately paid out to support their communities during COVID, weather-related disasters, and other crises.
For more on community foundation donor-advised fund payouts take a look at the Council of Michigan Foundations CEO’s summary of the research CMF commissioned – Donor Advised Funds from a Community Foundation Perspective
National Standards for U.S. Community Foundations, an accreditation program of Council on Foundations, developed a sample ‘inactive fund policy’ to help CFs assure their policies are ahead of legislation