ACE Act

The Accelerating Charitable Efforts (ACE) Act proposes new rules for Donor Advised Funds (DAFs) and private foundations to ensure that charitable donations reach working charities in a more timely manner. Under current law, donors can receive immediate tax breaks for putting money into these funds even if the money is not distributed to a charity for many years; this bill would require funds to be distributed within specific timeframes—generally 15 to 50 years—for the donor to maintain those tax benefits.

For the average citizen, this legislation aims to increase the immediate flow of resources to local nonprofits, food banks, and community organizations by discouraging the long-term "warehousing" of charitable dollars. By imposing penalties on undistributed funds and reforming how private foundations meet their payout requirements, the bill seeks to ensure that tax-deducted donations are actively used to address current social needs rather than sitting in investment accounts indefinitely.