The Arnolds are the first billionaires to join Global Citizen's Give While You Live campaign, which calls on the more than twenty-one hundred billionaires around the world to give at least 5 percent of their wealth every year to help end extreme poverty and achieve the United Nations' Sustainable Development Goals by 2030. The couple's pledge is part of a collaboration between Global Citizen and the Initiative to Accelerate Charitable Giving — a coalition of donors, nonprofits, and experts launched last December with the aim of getting Congress to provide greater incentives for private foundations, donor-advised funds (DAFs), and individuals to increase their charitable giving.
The initiative's proposals include closing loopholes in the 5 percent payout requirement for foundations, reducing the excise tax paid by private foundations to zero for any foundation that pays out at least 7 percent in a given year, creating a new type of DAF through which the donor would receive upfront tax benefits only if the funds deposited in the DAF were distributed within fifteen years, and expanding and extending the new charitable deduction for individuals who do not itemize their returns.
"Right now, many charities are in danger of not surviving the pandemic. Yet more than $1 trillion promised to them remains warehoused in tax-free investment accounts," said John Arnold, who, with his wife, signed the Giving Pledge in 2010. "America's charities cannot afford to wait for some larger crisis to arise. Business as usual is simply not good enough."
"Some donor-advised funds, emulating the Arnolds' example, are committed to timely and ongoing distribution of their resources. But others are not," said Edward A. Zelinsky, a tax law professor at Yeshiva University's Benjamin N. Cardozo School of Law. "For some, the Arnolds' example may now be instructive, but I unfortunately do not believe that their example will be followed by all."
(Photo credit: Todd Spoth)