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Bill

HD 3305

An Act regulating Donor Advised Funds

194th Legislature (2025-2026) Introduced by Mike Day

Massachusetts bill requiring Donor Advised Funds to distribute contributed assets to charities within specified timeframes, reducing indefinite accumulation while maintaining tax incentives for donors.

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WeVote Research Nonpartisan
Bill Summary · HD 3305

Legislative bill overview

HD 3305 proposes to regulate Donor Advised Funds (DAFs) in Massachusetts by establishing oversight requirements for these charitable giving vehicles. The bill likely aims to ensure that funds contributed to DAFs are distributed to charitable causes within specified timeframes, rather than accumulating indefinitely. This addresses concerns that DAFs can function as tax shelters where donors receive immediate tax benefits without ensuring timely charitable distribution.

Why is this important

DAFs have grown substantially as a giving mechanism, with billions in assets, yet donors can delay actual charitable distributions indefinitely while receiving upfront tax deductions. Massachusetts regulation could pressure funds to distribute assets more promptly to nonprofits, potentially increasing charitable giving velocity. This also affects high-net-worth individuals' tax planning strategies and could influence how charitable giving is structured in the state.

Potential points of contention

  • Charitable flexibility vs. accountability: Donors may resist payout requirements that limit their ability to time distributions strategically, while charities advocate for faster access to committed funds
  • Tax implications: The bill may reduce the attractiveness of DAFs as tax planning tools, affecting donor participation rates and total charitable contributions
  • Definitional challenges: Determining appropriate distribution timelines and what qualifies as "charitable purpose" requires careful drafting to avoid unintended consequences for legitimate giving strategies

Compiled from official sources — confirm details with the bill’s official record.

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