President Signs Reform Bill Without Limitation on International Grants from Donor-Advised Funds

(August 17, 2006)

President Bush signed the Pension Protection Act of 2006 (H.R. 4) into law on August 17, 2006. The new law includes reforms and incentives that directly affect grantmakers. The key international grantmaking issue in H.R. 4 involves the ability to make grants from donor-advised funds to non-U.S. organizations.

Initially the Senate approved a proposal that would have limited international grants from donor-advised funds to 501(c)(3) organizations or their equivalents. By the time this provision passed the House, however, it had been amended to permit international grants from donor-advised funds using either equivalence determination or expenditure responsibility. Since many U.S. public charities with donor-advised funds currently follow expenditure responsibility rules to make grants to non-U.S. organizations, the new law will allow them to continue doing so.

A detailed analysis of the provisions of H.R. 4, prepared by the Council on Foundations, can be found on the Council’s H.R. 4 Resources page at www.cof.org/hr4.