Hearings on Proposed Treasury Regulations

In November 2023, the U.S. Department of the Treasury and the IRS released proposed regulations related to donor advised funds (DAFs), providing guidance on Sections 4966 and 4967 of the Internal Revenue Code. The proposed regulations can be found HERE.

As written, the proposed regulations could have a negative impact on DAF sponsors like East Tennessee Foundation (“ETF”), donors, and other stakeholders. The period for written comments closed on February 15, 2024. ETF, along with other foundations and a number of industry groups of which ETF is a member, submitted comments expressing our concerns with the regulations as proposed. A copy of ETF’s comments can be found HERE.

Specifically, the proposed Treasury Regulations have assigned overly broad definitions to several fundamental terms, created a number of new issues, and left other important issues unaddressed. Examples include:

  • The proposed definition of a DAF could result in other types of restricted funds being classified as DAFs, including certain designated funds, field of interest funds, affiliate funds, and funds that are administered by committees. Reclassification of these funds would pose administrative challenges to community foundations like ETF and cause issues with certain gift types for donors.
  • The proposed definition of DAF advisors would be extended to include investment managers of DAF assets who are also the personal investment manager for a DAF donor. This would upend the widely accepted investment management practice among DAF sponsors whereby sponsors can work closely with financial advisors and investment managers to carry out the charitable goals of their clients.


The Treasury has scheduled a public hearing on the proposed regulations in Washington, DC next week on Monday and Tuesday, May 6-7. Several community foundation presidents from across the country will speak at the hearing, as will representatives from partner organizations. Representatives from ETF, along with our community foundation partners, will be monitoring the hearing via telephone.

We will keep you updated once the new rules are finalized, and after we have had an opportunity to analyze the extent to which they affect ETF operations, policies and grantmaking.

Our team would be happy to discuss issues related to DAF reform or other questions related to ETF Donor Advised Funds. If you have questions, please contact Angelia Nystrom, Vice President for Advancement + Chief Legal Counsel, at an******@et*.org, or at 865.524.1223.