875
adding after subparagraph (C) the following new 
subparagraphs: 
‘‘(D) which involves a donor advised fund 
(as defined in section 4966(d)(2)), any person 
who is described in paragraph (7) with respect 
to such donor advised fund (as so defined), and 
‘‘(E) which involves a sponsoring organiza-
tion (as defined in section 4966(d)(1)), any per-
son who is described in paragraph (8) with re-
spect to such sponsoring organization (as so de-
fined).’’. 
(2) DONORS, DONOR ADVISORS, AND INVEST-
MENT ADVISORS TREATED AS DISQUALIFIED PER-
SONS.—Section 4958(f) is amended by adding at the 
end the following new paragraphs: 
‘‘(7) DONORS AND DONOR ADVISORS.—For pur-
poses of paragraph (1)(E), a person is described in 
this paragraph if such person—
‘‘(A) 
is 
described 
in 
section 
4966(d)(2)(A)(iii), 
‘‘(B) is a member of the family of an indi-
vidual described in subparagraph (A), or 
‘‘(C) is a 35-percent controlled entity (as 
defined in paragraph (3) by substituting ‘per-
sons described in subparagraph (A) or (B) of
876
paragraph (7)’ for ‘persons described in sub-
paragraph (A) or (B) of paragraph (1)’ in sub-
paragraph (A)(i) thereof). 
‘‘(8) INVESTMENT ADVISORS.—For purposes of 
paragraph (1)(F)—
‘‘(A) IN GENERAL.—A person is described 
in this paragraph if such person—
‘‘(i) is an investment advisor, 
‘‘(ii) is a member of the family of an 
individual described in clause (i), or 
‘‘(iii) is a 35-percent controlled entity 
(as defined in paragraph (3) by sub-
stituting ‘persons described in clause (i) or 
(ii) of paragraph (8)(A)’ for ‘persons de-
scribed in subparagraph (A) or (B) of 
paragraph (1)’ in subparagraph (A)(i) 
thereof). 
‘‘(B) INVESTMENT
ADVISOR
DEFINED.—
For purposes of subparagraph (A), the term 
‘investment advisor’ means, with respect to any 
sponsoring organization (as defined in section 
4966(d)(1)), any person (other than an em-
ployee of such organization) compensated by 
such organization for managing the investment 
of, or providing investment advice with respect
877
to, assets maintained in donor advised funds 
(as defined in section 4966(d)(2)) owned by 
such organization.’’. 
(b) CERTAIN TRANSACTIONS TREATED AS EXCESS 
BENEFIT TRANSACTIONS.—
(1) IN GENERAL.—Section 4958(c) is amended 
by redesignating paragraph (2) as paragraph (3) 
and by inserting after paragraph (1) the following 
new paragraph: 
‘‘(2) SPECIAL
RULES
FOR
DONOR
ADVISED 
FUNDS.—In the case of any donor advised fund (as 
defined in section 4966(d)(2))—
‘‘(A) the term ‘excess benefit transaction’ 
includes any grant, loan, compensation, or other 
similar payment from such fund to a person de-
scribed in subsection (f)(7) with respect to such 
fund, and 
‘‘(B) the term ‘excess benefit’ includes, 
with respect to any transaction described in 
subparagraph (A), the amount of any such 
grant, loan, compensation, or other similar pay-
ment.’’. 
(2) SPECIAL RULE FOR CORRECTION OF TRANS-
ACTION.—Section 4958(f)(6) is amended by insert-
ing ‘‘, except that in the case of any correction of
878
an excess benefit transaction described in subsection 
(c)(2), no amount repaid in a manner prescribed by 
the Secretary may be held in any donor advised 
fund’’ after ‘‘standards’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to transactions occurring after the 
date of the enactment of this Act. 
SEC. 1233. EXCESS BUSINESS HOLDINGS OF DONOR AD-
VISED FUNDS. 
(a) IN GENERAL.—Section 4943 is amended by add-
ing at the end the following new subsection: 
‘‘(e) APPLICATION
OF TAX
TO DONOR ADVISED 
FUNDS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, a donor advised fund (as defined in section 
4966(d)(2)) shall be treated as a private foundation. 
‘‘(2) DISQUALIFIED PERSON.—In applying this 
section to any donor advised fund (as so defined), 
the term ‘disqualified person’ means, with respect to 
the donor advised fund, any person who is—
‘‘(A) 
described 
in 
section 
4966(d)(2)(A)(iii), 
‘‘(B) a member of the family of an indi-
vidual described in subparagraph (A), or
879
‘‘(C) a 35-percent controlled entity (as de-
fined in section 4958(f)(3) by substituting ‘per-
sons described in subparagraph (A) or (B) of 
section 4943(e)(2)’ for ‘persons described in 
subparagraph (A) or (B) of paragraph (1)’ in 
subparagraph (A)(i) thereof). 
‘‘(3) PRESENT
HOLDINGS.—For purposes of 
this subsection, rules similar to the rules of para-
graphs (4), (5), and (6) of subsection (c) shall apply 
to donor advised funds (as so defined), except that—
‘‘(A) ‘the date of the enactment of this 
subsection’ shall be substituted for ‘May 26, 
1969’ each place it appears in paragraphs (4), 
(5), and (6), and 
‘‘(B) ‘January 1, 2007’ shall be sub-
stituted for ‘January 1, 1970’ in paragraph 
(4)(E).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 1234. TREATMENT OF CHARITABLE CONTRIBUTION 
DEDUCTIONS TO DONOR ADVISED FUNDS. 
(a) INCOME.—Section 170(f) (relating to disallow-
ance of deduction in certain cases and special rules), as
880
amended by this Act, is amended by adding at the end 
the following new paragraph: 
‘‘(18) CONTRIBUTIONS
TO
DONOR
ADVISED 
FUNDS.—A deduction otherwise allowed under sub-
section (a) for any contribution to a donor advised 
fund (as defined in section 4966(d)(2)) shall only be 
allowed if—
‘‘(A) the sponsoring organization (as de-
fined in section 4966(d)(1)) with respect to 
such donor advised fund is not—
‘‘(i) described in paragraph (3), (4), 
or (5) of subsection (c), or 
‘‘(ii) a type III supporting organiza-
tion (as defined in section 4943(f)(5)(A)) 
which is not a functionally integrated type 
III supporting organization (as defined in 
section 4943(f)(5)(B)), and 
‘‘(B) the taxpayer obtains a contempora-
neous written acknowledgment (determined 
under rules similar to the rules of paragraph 
(8)(C)) from the sponsoring organization (as so 
defined) of such donor advised fund that such 
organization has exclusive legal control over the 
assets contributed.’’.
881
(b) ESTATE.—Section 2055(e) is amended by adding 
at the end the following new paragraph: 
‘‘(5) CONTRIBUTIONS
TO
DONOR
ADVISED 
FUNDS.—A deduction otherwise allowed under sub-
section (a) for any contribution to a donor advised 
fund (as defined in section 4966(d)(2)) shall only be 
allowed if—
‘‘(A) the sponsoring organization (as de-
fined in section 4966(d)(1)) with respect to 
such donor advised fund is not—
‘‘(i) described in paragraph (3) or (4) 
of subsection (a), or 
‘‘(ii) a type III supporting organiza-
tion (as defined in section 4943(f)(5)(A)) 
which is not a functionally integrated type 
III supporting organization (as defined in 
section 4943(f)(5)(B)), and 
‘‘(B) the taxpayer obtains a contempora-
neous written acknowledgment (determined 
under rules similar to the rules of section 
170(f)(8)(C)) from the sponsoring organization 
(as so defined) of such donor advised fund that 
such organization has exclusive legal control 
over the assets contributed.’’.
882
(c) GIFT.—Section 2522(c) is amended by adding at 
the end the following new paragraph: 
‘‘(5) CONTRIBUTIONS
TO
DONOR
ADVISED 
FUNDS.—A deduction otherwise allowed under sub-
section (a) for any contribution to a donor advised 
fund (as defined in section 4966(d)(2)) shall only be 
allowed if—
‘‘(A) the sponsoring organization (as de-
fined in section 4966(d)(1)) with respect to 
such donor advised fund is not—
‘‘(i) described in paragraph (3) or (4) 
of subsection (a), or 
‘‘(ii) a type III supporting organiza-
tion (as defined in section 4943(f)(5)(A)) 
which is not a functionally integrated type 
III supporting organization (as defined in 
section 4943(f)(5)(B)), and 
‘‘(B) the taxpayer obtains a contempora-
neous written acknowledgment (determined 
under rules similar to the rules of section 
170(f)(8)(C)) from the sponsoring organization 
(as so defined) of such donor advised fund that 
such organization has exclusive legal control 
over the assets contributed.’’.
883
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made after the 
date which is 180 days after the date of the enactment 
of this Act. 
SEC. 1235. RETURNS OF, AND APPLICATIONS FOR RECOGNI-
TION BY, SPONSORING ORGANIZATIONS. 
(a) MATTERS INCLUDED ON RETURNS.—
(1) IN GENERAL.—Section 6033, as amended 
by this Act, is amended by redesignating subsection 
(k) as subsection (l) and by inserting after sub-
section (j) the following new subsection: 
‘‘(k) ADDITIONAL PROVISIONS RELATING TO SPON-
SORING ORGANIZATIONS.—Every organization described 
in section 4966(d)(1) shall, on the return required under 
subsection (a) for the taxable year—
‘‘(1) list the total number of donor advised 
funds (as defined in section 4966(d)(2)) it owns at 
the end of such taxable year, 
‘‘(2) indicate the aggregate value of assets held 
in such funds at the end of such taxable year, and 
‘‘(3) indicate the aggregate contributions to and 
grants made from such funds during such taxable 
year.’’. 
(2) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to returns filed for