Where’s all that money going, and how long will it sit there? I think Donor-Advised Funds (DAF) are a great idea - I think Donor-Advised Funds are diverting charitable giving. When you look at the tally figures in the May 27, 2004 issue of The Chronicle of Philanthropy you have to wonder if DAFs are really in charities’ best interest. The individual donors to the 90 funds that now hold $11.3 billion in assets are correct in believing that they have already made a charitable gift, but then they get to decide at a later date just who it ought to go to, or just let it sit there. Yet the contradiction is that $2.1 billion or a strong 18.6% went out in direct charitable gifts last year. But wait a minute - how much is still sitting there in the form of an “intended/un-intended” (?) endowment, while the donor gets credit for a fully-expended charitable gift?
I’m very mixed about this, but to be honest, I’m also very jealous of the 90 funds that have “raised” and now hold all this money, because I spent 50 years on the fund-raising side of the field, and only now am I just spending and not raising charitable monies.
There are some enormous amounts accumulating in these funds. The for-profit companies must be making big profits. Why are DAFs treated differently than other foundation resources? Should each fund have an expenditure minimum? Should nonprofits be able to access the donors to make requests?