The rich have stashed billions in donor-advised charities -- but it's not reaching those in need

[Yo_Mama_Been_Loggin]

In December 2017, Google co-founder Larry Page made what appeared to be generous donations to two charities. To one charity, according to tax records filed by Page’s foundation, he gave $100 million in cash and stock. To the other, records show, Page gave $80 million in cash.

Two and a half years later, it’s unclear if any of that money funded any charitable works, or if it’s all still sitting in accounts mostly controlled by Page, collecting interest and earning investment income.

That’s because the organizations on the receiving end of Page’s donations were not working charities — such as the American Red Cross or the United Way — but donor-advised funds, a controversial and booming form of philanthropy attracting increasing scrutiny and criticism amid the coronavirus pandemic, as charities face a historic crisis. Page did not reply to a request for comment for this story. Spokesmen at the organizations that received his donations in 2017 — Schwab Charitable and the National Philanthropic Trust — declined to comment, citing privacy rules.

Known in the industry as DAFs (rhymes with calves) — and criticized by some insiders as “zombie philanthropy” — the money and assets in donor-advised funds are intended to go to charity some day, but there are no payout requirements, and money can sit in a donor-advised fund for decades.

DAFs are the fastest growing form of charitable spending in America, with more than $120 billion in DAF accounts across the country in 2018, according to the most recent industry estimates, up from $45 billion just six years earlier. And while some executives who oversee these funds say critics exaggerate potential abuses, the coronavirus pandemic has prompted a few wealthy DAF users to express rising concern about the way these funds are managed.

https://www.washingtonpost.com/lifestyle/style/zombie-philanthropy-the-rich-have-stashed-billions-in-donor-advised-charities--but-its-not-reaching-those-in-need/2020/06/23/6a1b397a-af3a-11ea-856d-5054296735e5_story.html

[sprinkleeninow]

1. Culture of Corruption. eom

[marybourg]

2. Not entirely true. The DAF as a whole must, just like

private foundations, expend 5% of their assets per year to charitable causes. To this end they reserve the right to force any grantor to expend 5%. But since most grantors expend many times that amount yearly on grants to charities, they haven’t had to force any grantors to do so.

These DAFs are a kind of “poor man’s foundation”, allowing even middle class folks ( not actually the poor) to set up a mechanism for endowing charities even beyond their lifetimes, just like rich folks do. I don’t see that rich folks foundations are being attacked, just the middle class DAFs.

The income earned inside these DAFs never go to the grantor. Only to a charity.