The other side of donor-advised funds
I was disappointed to read your editorial “Don’t mess with donor-advised funds
” (June 25). As the holder of a donor-advised fund and a professional fundraiser, I strongly believe that the Accelerating Charitable Efforts (ACE) Act is much-needed legislation.
You say in the first paragraph that “the funds must be distributed at some time.” This is not true. Currently there is no requirement that DAFs distribute their funds — ever.
What you didn’t mention in your editorial is that the ACE Act would close some DAF loopholes that are hard to justify. For example, private foundations are currently permitted to count donations they make to their own DAFs as part of the 5% of assets they are required to pay out each year. Similarly, foundations can count salaries and travel expenses for family members toward the 5% payout. This money is intended to go for charitable purposes — not to be used for enriching oneself or one’s relatives.
From what I can see, the bill’s main opponents are for-profit companies that earn a percentage on every dollar that is sitting in a DAF. If DAFs paid out more money, there would be less money to collect these fees on. As a DAF holder, I want my money to go to worthy causes, not financial institutions. This legislation would encourage donors, like myself, to put our resources to work helping those in need.