This reports on growth of donor-advised funds, now a $53 billion sub-sector of a philanthropy sector of $325 billion, as written by Howard Husock, Vice President, Manhattan Institute:
Husock is clearly expressing in vivid terms the virtues of NDAF’s – national donor-advised funds such as those provided by Schwab and Fidelity. He shows data that NDAF accounts (not funds) have expanded by 10,000,000+ since Congress ratified DAF’s in 2006. His argument is that these funds “democratize” philanthropy – making family-foundation-like systems and support available to a much broader base. He points out that their minimum fund requirements are much smaller than Community Foundations (sometimes they require as little as $5,000 to establish a NDAF account.)
Opposing 2014 Tax Code Revisions
In this report, he opposes the 2104 proposed change to the tax code, made the Congressman Camp, wherein all Donor-Advised Funds would be required to spend invested assets within five years. He cites arguments advanced for this change by a Boston College Professor of Law.
His argument is that DAF growth, perhaps from $53 billion to $100 billion+ by 2020, will be one of the reasons that philanthropy in the US, currently just below 2% of GDP (which is far ahead of other countries) could actually exceed 2%.
He has a special interest in NDAF’s. He actually is using data provided by them for the report:
“This paper uses data provided by Fidelity, Vanguard, and Schwab to compare giving patterns for donors in NDAF-based DAFs with those of community foundations (including from the latter’s general funds and DAF accounts).
The end of the report is optimistic:
“DAFs housed in NDAFs and major community foundations could signal a new era in U.S. mass philanthropy (one rivaling, say, the Community Chest / United Way movement of the 1920s). The potential thus exists for a large group of relatively small donors to make a big positive difference in the magnitude of what is already the world’s largest charitable giving sector.”