Friday, June 24, 2016
The United States relies heavily on charities, and in return, those that donate receive a generous tax break on the income donated. Experts argue that this charitable relationship is at risk due to a collective, managing, and distributive fund—donor-advised fund—that is obstructing the stream of money to those who need it. Instead of the money going directly to the charity of choice, it goes to a financial firm that acts as a middleman. These funds are considered legal charities that can distribute money over a long period of time, keeping it out of the hands of those charities that sincerely rely on the funds. As donor-advised funds are on the rise, an estimated $15 billion could be delayed to American charities.
See Ana Swanson, Wall Street Is Sitting on Billions Meant for American Charities, Washington Post, June 21, 2016.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.