Conclusion

DAFs are the fastest-growing charitable-giving vehicles in the US. In addition to increasing numbers of such accounts and charitable grants disbursed from them, DAFs may hold more than $5 billion in appreciated assets, realized through investment and which, by law, are reserved for only one purpose: future charitable giving. This can be viewed as a charitable endowment, funds that can be directed for charitable purposes in times of crisis or that can be dispersed in large lump sums to reflect a donor’s lifetime charitable goals.

Some donors may, indeed, prefer to use DAFs simply to “pass through” their charitable giving directly, and fully, to operating charities in the near term. But the potential of appreciated assets demonstrates a value in “giving and holding”—waiting to disburse contributions while one’s assets gain value. Because, ultimately, all appreciated assets will have to be disbursed, this decision as to the timing of charitable giving should be understood as personal and need not be regulated.

About the Author

Howard Husock is an adjunct fellow at the American Enterprise Institute and a senior executive fellow at Philanthropy Roundtable. Husock was a senior fellow at the Manhattan Institute, where he served as vice president for research and publications from 2006 to 2019. He also directed the Institute’s Tocqueville Project, which includes the annual Civil Society Awards and the Civil Society Fellows Program.