A recent paper by donor-advised fund critic Roger Colinvaux revisits the debunked narrative surrounding these popular giving vehicles. Rather than providing new analysis or information, the author summarizes prior claims and dedicates the paper to advocating for S. 1981, the King-Grassley legislation introduced last year.
The paper is centered around three false claims about DAFs familiar to Philanthropy Roundtable blog readers.
- Donor-advised funds (DAFs) have no statutory payout requirement.
- Funds are not making it from DAFs to “working charities” fast enough.
- Regulating DAFs will fix these “problems.”
No new information is offered to support the author’s pitch for S. 1981. Throughout, Colinvaux simply counters the data we and others who care about fostering more charitable giving regularly discuss by providing hypothetical scenarios and unfounded assumptions to claim a problem exists. For those who care to revisit this debate, see our earlier pieces on the strong payout rates of DAFs, the administrative burdens of S. 1981, the flawed data underpinning S. 1981, DAF-to-DAF transfers are rare and insignificant and how the community foundation carve-out misses the mark.
The more concerning element of this paper is it ignores the very nature of charitable giving as a voluntary action. The attack on DAFs here is not only a reiteration of hypothetical problems without supporting evidence, but also an attack on donors. Throughout the report, there is a depiction of DAF donors as wealthy individuals seeking to skirt taxes and accumulate more wealth through their donations to DAFs and the threat of “growing accumulations of charitable wealth and power under the effective control of wealthy donors not charities.”
What a sad, misguided view of philanthropy in America.
The reason we at the Roundtable are so committed to protecting philanthropic freedom is that giving is voluntary. The generous Americans who choose to give money to charities should have the choice to decide when, where and how they make those gifts. It isn’t the role of government to micromanage an individual’s giving. The author argues that the average payout rate for DAFs is the wrong metric, and that the focus should be on the individual account level giving of each and every donor. He argues every donor should be forced to give on the timetable determined by two senators and a handful of DAF critics.
But here’s the thing: Take away choice, and donors, wealthy or otherwise, could choose to do something else with their income. If the goal is really to accelerate charitable giving, the last thing Congress should do is handcuff and micromanage givers by overregulating charitable giving accounts. Freedom fosters philanthropy and allows the generosity of Americans to continue to grow and support our charities. We all share the goal of fostering giving. S. 1981 will take us further from that goal.