How to Rescue Your Charitable Donations from Philanthropic Purgatory

Nonprofit and Tax-Exempt Organizations attorney Andrew Grumet was quoted in a Straight Arrow News (SAN) article about the uptick in use of donor-advised funds (DAFs) and the complications it has presented for charitable giving. The article reported that more people are turning to DAFs to realize immediate tax write-offs, with the requirement that money put into a DAF account be directed to qualified nonprofits. However, because donors can decide when and how to distribute the gifts, organizations cannot count on a consistent giving schedule, leading some in the philanthropic sector to set standards for how and when to direct the money so organizations could more quickly access needed funds. Data from the DAF Research Collaborative indicates these efforts are paying off, with 25.3 percent of funds in DAF accounts given away in 2024 – an increase in 19 percent from the year prior. Mr. Grumet commented that formalizing regulations such as mandatory payout amounts to hold DAFs to the same rules as foundations could result in smaller payouts and reverse the current trend.

READ: How to Rescue Your Charitable Donations from Philanthropic Purgatory