Chronicle’s Philanthropy 400 Ranking Overlooks DAF Value
On Thursday, October 27, 2016, the Chronicle of Philanthropy released this year’s Philanthropy 400, its annual ranking of American nonprofits based on the private support they raise. The special report acknowledged a record year in giving, and named Fidelity Charitable Gift Fund, the charitable giving arm of Fidelity Investments, the nation’s top charity by contributions received.
Having a sponsor of a donor advised fund (DAF) outraise mainstays like United Way is indeed a notable first and deserving of our attention and reflection. Our sector needs to keep pace with changing donor preferences, especially their motivations and preferred methods for giving.
As such, this year’s Philanthropy 400 is dominated by articles and opinion pieces about DAFs, including those authored by known critics. What’s missing is the voice of community foundations which as you know originated DAFs, the first one being created in 1931, to partner with philanthropists to provide immediate and long-term investment in the communities they serve.
The Council felt it important to respond to this report to ensure the community foundation perspective was known. In response to these and other misguided attacks on the use of Donor Advised Funds, the Council will continue our broad range of efforts to illustrate their benefits and emphasize the critical role they play in encouraging civic engagement.
Just this past June, the Washington Post published an article (“Wall Street is Sitting on Billions Meant for American Charities”) grossly mischaracterizing the value and importance of DAFs as a philanthropic tool. In response, the Council facilitated over 100 community foundations coming together to add their names to a letter outlining how DAFs encourage charitable giving and enable community foundations to address pressing needs at the local level.
And as always, the Council is at the table with policy makers working to ensure that the value of Donor Advised Funds is understood and that the ability to utilize them as a philanthropic vehicle is protected and expanded. Our government relations team is active with both the legislative and executive branches of government. We are working closely with colleagues in the field to encourage Congress to expand the IRA rollover provision to include donor advised funds, either in the upcoming lame duck Congressional session or as part of next year’s comprehensive tax reform. We are also working with the Treasury Department as they consider new regulations that might impact the use of Donor Advised Funds. In that case we are both helping them understand the tremendous benefits of the use of DAFs and the possible unintended consequences of any regulation that they may implement.
We know the simple truth about DAFs: When donors create DAFs at community foundations, they ensure support for nonprofits and leverage the foundation’s expertise, programs, collective giving efforts, and civic leadership to further advance local causes. DAFs provide flexibility, democratize giving, and connect donors to purpose.
We have a shared responsibility to shift the narrative about DAFs by highlighting the positive impact they have on communities like yours. We are looking to you and your peers to share examples of how DAFs have directly benefited your community — and describe how your foundation and community would be impacted without them. There are countless examples across our nation of the enormous immediate and sustained benefits DAFs have provided local communities, many of which we have shared and will continue to share.
These concrete examples of DAFs benefiting communities are powerful tools in the hands of our government relations team to demonstrate to law makers the real life value of philanthropy in their districts and states and to better counter false claims in the media. It’s our job to make sure that your voices are heard. Please email your stories on the impact of Donor Advised Funds to impact@cof.org.
