Foundations Set Up by the Rich Are Increasingly Using Charity Loophole

By artappraiser on Thu, 10/27/2022 - 8:34pm |

An audit by the California Attorney General shows private foundation giving to donor-advised funds is surging.

In exchange for their funder receiving a tax donation, private foundations are required to put 5% annually to charitable causes. But donors are increasingly using a loophole to avoid doing so: transferring $ from PFs to DAFs instead of working charities.https://t.co/wu13uB5F0E
— John Arnold (@JohnArnoldFndtn) October 27, 2022

URL:

https://www.bloomberg.com/news/articles/2022-10-27/foundations-set-up-by-the-rich-are-increasingly-using-charity-loophole

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DAFs have no distribution requirements (another loophole) so $ can just stay in investment accounts rather than getting into community. These vehicles are meant to serve nonprofits, not investment managers. The ACE Act would fix both issues but DAF sponsors have lobbied against.
— John Arnold (@JohnArnoldFndtn) October 27, 2022

Re the loophole, what’s in it for the donors? They just want to help out their investment managers?
— Gary Wallace (@ChetSucks) October 27, 2022

It lets them spend the money in causes they care about instead of ones that politicians care about.
— Jorge Emrys Landivar (@__TheBaron__) October 27, 2022

Do you think requiring that 5% is useful? Presumably *some* foundations actually think they have better giving opportunities later
— Hungry Cavill (@napoleon_yolo) October 27, 2022

I have much less faith that foundation managers will be more aggressive in giving as more time goes by, particularly after the funder passes on.
— John Arnold (@JohnArnoldFndtn) October 27, 2022

by artappraiser on Thu, 10/27/2022 - 8:38pm

Foundations Set Up by the Rich Are Increasingly Using Charity Loophole

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