For nearly a hundred years, private foundations have been the big guns of warehouse-style philanthropy, raking in billions from their high-rolling founders and doling out grants piecemeal to grateful nonprofits.
But over the past two decades, donor-advised funds, particularly those affiliated with for-profit financial institutions (such as Fidelity, Goldman and Schwab), have been rapidly and relentlessly eating into the charitable giving pie. Rising like monsters from the deep, DAFs have finally caught up with foundations as the wealthy donor’s charitable warehousing vehicle of choice — and are poised to eclipse them in just a matter of years.
It was already hard enough for working charities to compete with foundations for the largess of wealthy donors. The meteoric rise of enormous monster DAFs spells even more trouble for our operating nonprofits — and the public that relies on them.