I'm tossing more shade on the Donor Advised Fund

And after reading this Institute of Policy Studies report, you might too.

The Institute of Policy Studies just became my favorite organization of all time, even though I just found out about them earlier today.

That’s because they just released a massive study of Donor Advised Funds titled “Time to Move the Money” and an accompanying paper titled, “Warehousing Wealth: Donor-Advised Charity Funds Sequestering Billions in the Face of Growing Inequality”.

And reading it turned me into the fundraising equivalent of the Kool-Aid man.

Oh Yeah! The Institute of Policy Studies has me at full Kool-Aid Man.

Here are some of the report’s highlights and my comments (in parentheses):

• DAFs are now the fastest-growing recipients of charitable giving in the U.S. (This despite the fact that our social needs are greater than ever, and there’s no shortage of information about worthy 501c3s from places like Giving Compass, Charity Navigator, Charity Watch, GiveWell and something called "GOOGLE”)

  

  Maybe try this before calling Fidelity Charitable?

• The share of total U.S. individual charitable giving that is going to DAFs, rather than to direct charities, has nearly doubled over the past seven years—from 4.4 percent in 2010 to 8.3 percent in 2016. (No wonder raising money is harder than ever)

• In 2016, for the first time ever, a DAF—Fidelity Charitable—was the top single recipient of charitable giving in the U.S. In 2017, six of the top 10 recipients of charitable giving were DAFs. (Uh, say what now? The largest recipient of charitable gifts was….Fidelity. Uh, Abigail Johnson has a Net Worth of more than $22B. Question: Do you think this person needs more fee-producin’ assets under management? Answer: No. No she does not.)

  

• The average DAF donor is a member of the wealthiest one-tenth of one percent of U.S. Americans, with an annual income over $1 million. (Attention fundraising professionals: If you don’t talk with your prospects about their DAF, and challenge their thinking on the use of a DAF, you’re leaving serious money on the table)

So if you have time today, or tomorrow, or anytime in the next week or so, read this outstanding takedown of the Donor Advised Fund. The punch line from the report’s executive summary states unequivocally that they have documented “…the dramatic expansion of DAFs and the risks an unregulated DAF system poses to the public interest and the charitable sector.

Yes. And it’s time that we do something about it.