Donor-Advised Funds Are Already Simple And Fair

To the Editor:

Craig Kennedy’s op-ed “4 Ways to Make Donor-Advised Funds Simpler and Fairer” (November 3) unfairly presupposes that DAFs need improving. He tips his hand early by writing about “DAFs’ worst sins,” and then not giving a single concrete example. The essay is chock-a-block with red herrings and hypotheticals.

Kennedy and many other DAF critics base much of their concern on the boneheaded notion of “warehousing” — the act of taking an immediate tax deduction for philanthropic assets that may never be spent.

Why on earth would anybody do that?

Let’s say I’m in the 30 percent tax bracket. I give $1 million to a donor-advised fund. I get a $300,000 charitable tax deduction, true, but I’m also out $700,000. That’s money that I can’t have back, money my children can’t inherit, money that may be spent only for charitable purposes.

Let’s be clear on this: Not one of the million-plus donor-advised funds was created to take advantage of the charitable tax deduction for the simple reason that there is no advantage.

Jack Shakely
President Emeritus
California Community Foundation