December 14, 2018

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By Marlene Simons

For Donors, Fundraisers and Tax-Payers

There are many books, classes, seminars and lunch-time discussions about ethics for fundraisers in dealing with donors. I have seen far fewer discussions about ethical dealing with beneficiaries.

The very first issue that comes to mind is that:
Donors get a full and immediate tax deduction when putting their dollars into donor-advised funds,
But there is no corresponding requirement for those funds to actually be used for a charitable purpose within any kind of time-frame; not a year, not five years, not twenty years.

So, how is this an ethical way to deal with the intended beneficiaries?

The second issue that comes to mind is: How is it that commercial financial institutions can create charities, when they do no charitable work?

And, how is it that the large, for-profit entity of a commercial, financial institution can make money on the money that is supposed to be going to an actual charitable purpose?

As ordinary tax payers, we are paying for the lack of the $110 billion, now, sitting in Donor-Advised Funds. The donors get the benefit of a generous charitable deduction in their taxes. The financial institutions and managers of those funds generate income from those investments.

Nonprofits limp along, people starve, poverty grows, veterans go homeless, children don't get what they need, while funds can sit with no required time-frame, no deadline by which those billions of dollars reach their intended beneficiaries, for which the tax benefit was given.

We have work to do, my friends, a great deal of work!