#TBT Donor Advised Funds Are Still A Bad Thing

I wish I could say Donor Advised Funds are less of a problem now than they were several years ago, but the reality is they are much worse. H/T to Joe Patti for pointing out the article from inequitable.org by Chuck Collins and Helen Flannery that reports Donor Advised Funds are now the largest cumulative recipients of Charitable Gifts.

I wrote something about why Donor Advised Funds are bad for the entire nonprofit sector back in 2018 and I highly recommend reading an article by Alana Semuels in The Atlantic from the same year. Sadly, the damage caused by these funds has only accelerated.

Be sure to check out the time lapse illustration that begins in 1990 and shows how much money these funds are locking up. It’s tough to miss that 2016 seems to be the year where they move into dominant positions.

While there are some Donor Advised Funds doing good work, they are a small exception to the rule and given that these funds are exempt from the small minimum disbursement requirements regular public charities, they can sit on all of their resources while large donors receive the same tax benefits as if they donated to charities that actually use the money for mission driven activity.

Lack Of Inclusion Reaches All The Way Up To Big Money Donors

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

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