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.