[Note: This post was published as an op-ed in the Chronicle of Philanthropy on October 28, 2014.]
Each fall the Chronicle of Philanthropy publishes its “Philanthropy 400,” a list of the nonprofit organizations that raised the most money in the previous year. Last week’s publication of the 2014 Philanthropy 400 created a stir by sadly confirming what many of us have feared for the last several years: an inexorable takeover of the charitable sector by Wall Street.
Three of the top 10 fundraising organizations on the list are donor-advised funds (DAFs) affiliated with financial firms: Fidelity (No. 2), Schwab (No. 4), and Vanguard (No.10). A fourth organization in the top 10, the Silicon Valley Community Foundation, is also primarily a sponsor of donor-advised funds. Money is flowing into advised funds, rather than to nonprofits that provide actual services. This accelerating trend of warehousing philanthropic dollars is a deeply troubling trend for American philanthropy. Continue reading