Last week I participated in a terrific debate about donor-advised funds with my good friend Stuart Comstock-Gay, the president of the Vermont Community Foundation. (Thank you, Planned Giving Council of New Hampshire and Vermont, for inviting us!)
Stu and I found a lot of common ground, as well as several areas where we cordially agreed to disagree. Stu made the case for donor-advised funds, saying that their flexibility and low entry point encourage charitable giving and democratize philanthropy — private foundations for the average person. He also emphasized their efficiency. I brought out my concerns (familiar to readers of this column) that donor-advised funds were attracting money that otherwise would be going to actual charities. I also pointed out that money goes into donor-advised funds more readily than it comes out, and I described the unethical financial incentives that are driving the growth at commercial gift funds such as Fidelity.
In preparing for the debate I came up with some numbers that I think illustrate the challenges posed by donor-advised funds. (Because we were meeting right across the river from Dartmouth College, by far the largest fundraising operation in Northern New England, I make references to Dartmouth in a few places.)