“DAF Sponsors Are Not All Created Alike”

From Gerry Roll, writing in the Chronicle of Philanthropy:  

As the founder of the Foundation for Appalachian Kentucky, which serves one of the most persistently poor regions of the nation, I agree that a DAF overhaul is long overdue and that more community foundations like mine need to get behind those efforts. But the focus of such changes should shift from DAFs themselves to the sponsors entrusted to steward them.

There is little difference in how DAFs are structured and how they operate as a philanthropic tool. However, a huge chasm exists between community foundations that use DAFs to shore up civic infrastructure, improve education, and provide economic stability in a particular region, and national or commercial gift fund sponsors that use them as a mechanism to build wealth through the fees they collect to sponsor the accounts.

These differences should be a starting point for any new DAF policy and should inspire more community foundation leaders to fight massive lobbying efforts to halt donor-advised fund legislation. 

Through discussions with experts and advocates pushing for DAF changes, I’ve formulated what I believe is a strong workable alternative to previous legislative efforts, most notably the 2021 Accelerating Charitable Efforts Act. While that legislation would have exempted community foundations with less than $1 million in DAF assets from payout requirements, it came under fire for potentially creating complicated accounting requirements that some community foundation leaders felt would be especially onerous for smaller organizations.

The solution, I believe, is to develop entirely separate policy for community foundations and the DAFs they manage, similar to laws governing community organizations focused on housing and economic development — community housing development organizations and community development financial institutions.

Yep. 

darryll k. jones