Episode 40: The Great DAF Debate
Fresh Research

Donor-advised funds (DAF) have dominated philanthropy in any number of ways over the past decade, whether it’s increasing charitable contributions, boosting assets, or simply garnering attention within the public square.

That could be why it takes a super sized episode of Fresh Research tackle the topic. This episode diverges from the usual format; instead of one interview there are two interviews, each taking a side on the subject of DAFs and proposed reforms around charitable giving.

Professor Ray Madoff

The first segment features Ray Madoff, co-founder and director of the Boston College Law School Forum on Philanthropy and the Public Good. She’s part of the Initiative to Accelerate Charitable Giving, a coalition of philanthropists, nonprofits and foundations pushing charitable reforms, including new rules around donor-advised funds. Since this episode was recorded, Madoff released a new paper with UC-San Diego Professor James Andreoni titled, Impact of the Rise of Commercial Donor-Advised Funds on the Charitable Landscape, 1991-2019. Among the findings was that even though “more funds are flowing into, and growing in, private foundations and DAFs, there’s no evidence that charities have benefited from this trend.”

Howard Husock

In the second segment, Howard Husock, senior executive fellow at The Philanthropy Roundtable and adjunct fellow at American Enterprise Institute (AEI), talks about some of the shortcomings of the reforms proposed by IACG around DAFs and foundations. AEI hosted a similar discussion between Madoff and Husock during a recent virtual panel. You can find the link to the YouTube video here.

Husock also touches on his recent paper for AEI, Appreciation in donor-advised funds: An analysis of major sponsors {48:55}. The report uses data from the Internal Revenue Service (IRS) for the four largest commercial sponsors managing DAFs to get a sense of the magnitude of their asset appreciation over the past decade. During the discussion, Husock also notes a paper {51:56} by Dan Heist (“Understanding Donor-Advised Funds: How Grants Flow During Recessions,” with Danielle Vance-McMullen), which was the subject of a previous Fresh Research episode in 2019.