Giving Compass' Take:

• Martin Levine at Nonprofit Quarterly writes on billionaire philanthropist John Arnold's view on donor-advised funds and why the accumulation of resources in DAFs in charitable foundations is problematic.

• How can funders avoid the temptation to keep money in donor-advised funds indefinitely?

• Read this article on guidance for donors around donor-advised funds. 

A year ago, Nonprofit Quarterly focused its summer edition on the need for greater scrutiny and regulation of donor-advised funds (DAFs). A year later, this concern has found support from an unexpected corner—a former hedge-fund investor and his wife who take their philanthropy very seriously.

Billionaire John Arnold, in a series of 11 tweets, added his voice to those who think the DAF sector needs to change the way it does business if it is to fulfill its philanthropic purpose.

Donor-advised funds have grown rapidly. They provide donors with many of the benefits of a charitable foundation without much of the overhead burden. They allow a donor, as NPQ described, to “get all the tax benefits of a transfer to a public charity [yet] retain functional control over the distribution (and sometimes investment) of the donated funds.” For critics, the way DAF donors and the organizations who manage them exercise this control is problematic.

Read the full article about donor-advised funds by Martin Levine at Nonprofit Quarterly.