On August 29th, a community forum in San Francisco discussed proposed legislation in California to create more transparency around donor-advised funds (DAFs).

The conversation was between Jan Masaoka (CEO of CalNonprofits), Dan Baldwin (CEO of Community Foundation for Monterey County), and Nageeb Sumar (VP, Private Donor Group, Fidelity Charitable). The purpose was to discuss the pros and cons of CA-AB 1712, a bill that would require DAF sponsors like Baldwin and Sumar’s organizations to file reports revealing the nature of the assets being held in these charitable funds.

Often referred to as “charitable bank accounts,” a donor can make a gift to a DAF sponsor — like their local community foundation or Fidelity Charitable — to open their own fund and then use it to make grants to nonprofits at their leisure.

The original gift and any future ones are fully tax-deductible regardless of how much of that money is ever granted out. The donor gets immediately rewarded while nonprofit programs may not see the benefits for many years to come.

Because of the tax write-off, this manner of giving should be considered “a kind of public investment,” argued Masaoka, “which should include public accountability.”

In a moment of tension between the two pro-DAF speakers, Baldwin commented that people like to have options and “if someone wants to really have a close partner in their philanthropy, as opposed to a more transactional [relationship], then they may gravitate towards a community foundation.”

Sumar, not letting that slide, insisted that “our motto for my team is to move from transactional to transformative giving.”

What I find both fascinating and heartbreaking, however, is that instead of advocating for reform, for a more level playing field that incentivizes transparency, foundations like Baldwin’s have chosen to either stifle it or take no position.

Read the full article about donor-advised funds by Chuck Brown at Medium.