They are also not required to disclose how the charitable dollars are spent.
You don't see the problem here? How do we, as taxpayers, know the money is even being spent for real charitable purposes?
See for example this story: https://www.telegraph.co.uk/news/2018/06/14/new-york-attorne...
While you are unable to audit any given donor, you are able to audit most DAF program providers by reading their 990 tax form. Here is an example for Charles Schwab, mentioned in the article. https://www.guidestar.org/profile/31-1640316
Even if the 990 is not publicly published, it is required by the IRS and can be audited.
>See for example this story: https://www.telegraph.co.uk/news/2018/06/14/new-york-attorne....
This is less likely to happen with a DAF program because they are managed by 3rd parties with reputations to protect. A properly ran DAF program will research and vet all grantee organizations prior to making a gift, and can (and will) reject donor grant requests if they are found to violate the law/DAF mission.
i.e., the donor could make an arrangement such as, "I'll direct my DAF to donate $X million to you if you then use that money towards buying $4X worth of services from my company."
How is this any different from a person directly donating $X dollars other than the ability to sit and wait and think about it? Do I get to see what a private citizen donates to directly unless that organization that receives the money discloses who donated how much?
You have to disclose the recipient of the donation to IRS. That's the difference. These "Donor Advised Funds" apparently don't have to report disbursements.
> And because organizations that manage D.A.F.s are not required to report which funds give money to which causes, it is impossible to know how much money individual donors are giving away to nonprofit organizations.
That doesn't mean the donor advised fund isn't required to report the givings the fund makes, it means it isn't required to report who gave to whom.
I would be shocked if the DAF managers aren't required to report spending/giving, because they are also 501c3 themselves.
From the title I was expecting the article to be more nefarious, like "donating" to a charity that pays obscene salaries to friends & family for cushy jobs or something.
From the parent commenter:
> And further, this article is basically calling out a person in particular for putting $500M into a fund for the purpose of philanthropy (sooner or later) and then not having made enough donations (it would better if he had to donate 5%/year -- again, why?).
From the article:
> But four years on, there is almost no trace of the Woodman Foundation, or that $500 million. The foundation has no website and has not listed its areas of focus, and it is not known what — if any — significant grants it has made to nonprofits...If the benefit to the needy is difficult to see, the benefit to Mr. Woodman is clear. After GoPro’s initial public offering, he faced an enormous tax bill in 2014. But by donating via the Silicon Valley Community Foundation, he eased his tax burden in two ways. First, Mr. Woodman avoided paying capital gains taxes on that $500 million worth of stock, a figure that most likely would have been in the tens of millions of dollars. He was also able to claim a charitable deduction that most likely saved millions of dollars more, and probably reduced his personal tax bill for years to come.
The parent commenter goes on to sum up the article as thus:
> Evidently people are so angry at successful people at this point, they are [now] going after their charity too, again not clear on why.
The article asserts early on that the problem is lack of transparency:
> Mr. Woodman achieved this enticing combination of tax efficiency and secrecy by using a donor-advised fund — a sort of charitable checking account with serious tax benefits and little or no accountability...So while donors enjoy immediate tax benefits, charities can wait for funds indefinitely, and maybe forever.
Why is the time lag such a cause for concern? Say I donate money towards an effort that takes 10 years to get tangible results, so what?
If there's some shady behavior later to try to illegally claw back charity donations, then sure, that's messed up. But just delaying it N years? So? It still goes to charity at the end.
By the same logic, do people get super upset when someone doesn't donate to charity during their life and instead just donated the vast majority of their estate on death? It has nearly the same effect.
Maybe people do get upset about that, I dunno.
And transparency is vital. Any time there are dark corners, people find a way to fester in them. See every society, ever.
Finally, there's really just a degree of gided-age wealth-fatigue. You have to expect it at a certain point - humans are exquisitely attuned to status differences; it is just how they're wired.
It's not a cause for concern. It just makes for nice clickbait headlines, and stories full of innuendo with zero proof of actual wrongdoing. In this case, they don't even really make a clear accusation of wrongdoing. This way, they won't get sued over this drivel, but they will get clicks, and those clicks will cause ad impressions.
"...[Mr. Woodman] was giving away much of that wealth — some $500 million worth of GoPro stock — to the Silicon Valley Community Foundation...Mr. Woodman avoided paying capital gains taxes on that $500 million worth of stock, a figure that most likely would have been in the tens of millions of dollars..."
Of course he avoided capital gains on the stock he gave away - he couldn't sell it anymore because it was no longer his. The entire section about Nick Woodman strives to imply that something improper has occurred, but all I see is a successful entrepreneur that gave away a large part of his fortune. Regardless of how long it takes for that money to be distributed by the charitable fund, the money is forever no longer his.
So yes, in this case, it didn't work out for the general public. That indicates no intention of wrongdoing, nor does it indicate that the system is broken. Equity values on the whole tend to rise over time, which means that charitable stock gifts overall (especially those that are held for long periods of time) are actually better for the public than cash donations.
It's not about wanting the stock to do poorly; as the chief executive, he knows where he plans to go with the company, and if he doesn't see it going far, then at least he can save some money. The fact that investors interpreted the move this way indicates that it's not about hindsight, but a poor forecast.
Your point about values rising on average is a good one though - it means that though some of the rich may be getting away with more money, overall donations are still going to balance that. There are still some other issues though.
Investors appear not to have interpreted it that way. That interpretation was disingenuously rendered by this article’s author in support of his premise for it. See [1].
Of course the main reason for that is other parts of the tax code, not DAFs. But I think DAFs get targeted for criticism because they make it a lot easier to exploit these kinds of flaws.
I'm not entirely sure you can, based on my reading of 26 CFR 1.170A-1(c)(3) [1]:
> (3) If a donor makes a charitable contribution of property, such as stock in trade, at a time when he could not reasonably have been expected to realize its usual selling price, the value of the gift is not the usual selling price but is the amount for which the quantity of property contributed would have been sold by the donor at the time of the contribution.
Because "successful" people are laughably just capitalists whose only success is extracting wealth from people who actually work for a living. Capitalism isn't a system that benefits the vast majority of people and being a "successful" capitalist is bad for our planet and society.
This is the Labor Theory of Value, which is regularly debunked. Capitalists create value, they don't take it from others. (You can see this on the balance sheet - the business is worth more than its "book value".)
> Capitalism isn't a system that benefits the vast majority of people
The vast majority of immigrants arrived in the US with little more than a suitcase, yet capitalism made them wealthy.
> bad for our planet and society
Non-capitalist societies are far more destructive to the planet.
2. I'm not interested in myths. Look up statistics on immigrant poverty under capitalism and let me know whether you'd like to continue this line of reasoning.
3. Some, yes. All? Of course not.
It absolutely does, because it decides where to allocate scarce resources.
I can't think of any. Do you have any examples?