Jack's Journal - January 2022
Wall Street Journal – Cancel Culture Targets Charity
A threat to Donor Advised Funds?
Director of Nonprofit Education & Consulting
A sacrosanct principle underlying the American nonprofit sector is that donors have a right to their private property — including the right to donate as much of it as they want to charitable purposes and organizations they support. This property right works in tandem with the First Amendment’s right to associate – to form new nonprofit associations and organizations dedicated to public charitable causes the donors support.
In this vein, one of the most popular “giving vehicles” available to donors is what is referred to as a Donor Advised Fund – or DAF. Rather than make a current donation to a charity, or creating a new charity, donors can establish a DAF into which contributions are made, with the donors then having the discretion to direct contributions from the DAF at such future time as they desire.
Donor Advised Funds were traditionally created by community foundations as a vehicle to encourage members of the community to give. The community foundation is responsible for investing the money in the DAF — and for making distributions when and as the donor intends in accordance with the tax law.
Approximately 20 years ago commercial financial institutions created charitable entities of their own to sponsor and hold DAFs — and they are alternatives to the traditional community foundation model.
A case in point is Fidelity Charitable (a member of the Fidelity Fund group) and the DAF’s under its umbrella — which are the subject of a January 18th Wall Street Journal editorial entitled Cancel Culture Targets Charity.
Simply said, the editorial describes an attempt by a loose coalition of progressive advocacy nonprofits (calling themselves Unmasking Fidelity) to stick their fingers in the middle of the Fidelity DAF system to intimidate and coerce Fidelity into disclosing where its DAF funding is directed — and with the specific purpose of identifying how much has been distributed to nonprofit organizations with which the progressive coalition is at odds ideologically and politically.
The TANGO Nonprofit Method (our textbook and teachings) are built upon the wonderful and enduring principles that define our nonprofit sector – such as donor intent and donor privacy – and DAFs. Anyone with a stake in the nonprofit sector and/or the DAF model should be aware of what is happening to Fidelity and should disclose and resist outside attempts (either from the left or from the right) to inject our current political agonies into the DAF model.
The WSJ article can be found on the Wall Street Journal website (WSJ.com) and elsewhere on the internet.
I love summer time and hope you had an opportunity to take a break and enjoy some time with family and friends. The older I get the faster time seems to fly by and I find it hard to believe that Fall is upon us.
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