Page 27 - bon-dia-aruba-20210721

A27
u.s. news Diaranson 21 Juli 2021
Critics take aim at charitable money sitting in donor funds

a fund and have someone else sponsor).Yet without payout of workplace charitable-giv-
manage it. But it’s got to go requirements, supporters ing accounts and low initial
out within a reasonable peri- of the legislation say DAFs minimum contributions.
od of time. Otherwise, it’s an — which hold an estimated Indeed, Fidelity and Schwab
abuse of the tax code.” $142 billion in the United require no initial contribu-
States — have essentially be- tions at all for opening a DAF
The proposed reforms have come warehouses for charita- account, Heisman noted,
opened a rift in philanthropy ble donations. The accounts thereby transforming it into
circles among billionaire do- let donors set up endowed a financial vehicle anyone can
nors, community founda- accounts that exist in perpe- use. Still, the average value of
tions and trade associations tuity and can pass on to their a DAF account — estimated
and have sparked intense heirs. at about $162,000 — shows
lobbying efforts both for and A June report by the Coun- that DAFs remain a vehicle
(AP) - Wealthy philan- among other things, creating against the legislation. cil of Michigan Foundations mainly for the affluent.
thropists have long en- new categories of accounts. showed that 35% of DAFs
joyed an advantageous The debate was ignited when sponsored by Michigan com- The Senate bill was crafted
way to give to charity: Us- One type of account would John Arnold, a Texas-based munity foundations distrib- with guidance from Ray
ing something called a do- give donors an immediate billionaire who made his uted no money in 2020, a Madoff, a Boston College
nor-advised fund, they’ve income tax deduction for fortune in hedge funds and year marked by enormous law professor who, alongside
been able to enjoy tax de- money they agree to give to a now co-chairs Arnold Ven- need because of the viral pan- Arnold, has called for stricter
ductions and investment charity within 15 years. tures, joined with a group of demic. DAF rules. Madoff and a col-
gains on their donations scholars and philanthropies league published a study in
long before they give the The second type would let to propose a set of reforms Today, roughly 1 in 8 chari- May that showed that work-
money away. them delay the distribution under a coalition they called table dollars are estimated to ing charities had lost $300
of their money for 50 years. The Initiative to Accelerate go into DAFs. The New York billion in contributions over
These so-called DAFs set no These donors would get no Charitable Giving. Members Community Trust, a com- a five-year period as more
deadlines for when the do- income tax deduction until of the group met with law- munity foundation, estab- people channeled donations
nations must reach charities; then. But they would still get makers to advocate for the lished the first DAF in 1931. through DAFs and private
the donors themselves decide to enjoy capital gains and es- reforms, which have largely Their use accelerated in the foundations rather than di-
when and where the money tate tax savings for donating been incorporated into the 1990s, when Fidelity Chari- rectly to charities.
goes. stocks or gifts into a DAF. Senate bill. table launched a national
What sparked Arnold’s inter- donor-advised fund program. The Philanthropy Round-
Critics complain that because Community foundation- est, he said, was seeing rich Charitable arms of many fi- table, a conservative-leaning
DAFs provide no financial sponsored DAFs with less people with philanthropic nancial firms, including Van- group that opposes payout
incentive to quickly donate than $1 million would be ex- intent funneling money into guard Charitable and Schwab requirements for DAFs, dis-
the money, much of it ends empt from the requirement. DAFs yet distributing very Charitable, now run robust putes those findings. Its pres-
up sitting indefinitely in the But donors with more than little of it to charities. DAF programs. ident, Elise Westhoff, argues
accounts rather than being $1 million in such accounts that “more mandates and
distributed to needy charities. would qualify for upfront tax Opponents of the bill coun- Community foundations, regulations on giving will just
benefits only if they distrib- ter that tighter restrictions along with universities, hos- make it harder for all Ameri-
That criticism has helped uted at least 5% of their assets on DAFs are unnecessary pitals, faith-based groups and cans to support the causes
drive a Senate bill that would annually or gave their money because the average annual large charities like United they care about.”
tighten the rules for DAFs to a charity within 15 years. payout rates for DAFs hover Way also sponsor DAFs. Col-
and aim to speed donations Under current law, assets can around 20% — much higher lectively, they account for Supporters of the bill, in-
to charities. The bill, intro- remain in a DAF indefinitely, than the 5% minimum re- a 300% growth in DAF ac- cluding William Schambra,
duced by Sens. Angus King, tax-free. quired of private founda- counts over the past 10 years, a philanthropy expert at the
a Maine Independent, and tions. Richard Graber, who according to the National conservative Hudson Insti-
Chuck Grassley, an Iowa “The idea of getting a tax de- leads the conservative Brad- Philanthropic Trust. tute, say much of the push-
Republican, appears to be duction today for money that ley Foundation, calls the back reflects a financial in-
gaining bipartisan support in may not be paid out for 50 legislation “a solution in Eileen Heisman, who leads centive that DAF sponsors
Congress. years makes no sense,” the search of a problem.” (The the philanthropic trust, notes want to preserve: The fees
The bill would make nu- senator added. “I understand foundation is affiliated with the ease of opening a DAF ac- they charge to manage the ac-
merous reforms to DAFs by, you might want to put it into Bradley Impact Fund, a DAF count online, the emergence counts.

Trump inaugural committee head accused of being UAE agent

foreign policy while Trump Aspen, Colorado and Rashid without disclosing their true
was running in 2016 and later Sultan Rashid Al Malik allegiances,” Acting Assistant
while he was president. Alshahhi, 43, of the United Attorney General Mark
Arab Emirates. Lesko said in a release.
Matthew Herrington, an
attorney for Barrack, did not Grimes also was arrested Lesko characterized the
immediately return an email Tuesday in California. A alleged conduct as “nothing
seeking comment. Barrack message for comment was short of a betrayal of those
was due to appear at an initial sent to his attorney. The officials in the United
appearance in federal court in whereabouts of Alshahhi States, including the former
Southern California. weren’t immediately clear. President.”

Barrack was charged with “The defendants repeatedly “Through this indictment,
(AP) — The chair of positions to benefit the conspiracy, obstruction of capitalized on Barrack’s we are putting everyone —
former President Donald United Arab Emirates. justice and making multiple friendships and access regardless of their wealth
Trump’s 2017 inaugural false statements during a to a candidate who was or perceived political
committee was arrested Thomas Joseph Barrack, 74, June 20, 2019 interview with eventually elected President, power — on notice that
Tuesday on charges of Santa Monica, California, federal law enforcement high-ranking campaign the Department of Justice
alleging that he and others was among three men agents. Also charged in a and government officials, will enforce the prohibition
conspired to influence charged in New York federal seven-count indictment in and the American media of this sort of undisclosed
Trump’s foreign policy court with trying to influence Brooklyn federal court were to advance the policy goals foreign influence,” the
Matthew Grimes, 27, of of a foreign government statement said.