The Special Standing of Community Foundations as Sponsors of Donor-Advised Funds

Abstract

Accelerating growth of donor advised funds has attracted vocal advocates and critics whose arguments are fundamentally about definition (the purpose of philanthropy), values (good philanthropy versus bad philanthropy), regulation (government or market), policy (the role and value of tax incentives), and sponsorship (for profit or nonprofit agency). Community foundations assert a special standing as sponsors of donor advised funds (DAF) because of their unique role in communities as anchor institutions whose mission is to serve the interests of their community. The question is, is this role grounds enough to justify and preserve the distinctive value of donor advised funds held by community foundations in their present form?