Stop Hoarding Charity Dollars
The richest Americans are diverting money away from crucial community nonprofits like food banks, health centers, and after school programs, and getting huge tax breaks for it. We can fix this — if we change the rules.
WHAT’S WRONG — AND HOW WE CAN FIX IT
Times are tough right now.
Staying afloat in our stunningly unequal country is challenging for millions upon millions of Americans. Charities like food banks and health centers are doing their best to help people in need, but they’re straining and underfunded too.
The rich don't donate the same way the rest of us do.
When we see our friends and neighbors struggling, Americans lend a hand, because it's the right thing to do. We write a check or click on “donate here” without expecting a big tax benefit in return.But millionaires and billionaires give differently. Instead of giving directly to nonprofits doing the work, the wealthiest Americans use go-between funds. They can hoard donations for years before they ever reach communities in need.
They hoard their money in private foundations and donor-advised funds (DAFs).
The wealthy can lock up those donations for years or decades, while getting big tax breaks up front, subsidized by the rest of us. The wealthier the donor, the larger the tax break.Since 2008, donations to these go-betweens have doubled, while giving to working charities has flat-lined. In 2022 alone, the wealthy used them to divert $130 billion.
We can change the rules and get money flowing faster to food banks, health centers, and other charities.
Let's change the rules for DAFs and private foundations to require that money earmarked for charity actually reaches charities.To these wealthy donors, our message is simple: You got a tax break! Now, move the money into our communities!
Our Demands
Make the wealthy play by the same rules as the rest of us:
Limit tax deductions for the wealthy, and make a charitable tax credit available to anyone who pays taxes, including non-itemizers
Fix the rules for donor-advised funds:
Require DAFs to pay out funds within 5 years of receipt
Require greater transparency for DAFs
Change the tax benefits for DAFs to match those of private foundations
Fix the rules for private foundations:
Increase annual payout from 5 percent to 10 percent
Cap management expenses that count towards payout, and exclude compensation to family members from payout calculations
Exclude private foundation grants to DAFs from counting towards payout
WHAT supporters ARE SAYING
Are you a donor with a DAF or private foundation? Add your name to the Donor Revolt for Charity Reform!
ABOUT US
Stop Hoarding Charity Dollars is a campaign initiated by Inequality.org, a project of the Institute for Policy Studies.Learn more about us at our website, Inequality.org.
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