“Donor Revolt for Charity Reform” Campaign Highlights Strong Demand for Changes to Philanthropy Rules

FOR IMMEDIATE RELEASE

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Washington, D.C. – Over 160 prominent philanthropists and seven national funding and policy organizations are launching a “Donor Revolt for Charity Reform” campaign to call for “common sense charity reforms,” including requirements to boost foundation payouts, increase transparency, and close down abuses of donor-advised funds (DAFs).

Inaugural signers include filmmaker Abigail Disney, Scott Wallace, chair of the Wallace Global Fund and grandson of Henry Wallace, and author and activist Leah Hunt-Hendrix, among other high-profile donors. 

Launched by the Patriotic Millionaires, the Institute for Policy Studies, Inequality.org, Solidaire Action, the Excessive Wealth Disorder Institute, Resource Generation, the #HalfMyDAF Campaign, and the Decolonizing Wealth Project, the “Donor Revolt for Charity Reform” is accompanied by the release of a new report by the Institute for Policy Studies that reveals how Charity Lobby groups spent $11 million opposing common-sense charitable giving reforms. Meanwhile, a recent Ipsos poll commissioned by Inequality.org and The Giving Review shows overwhelming support among Americans across the political spectrum for basic charity reforms.

“Many donors with private foundations and donor-advised funds (DAFs) will be surprised to learn how their national associations are lobbying and spending money to oppose common sense charity reform,” said Chuck Collins, lead organizer of the Donor Revolt for Charity Reform. “The inaugural signers of the Donor Revolt campaign are asking why their national associations and DAF sponsoring organizations are lobbying against basic charity reforms that are supported by their members and by broad public opinion across the political divide.”

• • 167 inaugural signers, all of them high-level donors with either private foundations or donor-advised funds (DAFs), have officially joined forces in a powerful new campaign that strongly demands key charitable giving reform measures. “We must ensure that large charitable gifts don’t languish idly for years in intermediaries, and instead flow to the causes they are intended to support,” the statement reads. “We enthusiastically support reforming our nation’s philanthropic sector to ensure that when funders receive tax breaks for charitable contributions, those contributions actually get to working charities.”

• • In 2022, 41 percent of all individual donations went to private foundations and donor-advised funds (DAFs) — leading to concerns that these intermediaries are warehousing charitable funds.
  • Since 2018, 21 for-profit firms and nonprofit organizations have spent a combined $11 million to lobby against DAF reform. These include DAF sponsors affiliated with investment firms Fidelity, Schwab and Vanguard, and an association of community foundations.
  • Of this amount, $3 million was spent on defeating the ACE Act, a modest charity reform proposal introduced in 2021.

• • Charity reform advocates are also launching a new portal that will officially go live on April 4 – www.stophoarding.org – for non-donors and nonprofit organizations to have the opportunity to add their individual voices in support of key charitable giving reform measures. 

• • There’s surprising, cross-partisan consensus on the current state of charitable giving. Americans across the political spectrum dislike the incentives our tax system provides to wealthy donors, and want to ensure that charitable donations reach actual charities much more quickly, instead of being warehoused in private foundations and donor-advised funds.

“There is a growing appetite for reforming some basic rules governing charity,” said Bella DeVaan, associate director of the Charity Reform Initiative at the Institute for Policy Studies. “As we go public, we anticipate that many more donors will join in their peer group’s advocacy, since they understand how leaving fair practices to chance or voluntary benevolence can harm the reputation of philanthropy writ large. These donors are powerful, especially when they band together — and the general public will be with them.”

“We as taxpayers should not subsidize a donor’s gift unless it moves in a timely way to nonprofit organizations doing the real work of helping our communities to thrive,” said Gabriela Sandoval, executive director of the Excessive Wealth Disorder Institute and sponsor of the Crisis Charitable Commitment. “We should be alarmed when the charity of the excessively-wealthy becomes a taxpayer-subsidized form of private power and influence.”

“I’m a millionaire who strives to do some good with my wealth. As such, I regularly donate to charity each year. But the laws governing philanthropy are being abused by the ultra-wealthy to benefit Wall Street fund managers, ultimately resulting in less money getting to charitable causes,” said Morris Pearl, Chairman of the Patriotic Millionaires. “We stand for the common sense principle that if you receive a tax break for making a charitable donation, those donations should benefit someone other than the donor within a reasonable amount of time, and the minimum payout calculations should not include the salaries paid to the donor’s family.”

 “Our entire nation is suffering from decades of disinvestment in basic civic infrastructure.  It’s time to build a collective voice to tell the story of what’s really needed – more and bigger investments on the ground in local communities,” said Gerry Roll, Founder in Residence, Foundation for Appalachian Kentucky. “We’ve created a system where donor advised funds are simply another transactional part of wealth management.  Let’s stop pretending everything is working just fine and figure out how to make it right.”

Press contacts:

Olivia Alperstein, olivia@ips-dc.org, +1 (202) 704-9011

Chuck Collins, chuck@ips-dc.org 

Bella DeVaan, bella@ips-dc.org 

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