3 ms·

One issue mentioned by NYT is using DAFs to "obscure their political activity" since donations don't have to be made public and non-profits don't have to disclo

One issue mentioned by NYT is using DAFs to "obscure their political activity" since donations don't have to be made public and non-profits don't have to disclose donors. Another issue is that the tax savings felt by the donors is tied to the original contribution's valuation and not the valuation at the time the money is used. So in the case of GoPro's Nicholas Woodman, he got a tax break based on $500 mil, but the shares have dropped around 93% so if they're used for charity now it's like he only donated a fraction of that amount. NYT also reports that the fees for some of these DAFs can be significant and so a portion of these donations are going to e.g. Goldman Sachs, Fidelity, and similar firms.

khuey 8y ago
That knife cuts both ways though. If you put $500M in the DAF and then it goes up 10x before you distribute it to charity you don't get to take a $5B deduction.
- Woberto 8y ago
  Maybe you should though. The people receiving the increased donations would probably support that - you did well and increased the value of your donation, so you can be rewarded for that.
  - darawk 8y ago
    The point of the donation is that you've given up control. If I give you 1 share of Facebook, it is now yours to hold or sell. So, you are responsible for any gains or losses on that asset from that point forward, which is why the value at the time of the donation is used.
darawk 8y ago
> One issue mentioned by NYT is using DAFs to "obscure their political activity" since donations don't have to be made public and non-profits don't have to disclose donors. Ya, that part seems legit. But if that's the lede, why not be more explicit about it? > Another issue is that the tax savings felt by the donors is tied to the original contribution's valuation and not the valuation at the time the money is used. So in the case of GoPro's Nicholas Woodman, he got a tax break based on $500 mil, but the shares have dropped around 93% so if they're used for charity now it's like he only donated a fraction of that amount. I'm not sure that's a fair criticism. I think that you should get the tax deduction for the value at the time of donation. Anything else would be pretty crazy. > NYT also reports that the fees for some of these DAFs can be significant and so a portion of these donations are going to e.g. Goldman Sachs, Fidelity, and similar firms. Ya, that's sort of a real issue. But it's not at all specific to DAFs as far as I can tell, and it's not an instance of the "tech billionaires" screwing people over. If anything it's a criticism of these wall street banks.
compsciphd 8y ago
who says it wasn't liquidiated in the context of the DAF and put into a more stable investment? I know when I donated stock to my DAF, it was liquidated and invested in the set of funds that the DAF supports

khuey 8y ago

That knife cuts both ways though. If you put $500M in the DAF and then it goes up 10x before you distribute it to charity you don't get to take a $5B deduction.

Woberto 8y ago
Maybe you should though. The people receiving the increased donations would probably support that - you did well and increased the value of your donation, so you can be rewarded for that.
- darawk 8y ago
  The point of the donation is that you've given up control. If I give you 1 share of Facebook, it is now yours to hold or sell. So, you are responsible for any gains or losses on that asset from that point forward, which is why the value at the time of the donation is used.

darawk 8y ago

> One issue mentioned by NYT is using DAFs to "obscure their political activity" since donations don't have to be made public and non-profits don't have to disclose donors. Ya, that part seems legit. But if that's the lede, why not be more explicit about it? > Another issue is that the tax savings felt by the donors is tied to the original contribution's valuation and not the valuation at the time the money is used. So in the case of GoPro's Nicholas Woodman, he got a tax break based on $500 mil, but the shares have dropped around 93% so if they're used for charity now it's like he only donated a fraction of that amount. I'm not sure that's a fair criticism. I think that you should get the tax deduction for the value at the time of donation. Anything else would be pretty crazy. > NYT also reports that the fees for some of these DAFs can be significant and so a portion of these donations are going to e.g. Goldman Sachs, Fidelity, and similar firms. Ya, that's sort of a real issue. But it's not at all specific to DAFs as far as I can tell, and it's not an instance of the "tech billionaires" screwing people over. If anything it's a criticism of these wall street banks.

compsciphd 8y ago

who says it wasn't liquidiated in the context of the DAF and put into a more stable investment? I know when I donated stock to my DAF, it was liquidated and invested in the set of funds that the DAF supports