How Long Should It Take to Give Away Millions?

The promise of philanthropy was that the wealthy could enjoy tax breaks for their charitable contributions. The pandemic laid bare how accumulation can trump getting money to those in need. A Senate bill aims to change that.

The billionaires, former government officials and academics gathered in a Manhattan conference room to brainstorm solutions to a problem they had all been working on from various angles: how best to update the laws governing philanthropy, most of which were half a century old. Over sandwiches, sketching their ideas out on whiteboards, they discussed donor-advised funds, a kind of financial way station that allows givers to claim all the tax benefits of donations upfront while leaving the money parked with large firms like Fidelity Charitable or Schwab Charitable or with large community foundations like the Silicon Valley Community Foundation. Today, one out of every eight dollars bound for charities in the United States is channeled into a donor-advised fund. The participants wanted, among other reforms, to ensure that money stashed in donor-advised funds, which had already earned those donors significant tax savings, ended up in the hands of working charities more quickly. But there was a general recognition in the room that movement would be slow and incremental, if it happened at all.