Let’s Make This A Season Of Giving–Not Hoarding

By Chuck Collins\Bella DeVaan For as long as we can remember, the end of the calendar year has marked the start of America’s giving season. The holidays that light up our darkest months also invite us to celebrate (and practice!) generosity. Food banks, youth groups, arts and civic organizations, and community service programs heavily depend on the support they receive in November and December. Year-end giving is big for tax purposes, but many people donate without regard to whether they’ll get a deduction. In fact, fewer than 10 percent of donors claim a tax deduction for charitable giving. The super-wealthy, who& do& take advantage of itemizing their tax returns, give differently. They give more to large hospitals and universities, where you can get your name on a building. That kind of giving can be valuable too. But a less visible difference is crucial to recognize. Increasingly, wealthy donors are parking money in entities they control, like private foundations and donor advised funds (DAFs). These intermediaries then, in theory, donate money to working charities. But private foundations are only required to “payout” 5 percent of their assets a year to these other charities. And DAFs have no requirement to payout& at...