About the Philanthropy Project
Charitable funds should benefit the public
The Philanthropy Project was formed as a national network in 2024 to mobilize nonprofit influence on the critical and beneficial role regulation and public accountability have for American philanthropy.
We recognize that Philanthropy in the U.S. has generous roots and purposes, but is vulnerable to forces of self-interest, secrecy, bias, and excessive accumulation. We see a serious standstill regarding transparency and accountability for the $1.5 trillion dollars in tax-exempt funds currently held by foundations and donor-advised funds. We believe that appropriate government regulation of tax-favored charitable entities requires public inspection and periodic updating to make public disclosure, restrictions on self-dealing, timely payout, and community access truly effective.
At the same time, the financial services industry has grown to exert a powerful influence over the regulation and reporting of these funds. We believe expectations for federal and state law, and the role of state attorneys general, need to be updated and enforced.
To begin with, the Project’s policy efforts will focus in four areas:
- Adjust the timing of the tax deduction for transfers to donor-advised funds to be aligned with when the funds are in active charitable use. This is the simplest and most direct solution, which is to reverse IRS policy by sunsetting the recognition of deductibility for contributions to DAF sponsor accounts until they are transferred to actual working charities.
- Restrict private foundation-to-DAF transfers from counting towards the 5% payout and extending requirements to report destinations and uses of funds.
- Close loopholes in the definition of what gets included as qualified distributions to meet payout requirements by private foundations, and narrow focus to grants and allocations for charitable purposes.
- Tighten transparency requirements for philanthropy and financial services to philanthropy, and enforce reporting compliance — uses of funds, intermediaries, payments to financial advisors, joint ventures, effective control.
The Philanthropy Project’s overall approach is to deepen awareness and public discussion of these issues by serving as a community clearinghouse of current events, opinion, and research on philanthropic reform subjects. Our goal is to build and strengthen a constituency driving reform of philanthropy from the perspective and experience of organizations most directly affected by its actions.
The Project’s website will serve as a primary source of advocacy, connection, and educational tools/archives. The site’s content will span a range of topics for both beginners and those knowledgeable in the field, particularly the legal and regulatory aspects of philanthropic reform.
A key agenda item of the Project is long-term base building, preparing supporters for times when legislative processes are more open to regulatory improvement. The Philanthropy Project will bring together a group of subscribers to track developments, recognize patterns, and build awareness and influence over time.
To maintain our policy focus, we acknowledge there will be important matters the Project will not take up, including the general value of philanthropy, individual giving practices, fundraising effectiveness, reviews of specific charities, guides to foundation practices, or developing voluntary campaigns or commitments to giving practices.
Also please see the roster of Working Group members here.
To begin with, the Project’s policy efforts will focus in four areas:
A.
Postpone the immediate tax deduction for transfers to Donor-Advised Funds until the funds are in active charitable use. This is the simplest and most direct solution, which is to reverse IRS policy by sunsetting the recognition of deductibility for contributions to DAF sponsor accounts until they are transferred to actual working charities.
B.
Prohibit private foundation to DAF transfers, which avoid 5% payout and requirements to report destinations and uses of funds.
C.
Clean up the definition of what gets included as qualified distributions to meet payout requirements by private foundations, and narrow focus to grants and allocations for charitable purposes.
D.
Tighten transparency requirements for philanthropy, and enforce reporting compliance — uses of funds, intermediaries, payments to financial advisors, joint ventures, effective control.
The Philanthropy Project’s overall approach is to deepen awareness and public discussion of these issues by serving as a community clearinghouse of current events, opinion, and research on philanthropic reform subjects. Our goal is to build and strengthen a constituency driving reform of philanthropy from the perspective and experience of organizations most directly affected by its actions.
The Project’s website will serve as a primary source of advocacy, connection, and educational tools/archives. The site’s content will span a range of topics for both beginners and those knowledgeable in the field, particularly the legal and regulatory aspects of philanthropic reform.
A key agenda item of the Project is long-term base building, preparing supporters for times when legislative processes are more open to regulatory improvement. The Philanthropy Project will bring together a group of subscribers to track developments, recognize patterns, and build awareness and influence over time.
To maintain our policy focus, we acknowledge there will be important matters the Project will not take up, including the general value of philanthropy, individual giving practices, fundraising effectiveness, reviews of specific charities, guides to foundation practices, or developing voluntary campaigns or commitments to giving practices.
More About the Philanthropy Project
What are the goals of the Philanthropy Project?
The Philanthropy Project seeks increased accountability and transparency for the $1.5 trillion held by charitable intermediaries and already granted incentives in the form of income tax deductions. An unnecessary amount of these funds remains in investment accounts instead of being put to active use improving our communities. The Philanthropy Project supports strengthening current laws that regulate charitable tax exemptions and management of charitable trusts, described more specifically elsewhere on this site.
To accomplish this the Project places a high priority on educating the general public and people in the nonprofit sector about the connection between policy and effective use of charitable funds.
What types of information will the Philanthropy Project be hosting and sorting?
We want to shine a light on a broad set of developments and activities that have a bearing on the effective use of charitable funds in the U.S. You will get a sense of the range of subjects from various parts of this website, and we will pay close attention to the feedback we receive and ideas for what else needs to be part of this mix. In any case, you can expect updates and analyses of legislation, regulatory actions, regulatory inactions, and descriptions of how all this is playing out in real life.
Who will be involved in the Philanthropy Project? Who is behind the Philanthropy Project?
The work of the Philanthropy Project is informed by a growing working group of people who care about bringing billions of dollars in U.S. philanthropy to open, honest, and effective support of the public good. We are a creative mix of thinkers and doers, with nonprofit leaders, law professors, researchers, community activists, donors, and more.
We are pleased to welcome a wide variety of people who care about nonprofit organizations and their role in serving the public and improving the quality of life. We know that this is not what a lot of people think about during their daily lives, so we acknowledge that we are especially involving people who have developed direct knowledge of how this part of the American economy is both contributing and could be improved.
You can see the list of our working group members elsewhere on this site, and we will be constantly recruiting and welcoming people who share our interest in philanthropy reform.
Are contributions to the Philanthropy Project tax deductible?
Yes. The Philanthropy Project is sponsored by Community Initiatives of Oakland, CA, and is eligible for tax-deductible contributions for its charitable exempt activity within Philanthropy, Voluntarism & Grantmaking Organizations.
What other organizations are working on Philanthropy regulation issues?
There are a variety of organizations and associations that weigh in on proposed regulations or regulation of foundations and donor-advised funds. As you can imagine, their positions run the gamut from strong support for more effective regulation, active defense of the status quo, to lobbying for dilution of current requirements.
Each of these organizations issues position papers, conferences, and reports, and between them there is a substantial volume of potentially useful, if conflicting, information.
Organizations lining up on the side for more active regulation include the Institute for Policy Studies, the Philanthropy Project,
Organizations tending to oppose changes in regulation include foundation associations including the Council on Foundations, Philanthropy Roundtable,
In the middle, on the sidelines, might be a larger group of infrastructure groups and public officials who are not yet taking this up, including most of the offices of state Atty. Gen., national nonprofit associations, and fundraiser groups.
Nonetheless, we think there is real potential for more people to weigh in on these issues as they learn more about what is at stake
What strategies will the Philanthropy Project use to affect public policy change?
We believe an educated public, and an educated nonprofit sector, is the best strategy to change a regulatory system that is not working. We plan to shine a light on the flows of money, the regulatory loopholes and potential reforms.
What is the role of GrantAdvisor.org?
GrantAdvisor.org is a free, anonymous review site similar to Yelp or TripAdvisor, which collects feedback about foundations, including DAF sponsors. GrantAdvisor was launched by three nonprofit organizations in 2019: the California Association of Nonprofits, Great Nonprofits, and the Minnesota Council of Nonprofits.
Analysis of thousands of GrantAdvisor reviews helped identify the top issues facing nonprofit organizations seeking support from institutional grantmakers and led to the Fix the Form campaign blog.grantadvisor.org/fixtheform/.
GrantAdvisor currently (12/2024) contains 3,450 reviews on 943 foundations, asking reviewers to respond to the following questions:
- Which state are you working in?
- Which funder are you reviewing?
- What is your relationship with the funder for this experience?
- How many hours did the grant application process take?
- If you were funded, tell us the outcome
- What year was this experience?
- How would you rate this funder’s accessibility?
- How successfully do you think this funder is accomplishing its current philanthropic goals?
- Tell us one thing that this funder does really well
- If you had one piece of advice to give to this funder (about grantmaking or anything else), what would it be?
- How was your relationship overall with the funder? (multiple choice)
- Is there anything else that’d be useful for others to know to understand this funder?
- Last question! The purpose of this website is to foster more successful philanthropy. How can we make GrantAdvisor™ better for you, funders, and the field?