Kudos: Minneapolis Foundation Encourages DAF Payouts
Innovative campaign recognizes challenge/opportunity of protracted account balances
“GIVING PARALYSIS IS REAL” is the lead message in an April 2025 campaign by the Minneapolis Foundation through advertisements in the state’s largest newspaper. Another reality? “So is the $250 billion sitting in donor advised funds – – and nothing spent,” is the follow-on message to holders of DAF’s from an entity that itself sponsor of 981 DAFs holding $600 million.
“There’s roughly $250 billion in philanthropic capital held in Donor Advised Funds (called “DAFs”) that isn’t getting to communities fast enough. We want to change that.” – Minneapolis Foundation
The Minneapolis Foundation actively promotes its regional community connections as a comparative advantage donors “won’t find at commercial DAF providers,” and encourages donors to talk to an advisor about opening or transferring a DAF to the foundation.
The campaign follows by several months a Minnesota StarTribune business column by Evan Ramstad Donor-advised funds are growing. But if you have one, you should shrink it. https://www.startribune.com/ramstad-donor-advised-funds-are-growing-but-if-you-have-one-you-should-shrink-it/601211138 “The point of a DAF is to put money in the hands of charities, not grow it like another investment account.”
In the article that also cites the Philanthropy Project, Ramstad observes that ”Asset-management firms and some foundations, who treat the money in DAFs as akin to assets under management, have resisted regulatory changes. But it’s not right for people to have been given a charitable tax break on money that hasn’t actually gone to a charity.”
While the ongoing market competition between community foundations and commercial DAF sponsors has been a relatively low-key affair for years, so hopefully these developments will promote a fuller public conversation about how (and where) these charitable accounts are being managed.
Kudos to the Minneapolis Foundation for responsibly and forthrightly addressing the DAF challenge, and then providing valuable counsel to its donors.
Countering DOGE Overreach — DC AG urged to secure charitable assets of Institute for Peace Endowment
Peaceful Cherry Blossom Festival walk soured by security guards’ No Trespassing edict
On April 2 I was glad to be in DC for a nonprofit meeting, and my spouse Deb and I were on our way back from the Cherry Blossom Festival. After the Lincoln Memorial we wanted to see the former home of the United States Institute for Peace (USIP). (We knew that the Institute’s building had been closed by a presidential executive order, and that Elon musk’s DOGE team had shown up on March 17 with FBI agents, and for some reason the DC police, who picked the locks and evicted the staff.)
As we walked in front of the impressive domed Institute building, Deb and I could see a sign on the entrance doors to the left. There was no other indication of what was going on. When we got closer it said, NO TRESPASSING, a security guard popped out and firmly told us we had to leave immediately — this was private property! Deb and I were both taken aback because this seemed odd and out of character for most interactions in the capital Mall area. We had a brief conversation, said why we were interested, but no, the guard couldn’t say anything about who owns the building or what it was for, and we had to leave right away.
The Institute of Peace is/was a Congressionally chartered entity under legislation signed by Pres. Ronald Reagan, funded by Congress, with its Board of Directors appointed by the president along with secretaries of State, Defense, and president of the National Defense University. President Trump used this authority to terminate the board, and fire its 300 staff. USIP leadership is actively contesting the legality of these moves in federal court, citing the agency's independent structure, but facing a slow process. (Link to USIP leadership lawsuit: https://storage.courtlistener.com/recap/gov.uscourts.dcd.279421/gov.uscourts.dcd.279421.1.0.pdf)
As I stated in my complaint with the AG’s office (case number 00074146) for the charitable nonprofit USIP Endowment, this action does not automatically authorize transfer of the Endowment’s assets to the control of DOGE. DC Law § 44–1635. Release or modification of restrictions on management, investment, or purpose (based on the Uniform Prudent Management of Institutional Funds Act (UPMIFA) of 2007) requires “notify(ing) the Attorney General for the District of Columbia of the application, and the Attorney General for the District of Columbia shall be given an opportunity to be heard.” UMIFA and common law give the attorney general standing to protect the public’s charitable assets, and to advocate for their preservation for their proper charitable purposes.
While the administration and Congress exercise broad authority over federal agencies (and now are exercising that power to the max), there also exists a broad array of parallel charitable campaigns and contributions for U.S. parks, arts and culture, children’s services, scientific research, religious activity and more, over which government should not seize control or ownership. The donors to these causes (including the USIP Endowment), should be able to count on their lawful voluntary contributions being used for what the donors intended.
A healthy democracy benefits from an independent nonprofit sector, not under the foot of government, where people can choose which organizations they want to support, and can trust that their donations won’t be seized when out of favor. We count on each of the state attorney’s general, and an independent judiciary, as well as a properly limited executive branch, to make that true. Allowing plain citizens to pool their resources is an essential element of freedom of association, our right to join together, and defending that is worth the eternal vigilance required.
Case in Point: Pittsburgh Foundation struggles with purpose of DAFs
Community foundations are second only to commercial DAF sponsors in their hosting of DAF accounts, and are presented as a more accessible, better-informed alternative to the national DAF sponsors. Local experiences vary, of course, but the following presents a local perspective that comes to us from GrantAdvisor.org, a free, anonymous review site similar to Yelp or TripAdvisor, which collects feedback about foundations, including DAF sponsors. (3,450 reviews on 943 foundations as of January 2025)
From a Pennsylvania area current or former grantee (12-29-2024)
How successfully do you think this funder is accomplishing its current philanthropic goals?
This funder spends far more time and effort on courting donors and, like most DAFs, very little effort on helping them make grants. In a region with housing issues, homeless/mental health issues, and youth violence, they sit on assets of $1.5 billion (with a "B"); they spend $83 million on themselves (operating expenses); they spend $3 million just on "investment fees," with no transparency on how their investments are helping or hurting the region. They are single handedly sucking a large hole in the ability of the Pittsburgh region to redistribute resources to where they are needed.
What advice would you give to a colleague? (Imagine a trusted nonprofit colleague is thinking of approaching this funder. S/he asks what you think they should know as they start their quest.)
Find the DAF donor on your own and then contact the program officer to let them know you will be applying with the donor in mind.
Which state are you working in?
Pennsylvania
What is your relationship with the funder for this experience?
Current or former grantee
How many hours did the grant application process take?
24
If you were funded, tell us the outcome
Funded for lesser amount
What year was this experience?
2024
How would you rate this funder's accessibility?
Average. They are accessible, but don't always have much authority.
Tell us one thing that this funder does really well
Help families talk about charitable giving as a group; help people avoid paying their federal taxes.
If you had one piece of advice to give to this funder (about grantmaking or anything else), what would it be?
Flip your model to spend less effort soliciting donations and more effort guiding donors and/or the community in ways that elevate priority needs and put the steps in place to address them.
How was your relationship overall with the funder?
Bureaucratic
NOTE FROM PP: This is one fundraiser’s experience, and we’d like to hear more, such as contrary examples of community foundations making accessible connections among DAF donors and community organizations.