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.
