A California lawsuit is turning the spotlight once again towards donor-advised funds (or DAFs), the charitable vehicle that has in recent years taken the philanthropic sector by storm. Both the massive rise of donor-advised funds and the worrisome issues they present for donors and charities alike have been covered here before. Lingering questions concerning the legal standing of donors—and the propriety of treating commercial DAFs as public charities—feature prominently in the case of Emily and Malcolm Fairbairn vs. Fidelity Charitable, with potentially significant implications.

In the pending lawsuit, Fidelity Investments Charitable Gift Fund faces charges of mismanaging a $100 million charitable gift made by Malcolm and Emily Fairbairns, proprietors of the San Francisco firm Ascend Capital, to fight Lyme Disease. The Fairbairns allege that Fidelity broke its word concerning how it would liquidate the assets, and in so doing cost both the Fairbairns and the recipient charities millions.

A large portion of the Fairbairns charitable donation came in the form of stock in Energous, a wireless charging technology venture that appreciated massively in value when the FCC approved its core technology. According to the lawsuit, Fidelity Charitable assured the Fairbairns that it would liquidate the shares gradually, using “sophisticated, state-of-the-art methods” and agreed-upon price limits to ensure that the stock preserved its value. In point of fact, Fidelity liquidated all the shares immediately, depressing the shares’ value by somewhere between $10 million and $19 million.

Fidelity Charitable denies ever having made any such promises. Its stated policy is to sell securities immediately upon receipt, which it insists was communicated to the Fairbairns.

While the case has yet to go to trial, the Fairbairns won a significant victory when a federal District Court in California denied a motion to dismiss the case, ruling that the couple has both standing to sue and sufficiently alleged causes of action. That decision lends legal weight to the rights of donors in overseeing DAFs, which may force greater accountability upon the financial institutions that manage them. The governing assumption has been that a donor loses any legal standing once money is transferred to the fund.

According to David A. Levitt, of the nonprofit law firm Adler and Colvin, the Fairbairns case is just a more prominent instance of a broader problem. “We’re aware that this can happen,” he tells the New York Times. “There are many issues like this that never make it to a case.” As such, the case could have sweeping implications for the entire industry, which as of 2017 held over $110 billion in assets.

While the Fairbairns are the claimants in the ongoing case, it also makes plain some of the ways in which DAFs are particularly advantageous to the superrich and the finance industry—potentially at the cost of charities and the public.

The Fairbairns’ $100 million dollar donation to fight Lyme disease did not happen in a vacuum. To be precise, it happened one day after the Fairbairns’ Energous holdings spiked 39% in value (on December 27, 2017), portending massive capital gains taxes if they sold their shares.

By donating them, in contrast, they not only avoided that tax but also maximized their tax credit, potentially for years to come. Since a DAF provides an end-run around establishing a foundation or disbursing charitable monies, it makes it easy to time such gifts of stock to maximize tax benefits and insulate the donor from any risk of share depreciation.

Emily and Malcom Fairbairn vs. Fidelity Charitable thus illustrates why donor-advised funds have become Silicon Valley’s most beloved philanthropic instrument. For example: in 2014 Nicholas Woodman, the founder of GoPro, donated 5.8 million shares of GoPro stock to a DAF he created at the Silicon Valley Community Foundation. The donation (valued at $500 million) not only allowed Woodman to avoid capital gains taxes, but also reduced his taxable income by $450 million.

Today, that stock is worth just under $34 million. While it is not known when (or how much) of the stock has been sold by SVCF, we do know that the Woodman Foundation has thus far made a grand total of one grant. Woodman’s tax credit remains unchanged, however, and SVCF—like Fidelity Charitable, Vanguard, Goldman Sachs, and other major asset managers operating these independent public charities—will still harvest millions in fees as long as the fund are under management.

Emily and Malcom Fairbairn vs. Fidelity Charitable may begin to answer questions about what legal rights donors have over the ongoing management of donor-advised funds. More fundamental questions about how we ought to structure the relation between incentivized charitable giving and the public good, however, will continue to loom large.