Donor advised funds have become an increasingly popular avenue for charitable giving. But do these funds, which give donors all of the tax benefits of charitable giving without an obligation that the money be put to active charitable use, undermine American charity? 

"In 2015, while the most popular charity (measured in donated dollars) was the United Way, the second was Fidelity Charitable. Ever heard of it? It was created and is serviced by Fidelity Investments via “donor-advised funds” (also referred to as DAFs), which give donors all of the tax benefits of charitable giving, but impose no obligation that the money be put to active charitable use!

Most Americans have never heard of donor-advised funds, in which “charitable contributions” are invested and held until the clients give instructions (or “advise”) about distributions to operating charities. Clients get exactly the same tax benefits when they transfer property to donor-advised funds as by making outright contributions to a museum, soup kitchen, university or any other federally recognized charity. But no deadline is imposed for the eventual distribution of these funds to an operating charity. If a donor fails to distribute the account during her lifetime, she can pass on the privilege of making distributions to her children or grandchildren or anyone else she chooses. The effect of these rules is that assets that have been given the tax benefits of charitable donations can be held in a DAF for decades or even centuries, all the while earning management fees for the financial institutions managing the funds and producing no social value." - Lewis B. Cullman, PBS NewsHour