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philanthropy
Dolly Done Good
I admired Parton not so much for singing, like millions did globally, but for something else: her literacy promotion.
Aug 27, 2026
Dolly Parton, actress, entrepreneur, and singer extraordinaire, passed away at the age of 80 on August 25, 2026. She rose from poverty in Appalachia to global fame and a loyal following.
Tributes have been pouring in and rightly so. I admired Parton not so much for singing, like millions did globally, but for something else: her literacy promotion. Let me explain.
Parton donated some 200 million books in her lifetime. Think about that. Reading is a key process to self-discovery in an increasingly confused and confusing world.
As a youth growing up in a vanilla neighborhood attending an integrated middle school, reading Manchild in the Promised Land by Claude Brown, was an eye-opener. Brown’s autobiography of growing up in Harlem during the 1940s and 1950s was unlike anything else that I had read.
Parton actively facilitated reading and one of its outcomes. I mean critical thinking. That’s never been more important.
My parents had union jobs, and the schools I attended had libraries. My fortune in life is increasingly rare in America now, where 1,000 billionaires rent politicians to get government contracts and favorable laws and policies to accumulate more wealth, as ordinary people struggle to pay for food, fuel, and rent—the affordability crisis.
Later as a young adult, I learned that my father was in Harlem during an uprising against police brutality and economic marginality, of March 19-20, 1935, a history that deepened my appreciation for Brown’s work. Harlem “was where the action was,” my father shared with me. I began to grasp a bigger picture of personal and national history, encompassing Brown's autobiography.
Parton actively facilitated reading and one of its outcomes. I mean critical thinking. That’s never been more important in the current post-truth moment of online disinformation about domestic and foreign affairs, of, by, and for the benefit of billionaires and corporations, a symptom of the overall rot in US economics and politics.
Further, in a nation built with the stolen labor of enslaved Africans that in part relied upon depriving them of learning to read, Parton’s gift of 200 million books to poor and working people is, I argue, a revolutionary act. That she hailed from a community of poor whites long susceptible to the ideology of anti-blackness, a centuries-long ruling class divide-and-conquer strategy, speaks volumes of her revolutionary devotion to humanity.
Parton appeared to be electorally independent of the two-party duopoly, a great thing. Meanwhile, she publicly endorsed the movements of African Americans (Black Lives Matter) and LGBT folks for full recognition of their human rights. In a racist and warrior nation such as the US, where buying a gun is easier than receiving healthcare, her support of the maligned and oppressed via the promotion of reading books should be emulated.
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Dolly Parton Remembered as 'Advocate for Inclusion, Women’s Rights, Children's Literacy, and More'
"She was not only a talented musician and songwriter, but a lifelong philanthropist and advocate for literacy, education, LGBTQ+ rights, healthcare, and disaster relief. Her music and humanity touched millions."
Aug 25, 2026
Dolly Parton died Tuesday in Nashville, Tennessee at the age of 80, and was fondly remembered by people around the world for not only her decades in the entertainment industry but also her philanthropy and promotion of the belief that "everybody should be treated with respect."
Parton's nephew and head of security, Bryan Seaver, confirmed the country music icon's passing in a video message shared on her social media accounts. As Rolling Stone reported, she "was born January 19, 1946, the fourth of Robert Lee and Avie Lee Owens Parton's 12 children, in a one-room cabin on the banks of the Little Pigeon River," and "grew up in rural poverty," lacking plumbing and electricity.
The obituary shared on Parton's platforms notes that she was preceded in death by her parents, as well as "her beloved husband of 59 years, Carl Thomas Dean," who died last year, and that "the family asks for donations to be made to Dolly Parton's Imagination Library," which was inspired by her father's inability to read and write, and has gifted more than 300 million books to children over the past three decades.
"Dolly Parton could have retired long ago having achieved greatness," Congressman Ro Khanna (D-Calif.) said of the singer and actress who won multiple Grammy and Emmy awards, among numerous others, and whose songs include "Coat of Many Colors," "I Will Always Love You," and "Jolene."
Rather than retiring from the spotlight, Khanna noted, "she chose to continue her life pursuing the arts, and pushing boundaries to advocate for inclusion, women's rights, children's literacy, and more. Dolly touched countless hearts and will forever be remembered."
US Sen. Bernie Sanders (I-Vt.) wrote on social media that "Dolly Parton was one of the great entertainers of our era. She was not only a talented musician and songwriter, but a lifelong philanthropist and advocate for literacy, education, LGBTQ+ rights, healthcare, and disaster relief. Her music and humanity touched millions. She will be sorely missed."
Sen. Elizabeth Warren (D-Mass.) said that "Dolly Parton gifted the world with her talent and heart. From supporting children, donating to science, investing in Tennessee, and giving us songs to sing our hearts out to (looking at you, '9 to 5'), she made the world a better place. Thank you, Dolly, for leading with love."
Democratic North Carolina Gov. Josh Stein said that "Dolly Parton was so special, so universally loved. The first word that came to my mind just now was 'authentic,' which is funny since she is well known for her big wigs and extravagant gowns. But she was always herself. Her music was powerful and moving... But her impact on the world was much greater—from providing kids free books to funding vaccine research and promoting tolerance. America lost one of our best today."
Similarly saying that "Dolly Parton represented the very best in America," former Labor Secretary Robert Reich wrote at his blog that "I think what I admired most was her empathy (the sentiment disparaged by Elon Musk. In fact, to my mind she was the human that embodied the exact opposite of Musk.) She felt the pain of those in poverty. She felt for women subordinated to patriarchy... She felt for working women."
Other key Democrats who posted remembrances included Kentucky Gov. Andy Beshear, Senate Minority Leader Chuck Schumer (NY), and former House Speaker Nancy Pelosi (Calif.), who called Parton "a singular American icon whose extraordinary voice, joyful spirit, and generous heart brought light to millions and made America kinder and more hopeful."
Parton took stances on topics that have become divisive in US politics—such as supporting LGBTQ+ rights and vaccine research—but she openly avoided wading into political races, and was also honored on Tuesday by various right-wing politicians and other figures, from Cabinet members, federal lawmakers, and governors to Republican President Donald Trump, who announced on Truth Social that "I am lowering the American flag throughout the United States for a one week period."
Meanwhile, as elected Republicans ban books and cut programs for the working class while giving more tax breaks to the ultrarich, Melanie D'Arrigo, executive director of the Campaign for New York Health, said that "Dolly Parton spent her life helping kids, marginalized communities, and people in need, while entertaining millions. She never had to, she chose to. In a world full of wannabe Donald Trumps, choose to be a Dolly Parton."
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Funders Need to Catch Up to the Anti-Data Center Movement
The anti-fracking movement and the Inflation Reduction Act coalition were both built in part on early philanthropic bets on local and national organizing; data center resistance can follow the same pattern, but only if the money shows up while the moment is live.
Aug 01, 2026
The fastest-growing movement in the country is running on almost no institutional money, and it's effectively fighting against some of the world’s most rapacious billionaires.
It is an organic, grassroots movement to stop AI data centers.
Data centers not only raise electricity bills, they are draining water often already in short supply, drive pollution and emissions, and are routinely negotiated in secret.
Communities have figured this out faster than local governments, and with stunning success, local groups are winning their campaigns against data center projects all over the country.
Fund the organizers and trainers who can turn 833 local fights into a coherent national and international movement without flattening what makes each one local. And fund fast.
Opponents successfully blocked or delayed at least 75 projects worth roughly $130 billion in the first quarter of 2026, matching all of 2025 in three months. Active opposition groups more than doubled to 833 across 49 states. Legislators filed more than 300 data center bills in the first six weeks of the year.
None of this came from a philanthropic strategy, but rather from neighbors and unlikely allies in church basements and county planning hearings.
Movements at this stage have energy and passion. And they have potential and momentum. But what they don't have is the resources that can sustain a strategic fight. No staff to hold momentum between hearings, no legal defense when developers sue, no trainers to turn a first-time zoning meeting attendee into an organizer, and nothing linking the fight in Prince William County to the ones in Hancock County, South Jersey, Dublin, and Santiago.
The anti-fracking movement and the coalition behind the Inflation Reduction Act were both built in part on early philanthropic bets on local and national organizing. Data center resistance can follow the same pattern, but only if the money shows up while the moment is live.
As the most significant institutional funder of non-violent, disruptive climate activism, Climate Emergency Fund directs resources where grassroots energy, public concern, and campaign opportunity most clearly align. Right now, that is the AI data center resistance. So far in 2026, more than a third of our granted support has gone to groups planning campaigns around data centers and AI. Our venture philanthropy model moves early-stage funding to new groups fast, sometimes before they have a name, and stays close through what we call intensive accompaniment. The data center fight rewards exactly this approach, because the decisive moments are rezoning votes and permit hearings that will not wait for a grant cycle.
I know the objections, because I hear them from funders and civil society. Some say climate philanthropy should retreat to safer ground while nonprofits are under attack. Some, following the Gates Foundation's lead, want to pivot to affordability. Others, like Sunrise Movement, argue the fight against authoritarianism comes first. I understand all three impulses, and I think the data center fight answers all three.
This is the affordability issue: Electricity prices are, as Charles Hua of the consumer group PowerLines put it, “the new eggs,” with residential bills in Indiana up 17.5% in a year and Georgia Power customers absorbing six rate increases in two years.
This is the democracy issue: communities discovering projects negotiated in secret, behind nondisclosure agreements and shell companies, then organizing to demand consent. They understand fundamentally that the future belongs to all of us, not just seven tech billionaires and their allies.
And it is the climate issue: The International Energy Agency projects that gas and coal will meet more than 40% of new data center electricity demand through 2030, with retired coal plants at risk of coming back online.
Funders do not have to choose among their priorities here. This is the nexus.
It is also, frankly, the most defensible grant a climate or democracy funder can make. At the very least, supporting a community group that testifies or protests at a county board meeting is constitutionally protected, small-d democratic activity with bipartisan support. What a strange thing that fear of an administration touting threats against “anti-tech extremism” would cause funder retrenchment around perhaps the most politically unifying issue we’ve seen in a generation. In an era when funders worry about risk, this is what low risk and high leverage look like at the same time.
So the ask is specific. Fund general operating support, because these groups need salaries, not deliverables. Fund pooled legal defense, because litigation designed to drain and intimidate is coming. Fund the organizers and trainers who can turn 833 local fights into a coherent national and international movement without flattening what makes each one local. And fund fast.
Philanthropy likes to say it provides risk capital for social change. The people are already in the room. The only question is whether we will fund them to stay there.
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Now More Than Ever, Philanthropy Must Back the Groups Fighting Corporate Power
Do not pull back because the political moment got harder; that is precisely when this work needs you most.
Jun 25, 2026
Amazon wanted to build 250 diesel generators in a working-class Minnesota community and skip an environmental review that would have scrutinized emissions and pollution. A local organization decided to fight anyway, banded together with others, and won.
That organization was CURE, a grantee of the Climate and Clean Energy Equity Fund, and last year's fight was about more than a data center. It was about whether Amazon could run 250 diesel generators next to a retiring coal plant in Becker, Minnesota without answering for what it meant for the air and water in a community already in the middle of an energy transition.
Those generators would have produced 600 megawatts of backup power, without the environmental review that would have examined their emissions impact. The community had no interest in absorbing the pollution costs of Amazon's AI ambitions.
I have spent 25 years in this work, first as an organizer and now as someone who helps fund it. What happened in Becker does not surprise me. CURE did not win because it got lucky. It won because someone had invested in that organization years before Amazon showed up, building the staff, the community relationships, and the knowledge of how a state utilities commission actually works. That is how organizing operates. The results are visible. The groundwork is not. And right now, that groundwork is being torn up on purpose. Philanthropy helped build it. Now it needs to decide whether it will defend it.
For many of the organizations we fund at the Climate and Clean Energy Equity Fund, ours is the first climate grant they have ever received. That is not a boast. It is an indictment of how philanthropy has allocated its resources.
I saw what patient investment makes possible in the early 2000s, when I was part of an immigrant women's organization in San Francisco called Mujeres Unidas y Activas. We had four staff members and a big dream. Over the next decade MUA grew to 40 people and became one of the founding members of the National Domestic Workers Alliance, which we built alongside a dozen other domestic worker groups who came together in Atlanta and decided to act as one.
The alliance went on to help win legal protections for the nannies, housekeepers, and home aides that federal labor law had excluded since the New Deal. None of that came from a single breakthrough. It came from funders who stayed in it long enough to see something grow.
That infrastructure is being dismantled right now, and the attacks are not accidental. When voter registration drives signed up new voters by the thousands, lawmakers in several states moved to criminalize the groups behind them.
Nick Tilsen founded the NDN Collective to defend Indigenous rights and land sovereignty in the Dakotas, and that work made him a target. He faced aggravated assault charges and the prospect of more than 25 years in prison for monitoring a police encounter in Rapid City before a jury deadlocked and all charges were dropped earlier this year. The Southern Poverty Law Center, which has tracked hate groups for more than 50 years, was federally indicted on fraud charges in April. You do not need to ban organizing if you can make it too expensive and too frightening to sustain.
What disappears when this work gets defunded does not make the front page. A permit gets quietly approved. A workplace complaint never gets filed. A hearing happens and no one is there to speak. Black, Latinx, Indigenous, and working-class communities have always been powerful. What they have not always had is the sustained investment they deserve.
For many of the organizations we fund at the Climate and Clean Energy Equity Fund, ours is the first climate grant they have ever received. That is not a boast. It is an indictment of how philanthropy has allocated its resources, and it has to change. We call on donors to fund grassroots organizations now.
Fund them for years, not grant cycles. Do not pull back because the political moment got harder. That is precisely when this work needs you most.
Republicans hold complete control of state government in 23 states today, Democrats in 16. That map does not change through advertising. It changes through patient, ground-level organizing in the places the political class has written off, on a timeline of years, not election cycles. Cutting that work now is not fiscal discipline. It is a strategic concession.
Climate, democracy, and economic justice are not separate fights. They are the same fight, and the communities on the frontlines of all three have been saying so for years. “Affordability,” the latest political buzzword, is not new or distinct from these ongoing fights. In Becker, what was at stake was clean air, democratic accountability, and a community's right to shape its own energy future. CURE understood that. The question is whether the people and institutions with the resources to back that kind of work will understand it too, and soon enough to matter.
I still think about those four staff members at MUA, and what became possible because someone believed in the work long before there were results to show for it. Frontline communities are not waiting to be rescued. They are building, organizing, and winning. The question is whether philanthropy will stop watching and start investing.
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Philanthropy Must Evolve
How we redefined business as usual to move $500 million.
Jun 10, 2026
For too long, philanthropy has hidden behind the twin gatekeepers of fiduciary duty and perpetuity to avoid giving more when communities need it most. Last year, the Marguerite Casey Foundation provided a one-time fivefold increase in funding to meet a deepening moment of crisis. We learned this was a lifeline to many organizations facing increasing attacks and whose funders were pulling back from supporting racial and economic justice organizing.
The damage we’re seeing—from cuts to essential government services and ICE raids to a corrupt federal government orchestrating the largest transfer of wealth from the poorest people to the richest in our nation—will have impacts for a generation. Philanthropy must provide resources at a scale and with a fervor that meaningfully responds to the reality of the world around us.
Yet, at a time when funders should be doing more, The Center for Effective Philanthropy recently documented a stunning disconnect: the vast majority of philanthropic leaders believe everything is fine, while the nonprofit sector is suffering job losses, burnout, and uncertainty. To address this gap between foundation comfort and community suffering, our sector must evolve how we move money.
A foundation more concerned with preserving its endowment than in meeting its mission must question whether it is living into its charitable purpose.
The traditional philanthropic model limits annual giving to 5% of a foundation’s total assets. A commonly cited reason for this approach is fiduciary duty. Foundation trustees and leaders invoke fiduciary duty to shut down conversations about increased payout: "We can't give more than 5% of our assets because we have to exercise fiduciary responsibility."
But after a series of deep conversations with our board, examining legal frameworks and sharpening our definitions, we arrived at a different conclusion: fiduciary duty is a duty to mission. So if our mission is to transform the government so it delivers on the promise of a good life for all people then right now is precisely when we need to make the deepest commitment we possibly can. Increasing our annual grantmaking by 50% to a minimum of $500M over the next decade is how we’re putting into practice our sharpened understanding of fiduciary duty to mission.
The second assumption we examined was the unexamined belief that foundations must exist forever by growing their endowments at any cost, even when that cost is investing in corporations that work at cross-purposes to our mission. Perpetuity, often written directly into a foundation's bylaws, is the second gateway where conversations about increased payout often go to die.
The logic sounds reasonable on its face: to last forever, a foundation must preserve and grow its endowment infinitely. But a foundation more concerned with preserving its endowment than in meeting its mission must question whether it is living into its charitable purpose. We hope that our commitment to give $500M over ten years will serve as a powerful proof point for our sector that a vastly increased payout and perpetuity can and must coexist.
If our mission is to transform the government so it delivers on the promise of a good life for all people then right now is precisely when we need to make the deepest commitment we possibly can.
Through rigorous investment stress testing, we found that most foundations can, in fact, drastically increase their payout even while adhering to a commitment to perpetuity. When we took a closer look at our own bylaws, it became clear that our perpetuity clause doesn’t define “perpetuity” as endless upward growth of the endowment. Instead, perpetuity simply means lasting forever—it says nothing about getting larger forever. Our sector has confused endless growth with existing over the long-term. At MCF, we’re untangling the two and showing how a foundation can last indefinitely while also spending down its endowment to a predetermined level. The two are not in conflict.
Instead of a grantmaking formula determined by a rigid percentage of total assets, we now operate from a sharpened approach: fiduciary duty centers mission, and perpetuity means building durable community power, not endlessly growing our own money for an unpromised tomorrow. We are not alone in this realization or practice. Many of our philanthropic partners have been giving above and beyond the 5%, realizing that "forever" has become an excuse for "not now."
The crises we’re facing are too big for business as usual. Our invitation to foundation leaders reading this: let’s evolve our practice of fiduciary duty and perpetuity so we can move the money to the community organizers, scholars, municipal leaders, and meaning-makers creating a future worthy of living.
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How Billionaires Like Marc Benioff Use Philanthropy To Skirt Around Public Scrutiny
Benioff has given over $1 billion to San Francisco, but this money has an agenda: to keep critics off his back.
Oct 23, 2025
Marc Benioff is a classic case of a bad-faith billionaire philanthropist. He donates hundreds of millions of dollars to the communities he lives in—San Francisco and the Big Island of Hawaii—to skirt around public scrutiny.
Benioff, a Bay-Area native whose net worth hovers under $9 billion, and his company Salesforce have donated over $1 billion to San Francisco—as of October this year. As for Hawaii, where Benioff bought land in 2000, he and his wife Lynne have graciously given $250 million in philanthropy. Most of this money has gone to building or expanding hospitals.
But his philanthropy has an agenda: to keep critics off his back.
Another big-money billionaire, Mark Cuban, whose net worth sits around $6 billion, shared his thoughts on philanthropic efforts like Benioff’s over the weekend during an episode of Real Time with Bill Mahr. Sitting beside Andrew Ross Sorkin, Cuban said he prefers to donate anonymously and questions the intentions of those who do differently.
Instead of focusing his time crafting an apology, Benioff used his shot to yell about how much money he has given to the community.
“Why would you put your name on a building or a hospital if not for leverage, for power, for influence?” he said.
Well said, Mr. Cuban. Power, influence, leverage–and an opportunity to excuse bad behavior–are exactly what Mr. Benioff seeks in spending so much, tax-deductable, money on children’s hospitals with his name plastered on the side.
This became clear in the aftermath of Benioff’s poorly received–yet hardly surprising–comments to the New York Times earlier this month, in which he suggested his former-foe-now-friend, President Donald Trump, send the National Guard to San Francisco.
“We don’t have enough cops, so if they can be cops, I’m all for it,” Benioff said.
The fallout was immediate. Local leaders condemned his comments, and Ron Conway, a Democratic donor and Silicon Valley venture capitalist, publicly resigned from Salesforce Inc.’s Philanthropic Foundation.
“It saddens me immensely to say that with your recent comments, and failure to understand their impact, I now barely recognize the person I have so long admired,” Conway said in an email to Benioff last week.
Benioff, for his part, has been trying to walk back his comments—by bragging about how much money he has donated to San Francisco: “No one is doing more philanthropy in San Francisco this year than I am,” he told the San Francisco Standard after his controversial comments hit airwaves across the country. “Nobody has given more than my family. Nobody has given more than my company.”
Instead of focusing his time crafting an apology, Benioff used his shot to yell about how much money he has given to the community.
And this isn’t the first time he’s tried using his philanthropy to get out of hot water. When NPR reporter Dana Kerr went to report on Benioff in Hawaii—and his suspicious spending spree on real estate—the billionaire tried to persuade her into writing a positive story.
“He started texting me all the time. His texts were all about the philanthropy that he’s doing in Hawaii… He also connected me with people who know about his donations so I could talk to them,” Kerr said on an NPR podcast in March 2024. “The whole thing really felt like a pressure campaign.”
Sounds similar to his strategy with the SF Standard last week: reminding reporters of his philanthropic history to deter criticism. What happened to honesty–or apologies?
Benioff waited an entire week before apologizing for his National Guard comments–on where else but X.
But the damage is done. Reverberations from his mini scandal remain around the country. Questions of whether Trump is going too far, even for Republicans, by sending the National Guard to blue cities abound.
During a televised mayoral debate in New York City last week, all three contenders—Democrat Zohran Mamdani, Independent Andrew Cuomo, and GOP candidate Curtis Silwa—said they would not support Trump sending the National Guard to the city’s streets as mayor.
Trump has, so far, sent the National Guard to “fight crime” in five US cities—all led by Democratic mayors: Washington, DC; Los Angeles, California; Portland, Oregon; Memphis, Tennessee; and Chicago, Illinois. Lawmakers from those states have said military presence is not necessary, except for Tennessee’s Republican Gov. Bill Lee.
The president continues to threaten other cities with military presence, and in some cases, has taken it a step further: In Boston, led by Mayor Michelle Wu, he’s raised the idea of moving the FIFA World Cup. (Trump is good pals with FIFA president Gianni Infantino, who was curiously present at the Gaza Peace Summit.)
Meanwhile, Benioff’s magazine Time, which he purchased in 2018 “to help address a crisis of Trust,” just put Trump on its cover for the second time this year.
Trump, however, hates the picture.
“Time Magazine wrote a relatively good story about me, but the picture may be the Worst of All Time,” the president wrote on Truth Social in the early hours of Wednesday.
While our commander in chief addressed his cover photo, he has yet to comment directly on Benioff’s request. Instead, he’s built up a lie around the billionaire’s contentious comments, citing, falsely, that “government officials” in California have called for the National Guard’s deployment.
“We have great support in San Francisco,” Trump told FBI Director Kash Patel at a White House conference this week. “So, I’d like to recommend that for inclusion, maybe in your next group.”
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Real-Life Scrooges Are Hoarding Charitable Donations in Foundations and Funds
Current rules enable wealthy donors to bank their tax break immediately, but the donated funds may remain sidelined for decades.
Dec 05, 2024
For as long as we can remember, the end of the calendar year has marked the start of America’s giving season.
The holidays that light up our darkest months also invite us to celebrate (and practice!) generosity. Food banks, youth groups, arts and civic organizations, and community service programs heavily depend on the support they receive in November and December.
Year-end giving is big for tax purposes, but many people donate without regard to whether they’ll get a deduction. In fact, fewer than 10% of donors claim a tax deduction for charitable giving.
So, big donors: You want a tax break? Make sure the money gets to a working charity—and fast.
The super-wealthy, who do take advantage of itemizing their tax returns, give differently. They give more to large hospitals and universities, where you can get your name on a building. That kind of giving can be valuable too.
But a less visible difference is crucial to recognize.
Increasingly, wealthy donors are parking money in entities they control, like private foundations and donor advised funds (DAFs). These intermediaries then, in theory, donate money to working charities.
But private foundations are only required to “payout” 5% of their assets a year to these other charities. And DAFs have no requirement to payout at all. So wealthy donors bank their tax break immediately, but the donated funds may remain sidelined for decades.
According to a new report we co-authored, Gilded Giving 2024: Saving Philanthropy from Wall Street, over 35% of all charitable donations now go to one of these two intermediaries.
There’s now $1.7 trillion parked in private foundations and DAFs—money that could be flowing to working charities in a timely way to solve problems. We estimate that by 2028, half of all donations will go to private foundations and DAFs.
As wealth has concentrated in fewer hands over the last four decades, so has this kind of dubiously “charitable” giving—a trend we call “top-heavy philanthropy.” And it’s increasingly profitable for financial advisers to the ultra rich.
Wall Street financiers promote DAFs as a way for donors to receive immediate tax reductions in the year they give, but then they sit on those funds and collect wealth management fees. The financiers have no financial incentive to ever see the money go to a mental health center, food bank, community theater, or other working charity. It’s more profitable for them to keep assets under management.
The rest of us subsidize this system. For every dollar a billionaire donates to charity, including to their own foundation or DAF, the rest of us chip in up to 74 cents in the form of lost tax revenue.
So how did we get a charity system that works for multi-millionaire donors and wealth managers but not for nonprofit charities, small donors, and the taxpaying public? In part, it’s because lobbyists for the financial industry and DAF sponsors fight vigorously against any change.
But a growing coalition of donors, nonprofit charities, and people who care about tax fairness are pushing back. They point out that lawmakers could easily fix the rules to increase the flow of charitable funding, increase transparency, and shut down the tax avoidance and self-dealing practices currently corrupting philanthropy.
The message is getting across. A 2024 Ipsos poll found that 71% of respondents believe Congress should raise the annual payout rate for private foundations and require the same for DAFs. Across the political spectrum, a clear majority of Americans believe if a donor gets a tax break, they should move the money in a timely way to a working charity.
So, big donors: You want a tax break? Make sure the money gets to a working charity—and fast. You want other taxpayers to subsidize your giving preferences? Tell us where the money’s going.
Don’t like these rules? Then don’t ask the rest of us to subsidize it. Let’s make sure the season of giving actually centers on giving, not hoarding.
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For Wall Street-Fueled Philanthropy Industry, Every Day Is Giving Tuesday
"The financial industry aggressively markets DAFs for uncharitable reasons: advantages as tax avoidance vehicles, especially for complex assets; no payout requirements—and secrecy to donors and grantees alike," said one of the report's authors.
Dec 03, 2024
A new report released on this year's philanthropic holiday known as Giving Tuesday details how the "profit motives of the financial services sector have increasingly and disastrously warped how charitable giving functions."
The analysis by the Institute for Policy Studies—titled "Gilded Giving 2024: Saving Philanthropy from Wall Street"—shows how donor-advised funds (DAFs) increasingly serve the economic interests of donors and the Wall Street firms that manage the funds, rather than the interests of nonprofit charities.
Rather than donate to a cause directly, wealthy people have the option to donate to foundations or DAFs, which can be sponsored by for-profit wealth management firms like Fidelity Investments or Charles Schwab. Firms like Fidelity Investments, in turn, benefit from being able to offer this type of service to wealthy clients.
"At last count," according to the report's authors, "DAFs and foundations together take in 35 percent of all individual giving in the U.S." If they continue to grow at the rate they have for the past five years, they're expected to take in half of all individual giving in the country by 2028.
Why is this a problem? For one thing, according to the report, some of the money that's intended for donation is scraped up by the DAFs and foundations, meaning that dollars meant for a cause are diverted elsewhere.
"With each passing year, an additional 2 cents of each dollar donated by individuals is funneled into intermediaries and away from working charities. Assuming that their assets will grow at the same rate they have over the past five years, the assets held in DAFs and foundations will eclipse $2 trillion by 2026," according to the report's authors.
What's more, there is no requirement that DAFs disburse their assets, according to the report's authors—meaning there's no guarantee the money is given to charity, and in practice the money in these accounts tends to move slowly, often generating gains instead of being dispersed.
DAFs also facilitate anonymous giving, because donations from them need only be credited to their sponsors, not the original person directing the contribution, according to Inequality.org, a project of IPS.
The report's authors argue that DAFs are part of a wider “wealth defense industry” — tax lawyers, accountants, and wealth managers whose interests are more geared towards helping their clients increase assets, minimize taxes, maximize wealth transfer to descendants, and net some of those assets for themselves in the form of fees, as opposed to supporting charitable causes.
DAFS are used strategically in this way, for example, by giving donors the ability to dispose of noncash assets, according to the report. In practice, this means that DAF donors can give stocks, real estate and other noncash assets directly to DAFS when markets are doing well, meaning they are able to get income tax deductions from their contribution while side stepping paying capital gains tax on appreciation of those assets.
"The financial industry aggressively markets DAFs for uncharitable reasons: advantages as tax avoidance vehicles, especially for complex assets; no payout requirements—and secrecy to donors and grantees alike," said Chuck Collins, co-author of the report and director of the Charity Reform Initiative at IPS.
Other key insights from the study include:
- Tech companies are offering DAF-related platforms, apps, and widgets in order to make DAF granting, and by extension charitable giving, more "frictionless." Yet, these companies, also promote DAFs to advisors and donors in terms of tax efficiency and their ability to help investment advisors "maintain AUM"—or assets under management.
- That the financial industry is "blurr[ing] the distinction between investment and philanthropy." Investors will talk about philanthropy as part of a wider portfolio of financial behaviors, as opposed to something fundamentally different—"something that, by its nature, requires individuals to relinquish personal interest and control."
The report recommends a number of reforms in order to take back philanthropy from Wall Street, including enacting regulations that would ensure donations reach working charities on reasonable timelines, undertaking {agreement} reforms to eliminate "shell games and tax dodges that financial advisors craft to diminish and delay the flow of funds to qualified charities," organizing a coalition of interested partners that would apply pressure on Congress and state governments to take action, and uplifting good examples of DAF sponsors who facilitate steady and generous giving despite gaps in the law.
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It's Time for Philanthropists to Get Into Climate Emergency Mode
It’s time to spend aggressively. With the world on fire, the greatest risk, by far, is for philanthropy to move too slowly and too timidly.
Sep 10, 2024
As a clinical psychologist turned climate activist and now a funder of disruptive climate protests, I have witnessed the profound disconnect between the urgency of our climate crisis and the tepid, cautious response of the philanthropic sector. It brings me close to despair, as I know that incrementalism or philanthropy-as-usual can’t possibly be effective at protecting humanity.
The public is in a mass delusion of normalcy — sleepwalking off a cliff — and philanthropy is complicit. Philanthropy has treated the climate as one problem among many that should be dealt with in a “business as usual” way, including all of the philanthropic sector’s incrementalism and caution.
This is entirely the wrong approach. What’s needed is for philanthropy to treat the climate emergency like the crisis it is. There’s a recent precedent for this: In 2020, as COVID ravaged populations worldwide and governments seemed unable to attack the problem, the largest foundations marshaled their resources and quickly poured an estimated $10 billion into the development, testing and deployment of new vaccines. Their efforts saved millions of lives.
Unfortunately for all of us, the climate is an order of magnitude more dangerous than COVID. It’s time to spend aggressively. What good is an endowment if Copenhagen, New York City and Seattle are under water and Silicon Valley is burned to a cinder by perpetual wildfires? Foundations need to recognize that their missions — whether in medical research, education, or social justice — are all threatened by the climate emergency. There will be no hospitals, schools or social services on a dead planet.
There will be no hospitals, schools, or social services on a dead planet.
In order to meet the moment, foundations must engage in organization-wide reckonings, learning together about the scale and urgency of the climate emergency — and the fact that traditional philanthropy has thus far not been able to reduce emissions globally. Foundations should ask, given the acute nature of the crisis, what are the ways they should depart from their usual “philanthropy as normal” mode, and get out of our comfort zone.
Philanthropies must reassess their grantmaking strategies and priorities in light of the apocalyptic nature of the climate emergency. Particularly, they should re-evaluate their approaches to risk, efficacy and conflict. The greatest risk, by far, is for philanthropy to move too slowly and too timidly. Continuing down our current path will lead to horrific outcomes. To be prudent, we must be bold. That means making big bets on new groups and new people.
Philanthropies must also not be afraid of conflict — and be explicit about the need to fight and end the fossil fuel industry, and the politicians who support it. The Carmack Collective and Equation Campaign have both done this, shaping their missions to fight fossil fuels.
Foundations should interrogate and explore with an open mind what is the highest leverage, fastest, most effective way that they can use their resources to respond to the climate emergency. One way I advise funders to think about this is by asking: Who, ultimately, will cover the cost of the transition to zero emissions, which will need to be on the scale of World War II? Is it philanthropy? Of course not. Only governments have the kind of spending power — and legislative power — that we need. Philanthropy, with its significant resources and influence, has the potential to shake the public awake and spur the government to this necessary mobilization, but not to execute such a mobilization itself.
Philanthropy has a unique and critical role to play in addressing the climate emergency. By acknowledging the calamity we face and adjusting their operations, philanthropies can lead society into the “emergency mode” necessary to avert disaster.
How can philanthropy help create a society-wide mobilization? There is only one way: Funding social movements.
Throughout history, transformative change has come about through movements and social revolutions. From the civil rights movement to the women’s movement to ACT UP and the gay rights movement, authentic people-led movements drew attention to the cause, drastically moved public opinion, and forced governments to change, adapt and respond.
Philanthropies should shift from funding large legacy, incremental environmental organizations that have demonstrated an inability to act on the speed and scale necessary, to younger, dynamic groups that leverage effective tactics, crisis communications efforts and disruptive activism.
Supporting disruptive protests may be one of the most cost-effective strategies for addressing the climate crisis. A 2021 analysis by Giving Green revealed that each dollar invested in protest activities could reduce emissions by six metric tons of carbon, due to its influence on legislative outcomes. Additionally, a study published in the Stanford Social Innovation Review found that donations to organizations like Extinction Rebellion or the Sunrise Movement are six to 12 times more impactful than contributions to top-rated climate charities.
One reason is that nonviolent disruptive actions achieve media coverage at a rate no other initiatives can match. Climate Emergency Fund’s disruptive grantees were featured in over 75,000 articles in 2022 and 2023 worldwide. The disruptive activists we support are forcing a reluctant media to cover their actions, whether halting national sporting events, shutting down private airports or disrupting political speeches. These activists embody the emergency mentality. With their actions, they demonstrate the degree of their alarm and the seriousness of the crisis.
And yet these approaches are seriously underfunded. Philanthropic funding for climate change represents only about 1.5 percent of total philanthropic contributions. Within this small portion, the amount allocated to grassroots climate activism is so minimal that it isn’t even recognized as a distinct grant-making category in the ClimateWorks Foundation’s 2022 report on climate philanthropy.
The Carmack Collective, Equation Campaign and the Climate Emergency Fund, where I am the executive director, are three groups supporting people-led organizations fighting the fossil fuel industry. The larger JPB Foundation and the Sequoia Foundation have also demonstrated commendable efforts in funding people-powered movements and aggressive climate action. These organizations exemplify the kind of leadership needed.
Philanthropy has a unique and critical role to play in addressing the climate emergency. By acknowledging the calamity we face and adjusting their operations, philanthropies can lead society into the “emergency mode” necessary to avert disaster. The time for half-measures, white papers and panel discussions is over. Philanthropy must act now, boldly and decisively, to help save our planet for future generations.
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Simple Charity Reforms Could Unlock Hundreds of Billions for Nonprofit Sector
An estimated $1.7 trillion in donations, ostensibly earmarked for philanthropy, are currently languishing in private foundations and donor-advised funds—while charities like Feeding America and Habitat for Humanity are under-resourced.
Aug 09, 2024
Thanks to outdated charity tax laws, the U.S. is missing out on hundreds of billions of dollars that could flow toward housing and food security, health research, education, advocacy, and other crucial nonprofit efforts aimed at uplifting the common good—but simple reforms could unlock some of the extreme wealth that is currently "warehoused" in private foundations and donor-advised funds.
This is according to a new Institute for Policy Studies analysis that shows charitable groups currently hold an estimated $1.7 trillion in donations that are "ostensibly earmarked for philanthropy," but are able to "languish in go-between funds" while working charities remain under-resourced.
The foundations and donor-advised funds (DAFs) are able to collect tax breaks while sitting on billions of dollars thanks to provisions in the Tax Reform Act of 1969 that haven't been updated in decades, wrote IPS associate fellow Helen Flannery and associate director of charity reform initiatives Bella DeVaan at Inequality.org, a project of the organization.
"Initially, in the Tax Reform Act of 1969, private foundations were mandated to give away 6 percent of their wealth or the annual net growth from their investments: Whichever was higher," wrote Flannery and DeVaan. "Foundations' tax benefits wouldn't provide license for funds to just grow forever and ever, and they were to be consistently responsive to shifting economic reality. A decade of revisions to payout requirements reflected those principles and eventually created our flat 5% mandate. But that 5% is overdue for re-evaluation, and our elected representatives have fallen asleep at the wheel."
"It's worth imagining a future in which billions more flow towards life-saving medical cures, food security, housing access, and environmental protection through organizations that are already woven into our social fabric."
While the nation's largest foundations give charitable donations at a rate of about 5%, "their gains in the market have averaged 9% over the last five years," they explained.
In other words, said Flannery and DeVaan, the funds "are growing faster than the rate at which they give" while donations to working charities like Habitat for Humanity, United Way, and Feeding America fall behind.
The wealth of DAFs has skyrocketed by 411% in the last decade, with the funds stockpiling an estimated $230 billion in assets in 2023.
IPS noted that billions of dollars in DAF gifts have been directed as dark money contributions—whose donors "might well have second thoughts" if tax laws were reformed to require both boosted payouts and more transparency.
In its policy brief, IPS proposes reforms that would:
- Increase the minimum payout rate requirement to 10% for foundations with assets of $50 million or more, and increase it to 7% for all other foundations;
- Exclude private foundation overhead expenses above 1% of assets from counting towards payout;
- Exclude grants from private foundations to DAFs from counting towards payout;
- Require DAFs to pay out funds within five years of receipt (and provide individual account-level transparency);
- Exclude grants from DAFs to other DAFs from counting toward payout; and
- Generate excise tax revenue from intermediaries that don't meet the new requirements.
The new rules would generate more than $110 billion in additional funding for working charities each year, as well as $339 billion in donations over three years.
"It's worth imagining a future in which billions more flow towards life-saving medical cures, food security, housing access, and environmental protection through organizations that are already woven into our social fabric," wrote Flannery and DeVaan, "or organizations that could and should be with strengthened access to funding."
IPS released the analysis as legislators prepare to overhaul the tax code in 2025.
"We're hopeful that this can be a watershed moment for charity reform akin to 1969," wrote Flannery and DeVaan, along with IPS program director Chuck Collins.
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