Launching Philanthropy Project

Jan Masaoka and Jon Pratt here.

We are pleased to post this pre-launch announcement from the Philanthropy Project, and tell you about the whys and wherefores of this effort. We also invite your ideas and reactions.

We don’t need to tell you that this country – and our field of nonprofits and foundations – is undergoing major upheaval.?There are reasons to hope that this next period (with AI, economic uncertainty, looming federal cuts to nonprofit services) would prompt high payouts from foundations, donor-advised funds, and endowments.

By convening the larger nonprofit and foundation community, we intend to:

• Confront the lack of transparency and accountability that exists for the $1.5 trillion dollars held by foundations and donor-advised funds
• Collectively develop principles of philanthropic reform
• Develop federal and state proposals for regulatory and administrative reform
• Free up tens of billions of dollars – for which people have already gotten tax deductions – to be put to active work in communities (a big job!)

Today, a shocking 41% of individual donations go to private foundations, endowments and donor-advised funds – where an unnecessarily large part sits in storage instead of going to active nonprofits serving the public:

• The charitable tax deduction – whereby individuals are incentivized by paying less in taxes if they make donations to nonprofits – is now actually only usable by 10% of taxpayers.
• As U.S. ?society faces deep and urgent crises, the $250 billion is held in DAF charitable funds are held up in financial vehicles with no requirements ever to distribute the funds – and for which wealthy individuals immediately receive tax deductions and wealth advisors assess fees from total assets under management..
• While the DAF mechanism is promoted as democratizing philanthropy, it is increasingly dominated by the financial services industry, with more than half of DAF assets held by just four commercial DAF sponsors.

Our motto: “Charitable funds should benefit the public.”

Part of this message is to let you know about upcoming methods/actions we will be starting next month in December 2024:

• A regular bulletin of developments, analysis and actions in the field
• A website as a source of advocacy, connection, and educational tools/archives, particularly the legal and regulatory aspects of philanthropic reform
• Welcoming contributors to the bulletin and the website
• Briefings and presentations online and at conferences

We – (myself, Jon Pratt and a growing Working Group – see list below) – are starting this new national policy campaign to convene like-minded people who support a diversity of philanthropic vehicles and believe that stronger guardrails are necessary to counter unproductive consequences growing out of the financial and tax systems.

This email is a simple announcement; a regular newsletter will be starting soon and we’ll want to keep you informed..Our website and efforts will be launching in a few weeks. Stay tuned, and connect with us at any tim

— Jan Masaoka and Jon Pratt, Philanthropy Project Co-Chairs

Philanthropy Project Working Group (so far)

Jan Masaoka, Co-Chair

Jon Pratt, Co-Chair

Kari Aanestad, Associate Director, Minnesota Council of Nonprofits

Chuck Collins, Inequality,org, Institute for Policy Studies

Bella DeVaan, Charity Reform Project Director, Institute for Policy Studies

Aaron Dorfman, President, National Committee for Responsive Philanthropy (NCRP)

Jeannie Entenza, Professor, University of Minnesota

Geoff Green, CEO, California Association of Nonprofits (CalNonprofits)

Darryl Jones, Professor, Fordham A&M University Law School

Carolyn Karr, retired attorney

Vu Le, writer, NonprofitAF

Ray Madoff, Professor, Boston College Law School

Pete Manzo, President and CEO, United Ways of California

Ruth McCambrige, Editor-in-Chief Emerita, Nonprofit Quarterly