Two African American men shaking hands.

Rewiring Donor Advised Funds to Move More Money to Frontline Nonprofits

October 9, 2019
Amalgamated Foundation

10% Giving Pledge

From the beginning, the Amalgamated Foundation has been guided by a belief that the systems of philanthropy, and donor advised funds specifically, need to be re-wired to move resources more actively and efficiently for social good. While private foundations have an annual payout requirement of 5%, donor advised funds (DAFs) have no such payout requirement. Without a payout requirement, DAF providers – particularly those connected with major financial institutions – can be more focused on accumulating assets and providing donors tax benefits than charitable giving.

To ensure that Amalgamated DAFs live up to the “Advance Change Fund” name, we launched the Giving Pledge, to encourage our donors to grant out a minimum of 10% of their assets annually.  Since we launched in 2018, the Giving Pledge has been a huge success. We have accepted more than $54 million in contributions and granted out more than $27 million – an aggregate payout rate of 50%, ten times the payout rate of private foundations.

We are happy to be part of a growing movement to take on the issue of DAF payouts. Organizations like the Patriotic Millionaires are calling for the IRS to require an 10% payout on DAFs. More boldly, a group of donors has launched HalfmyDAF, to encourage donors to step up and spend down half their DAF to address the urgent crisis of the COVID pandemic and the growing movement to advance racial justice. With our 50% payout rate, our donors are already there!