New York Review of Books: "The Undermining of American Charity"
In New Essay, New York Multimillionaire & Boston Law Professor Share Alarm
NEW YORK, June 22, 2016 /PRNewswire/ -- In "The Undermining of American Charity," an eye-opening essay in the newest issue of the New York Review of Books, philanthropist Lewis B. Cullman and Boston College Law School professor Ray D. Madoff are "alarmed" that traditional American charitable giving is being displaced by the rise of commercial donor-advised funds (DAFs), "undermining our nation's highest philanthropic ideals."
To read the complete essay, go to: www.nybooks.com/articles/2016/07/14/the-undermining-of-american-charity/ .
Financial institutions like Fidelity, Schwab, Vanguard, Goldman Sachs and others have created charitable organizations for the purpose of holding donations, awaiting donors' instructions for eventual charitable distribution. These donations provide maximum tax benefits for donors and management fees for the financial industry, but are subject to no further requirements for their distribution to charity. Unbeknownst to most Americans, these "charitable middlemen" are among the most popular charities in the U.S, having received almost $20 billion in 2014 alone (the most recent year for which statistics are available).
The rise of commercial DAFs is a "bad deal for society," say the authors. According to the most recent annual statistics from the IRS (2012), the overall DAF payout rate is only 7.2 percent – and 22 percent of sponsoring organizations distributed nothing at all. (Although commercial DAF sponsors like to tout a high payout rate, they do not generally use the same method as IRS statisticians.) Cullman and Madoff call on Congress to require donor-advised funds to be distributed within a reasonable amount of time, instead of being allowed to be held for a "someday" future date.
Mr. Cullman, 97, has given away over 90 percent of his fortune – $500 million over the past two decades – and has been a vocal critic of private foundations and DAFs. Ms. Madoff – named "Philanthropy Critic of the Year" by website Inside Philanthropy in January 2016 – is a frequent critic of tax rules that benefit donors and sponsors, but not charities. "The Undermining of American Charity" appears in the July 14 edition of New York Review of Books, published online and mailed to print subscribers on June 21.
For more information - Lewis B. Cullman: www.lewiscullman.com . Ray Madoff: www.bc.edu/schools/law/fac-staff/deans-faculty/madoffr.html . New York Review of Books: www.nybooks.com .
To speak with the co-authors, please contact Michael Shepley at 917-907-2677 or email [email protected]
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SOURCE Lewis Cullman
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