By the end of 2021, total assets in US donor-advised funds had grown to an estimated $230 billion, up from under $100 billion just five years earlier. The growth was driven by a combination of capital-market appreciation, accelerated post-TCJA bunching strategies, and the entry of large national-scale DAF sponsors — Fidelity Charitable, Schwab Charitable, and Vanguard Charitable — into the wealth-management mainstream.
In the same year, ProPublica published the first installments of a series based on internal IRS records covering thousands of the wealthiest American taxpayers over more than fifteen years. The records, which the publication said had been leaked anonymously, allowed for empirical analysis of high-net-worth giving behavior at a level of granularity that had never before been publicly available.
What the leak revealed about high-end giving
The picture that emerged from the leaked data was nuanced. Some of the wealthiest American households gave substantial portions of their incomes to charity during the years covered, often through DAFs and private foundations they controlled. Others gave very little. There was no observable correlation between wealth and giving rate among the top ten thousand taxpayers.
What the data did show, very clearly, was that most very large gifts went to vehicles the donor controlled — private foundations or DAFs — rather than to operating charities directly. The donor took the deduction at the moment of contribution to the vehicle. The funds then accumulated in the vehicle and were distributed to operating charities on a schedule determined by the donor.
For private foundations, federal law requires a roughly five percent annual payout. For donor-advised funds, federal law requires no payout at all. A DAF can hold contributed assets indefinitely, with grants made at the donor’s discretion or, ultimately, at the discretion of the donor’s named successors.
The "warehousing" debate intensified
The combination of the asset growth and the leaked data sharpened a policy debate that had been simmering for several years. Critics argued that DAFs allowed wealthy donors to capture the deduction in the contribution year while indefinitely deferring the actual transfer of funds to working charities. Defenders argued that DAF accounts are not in fact warehouses — that aggregate payout rates from DAFs run between fifteen and twenty percent annually, far above the foundation requirement.
Both sides were partly right. Aggregate payout rates were indeed high, but they were averages across millions of accounts — meaning that a small number of very large, very low-payout accounts could be obscured by the activity of many smaller, more active accounts. The aggregate did not tell the policy-relevant story about whether the largest pools of charitable capital were being deployed.
Legislative proposals that followed
Senator Charles Grassley and Senator Angus King introduced the Accelerating Charitable Efforts (ACE) Act, which would have imposed a payout schedule on DAFs (typically requiring distribution within fifteen years of contribution) and tightened private-foundation rules around gifts to DAFs. The proposal did not advance out of committee. Variants would be reintroduced in subsequent congresses.
The Treasury Department, under separate authority, opened a regulatory process on DAFs in late 2023 that produced the first proposed federal regulations specifically governing the vehicle since its codification by the Pension Protection Act of 2006. The regulatory conversation continued into the mid-2020s without producing final rules.