The review also showed that administrative fees the sponsors charged surged about 40% during the three years to $267 million as assets under management climbed, underscoring one of the DAF industry’s main sources of revenue. Such fees tended to be higher at community foundations than commercial outfits, the review found.
DAF proponents have long argued that donors pay out money from the funds faster than private foundations do. While the California regulator found high rates of grantmaking among the sponsors, some of these distributions are to other DAFs rather than working charities.
Such DAF-to-DAF giving nearly quadrupled to $1.74 billion for commercial providers of the accounts between the first and third year studied. These distributions represented one out of every 10 dollars given away during the three years.
This article was provided by Bloomberg News.