Common-Sense Philanthropic Reform

Solidaire Action is proud to co-sponsor the Donor Revolt for Charity Reform campaign spearheaded by a coalition of visionary philanthropists, national funders and policy organizations demanding common-sense reforms to address wealth hoarding within philanthropy. 

The inaugural signers include over 160 prominent philanthropists, many of whom are leaders within Solidaire’s membership. Other co-sponsors of the campaign are leading organizations addressing wealth inequality on a national scale including Patriotic Millionaires, the Institute for Policy Studies, Inequality.org, the Excessive Wealth Disorder Institute, Resource Generation, the #HalfMyDAF Campaign and the Decolonizing Wealth Project.

The Donor Revolt calls to action are straightforward and intuitive, but they would profoundly impact the redistribution of wealth:

To reform private foundations, we should: 

  • Increase the minimum payout requirement from 5% to 7% to discourage donation warehousing (and increase it to 10% for private foundations with assets over $50 million)
  • Cap management expenses counted toward payout at 1% of assets
  • Exclude compensation to family members from payout calculations
  • Exclude private foundation grants to DAFs from counting towards payout

To reform donor-advised funds (DAFs), we should: 

  • Require DAFs to pay out funds within five years of receipt
  • Exclude DAF grants to other DAFs from counting toward payout
  • Require sponsors to report on DAFs on an account-by-account basis
  • Change the tax benefits for DAFs to match those of private foundations

To reduce top-heavy philanthropy, we should: 

  • Limit the estate tax charitable deduction to a percentage of the estate's value, with a lower percentage for gifts to private foundations and DAFs
  • Provide a charitable tax credit for non-itemizers

Leah Hunt-Hendrix, Solidaire co-founder, author and inaugural campaign signer, reminds us “Donors and patrons reap uncritical plaudits for their generosity without prodding the discourse toward any serious discussion for the sort of change that might produce a fairer society in which billionaire philanthropists no longer exist. We need Solidarity, in contrast to charity and philanthropy.”

“Donors and patrons reap uncritical plaudits for their generosity without prodding the discourse toward any serious discussion for the sort of change that might produce a fairer society in which billionaire philanthropists no longer exist. We need Solidarity, in contrast to charity and philanthropy.” - Leah Hunt-Hendrix, Solidaire co-founder, author and inaugural campaign signer
"I'm most interested in helping to build a world in which the resources and the power aren't extracted and consolidated in the first place" - Farhad Ebrahimi, Solidaire board member and founder of Chorus Foundation

The campaign follows a recent Ipsos poll commissioned by Inequality.org and The Giving Review showing overwhelming support among Americans across the political spectrum for basic charity reforms. For example, 83% of participants agree that taxpayers shouldn’t have to subsidize wealthy Americans to create permanent legacy foundations, and 71% agree that Congress should raise the annual foundation payout from 5% to 10%. 

The campaign’s call to action is also bolstered by a new report from the Institute for Policy Studies titled "Who Is Lobbying against Common-Sense Charity Reform?” which shows that since 2018, 21 for-profit firms and nonprofit organizations have spent a combined $11 million to lobby around DAF reform. These include DAF sponsors affiliated with investment firms Fidelity, Schwab and Vanguard and an association of community foundations.

Since 2018, 21 for-profit firms and nonprofit groups have spent an estimated $11 million to lobby around DAF reform. An estimated $3 million of that total was spent to defeat the ACE act.