Jewish Donor-advised Funds Perform Poorly Compared to U.S. Sector

Donor-advised funds are the fastest growing method of philanthropy that you’ve probably never heard of, but critics say they make it too easy for donors to reap the rewards of tax-deductible contributions without the money going directly to a charity.

There are questions about the performance of Jewish donor-advised funds, which appear to have lagged behind their peers in recent years, in terms of contributions, assets and grants.

The National Philanthropic Trust, which analyzes the year-end filings of donor-advised funds, found that in fiscal year 2010, the average U.S. fund had regained its assets to almost equal pre-recession highs. But a Forward analysis of tax returns from almost 80 Jewish donor-advised fund programs found that assets among the largest 10 funds during the same period fell 10%. Among Jewish funds nationally, assets fell by almost 20%.

Jewish donor-advised funds
National Philanthropic Trust / IRS Records / Forward

Jewish funds also fared poorly in terms of contributions. While contributions to donor-advised funds fell 16% nationwide between 2007 and 2010, in the Jewish community they fell by 30%.

Many Jewish fund executives blamed the recession and low investment performance for the slowdown, though it is unclear why those conditions did not similarly affect the non-Jewish funds.

Read more at the Forward.