Donors Want Level Playing Field for Private Foundations, Donor-Advised Funds

Eighty-six percent said donations to private foundations and DAFs should enjoy the same tax treatment, while 65% considered the 5% minimum distribution requirement for private foundations "just right," and 57% said DAFs should be subject to a similar requirement.

Seventy-two percent of the survey sample approved of the fact that private foundations are required to publicly disclose the names of their major contributors and grant recipients, and 47% said the same regulation should also apply to DAFs.

It should be noted here that one of DAFs' key selling points is that donors can remain anonymous. In the survey, 55% of DAF owners disagreed that disclosure should be required.

Sixty-six percent of all respondents supported the current rule that allows the donation of funds from a private foundation to a DAF. Conversely, 46% said they should be able to donate funds from a DAF to a private foundation, something that is not allowed at present.

"Although donor-advised funds and private foundations allow for different degrees of philanthropic flexibility and control, many individuals and advisors see them as almost interchangeable," Snow said.

Both facilitate a planned approach to charitable giving, enable donated funds to grow in a tax-advantaged environment and provide for a same-year income tax deduction for contributions.

"Perhaps these similarities explain why survey respondents favored comparable regulation and tax treatment," Snow said.