Summer 2026
Simone Joy Friedman, Editor

A program officer at one of our country's largest family foundations once told me she believed that the money used to create the foundation where she worked would have otherwise been paid in taxes. From this belief, she drew the conclusion that the public had a rightful claim to the foundation’s money, and that grants she made should reflect what she judged to be best for the public and not the specific wishes of the donors who had created the foundation.

I have since learned that the belief that foundation money “belongs to the public” is widespread among foundation and nonprofit professionals. Donors and board members, in my experience, are largely unaware of the extent to which buy-in to this belief has occurred.

The belief that private foundations and donor-advised funds (DAFs) are tax shelters that deepen wealth inequality by diverting money from the public has now become the basis for the growing movement of philanthropy abolition. (See, for example, Jennifer Thuy Vi Nguyen's op-ed "I Manage $100 Million at a Foundation. Philanthropy Shouldn't Exist.") If enacted, philanthropy abolition would bar the creation of new foundations and DAFs and require that all funds held in existing foundations and DAFs be distributed to nonprofits within a short window. It is the forced sunsetting of all institutional philanthropy.

Based on the trends I'm noticing of anti-donor sentiment among some on the left and anti-nonprofit sentiment among some on the right, it is not out of the realm of possibility to see philanthropy abolition enacted in some form within the next five to ten years. Supporters of abolition, despite having different motivations, could end up working together. The consequences for the long-term ability of nonprofits to fundraise and fulfill their missions would be severe.

Countering the Narrative

For donors and board members who understand the value of preserving our country’s robust and voluntary civic sector, the good news is that the beliefs underpinning philanthropy abolition are not hard to dispute, as they rest on a misreading of the tax code. And in an irony for those approaching philanthropy abolition from the left, it is likely that abolition policies, if enacted, would result in an even greater concentration of wealth.

A Deduction is Not a Transfer of Ownership

Believing that a foundation or DAF belongs to the public is like believing the home you own belongs to the public because you deduct the interest on your mortgage. The tax code allows certain deductions to encourage people to spend money in ways our country's leaders consider socially useful. Buying a home and giving to charity are two of them.

The key distinction is between a tax deduction and a tax credit. A credit reduces your tax bill dollar for dollar. A deduction only reduces the income on which your tax is calculated.

Here is what this means in practice:

Donate $1,000 to charity and itemize, and you reduce your taxable income by $1,000. If you are in the 35% tax bracket, this means that $350 is the most you can save on your tax bill as a result of the charitable deduction (and in reality, your savings would likely be less due to the way marginal tax rates are calculated). Even assuming you have saved the full $350, you will still have spent $650 of additional money by making the donation. You could instead have paid the $350 in tax and kept the remaining $650 for anything you liked. The same reasoning applies to gifts of appreciated stock.

The person who donates and deducts ends up with less than the person who does not donate and simply pays what they owe.

Similar logic also applies to the estate tax, though the margin narrows. In her book, The Second Estate: How the Tax Code Made an American Aristocracy, Ray Madoff estimates that the donations which created the Gates Foundation carried a tax benefit of roughly 70%, and that Warren Buffett's donations carried benefits of 40% to 60%. Madoff contrasts her estimates with the figures Gates and Buffett have provided publicly, 11% and 40% respectively, and explains the difference by arguing that her numbers combine several possible benefits, including avoiding estate taxes that would have otherwise come due.

Even accepting one of Madoff’s high estimates, a 60% benefit, a very wealthy couple considering placing $100 million in a foundation would still be giving up $40 million their heirs could otherwise receive if the couple chooses not to set aside money for charity by creating a foundation.

None of this is an argument that the current rules related to foundations and DAFs are perfect. In particular, payout requirements deserve a serious look. But reform and abolition are different projects, and the case for one is not the case for the other.

The Irony

Advocates on the left see abolition as a way to reduce inequality, but it would do the opposite. Every dollar a wealthy donor moves into a foundation or a DAF is a dollar that leaves the donor’s family for good, set aside explicitly to help others. Close off that path and after-tax money likely stays where it was, in private hands, passing to heirs.

Foundations and DAFs are, in this sense, already vehicles for redistribution. A donor’s remaining privilege is deciding which organizations receive the money, which is not so different from the privilege of choosing a home to buy.

Philanthropy abolition is a proposal built on a misunderstanding, with consequences that would fall on millions of people. Those in a position to potentially stop it have never heard of it. That is the part worth paying attention to now.

If you are the board member of a nonprofit organization, do you know if your organization offers opportunities to name your existing programs in someone’s memory?

On June 6, 2022, my father, Rabbi Joseph Friedman, died. That night, I messaged Yosef Gillers, Founder and Co-Executive Director of GrowTorah, to ask whether his organization might be able to name a program in my Dad’s memory. GrowTorah builds school gardens and provides hands-on, nature-based learning for Jewish communities, and all of its work carries a commitment to Tzaar Baalei Chayim, the biblical prohibition against causing unnecessary suffering to animals. Tzaar Baalei Chayim was of great importance to my Dad.

Although GrowTorah was an existing grantee of our family foundations, our support had been neither consistent nor large. But I knew the organization well enough to be confident in its governance, and I believed strongly in Yosef as a leader.

Yosef told me that GrowTorah ran a summer internship program that gave college students the opportunity to work with the organization and develop skills that would serve them in future careers. Given that the internship curriculum already included education about Tzaar Baalei Chayim, and that my Dad had found great joy in helping young people as a teacher, tutor, and adjunct law professor, I sensed right away that this would be a good match. The fit was even more meaningful because my Dad had a special appreciation for insects, and GrowTorah called its internship the "Inchwormship."

After we established some basic guidelines, we moved forward with naming the Rabbi Joseph Friedman Inchwormship. I listed it as an option for where friends and family could donate as a memorial tribute, and in a wonderful show of appreciation, GrowTorah received so many contributions that the program's cost was almost entirely covered that first year. I issued a grant to make up the difference, and we then provided support every year after that. The Inchwormship has now been fully funded, multiple years in advance.

What are the lessons for board members of nonprofit organizations?

·         Ask your development team to consider your organization’s existing programs and see whether there might be opportunities to name them in someone's memory. Organizations sometimes think that donors only want naming opportunities for buildings or other physical spaces. This is not true.

·         Take an inventory of all major individual, family foundation, and DAF donors, and see if you are able to identify the motivations and values behind their giving, including the motivations and values of deceased family members who may have helped inspire the donor's philanthropy.

·         For those donors with family members whose motivations and values overlap with your organization's mission, make sure they know that there is the possibility to name a program in a family member’s memory.

·         Do this work now. I reached out within a day of my father's death, and the conversation moved quickly because I already trusted the organization and its leadership. A grieving donor is unlikely to begin building that confidence from scratch.

In addition to opening new sources of funding for existing programs, a naming opportunity in memory of a donor's family member can mean a great deal to the donor. At the end of every summer, I attend GrowTorah's virtual Inchwormship graduation ceremony, where I watch a new group of college students carry forward the values my Dad held dear.