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Monday, June 27, 2016

Think You’ve “Heard Everything”?

The new horror story I read this morning has to do with banking and charitable giving. I want to urge all my friends and readers to get their hands on the July 14 issue of the New York Review of Books and read “The Undermining of American Charity” on pages 17 and 18 (or read here). The authors of the two-page feature are Lewis Cullman, a 97-year-old philanthropist who has given over 90 percent of his wealth to charity in the course of his lifetime, and Ray Madoff, a professor of law at Boston College and director of a philanthropic think tank at BC.

There is plenty of so-called “news” that the public doesn’t really “need to know” at all. This is information you do need.

DAF. Do the letters mean anything to you? They stand for donor-advised funds and are part of a very successful business plan undertaken by major financial institutions.

Say you donate directly to a charity. You will probably want to check its track record and make sure your donation is going to a worthy cause and not simply into administrators’ pockets. What if you have millions or billions to donate? How will you decide where to give and how much and when?

A DAF is a middleman between donors and charities. However much you put into a DAF account, you get an immediate tax break, just as if you’d donated directly to one or a number of charities; the organization, however, can hold your funds indefinitely, enhancing the parent financial institution’s bottom line and collecting management fees.

The story gets worse. By “indefinitely” you must understand no limit to the length of time “donations” can be withheld from waiting charities. You may die, your children may die, and your grandchildren may inherit the job of “advising” the DAF on charitable disbursements – however (BIG “however”), when you put your money in the DAF, you gave up all legal control over it. Courts have upheld the rights of DAF fund sponsors over wishes of donors. Yes.

There’s more, but you need to read the article, especially if you’re really, really rich and think a DAF is the way to make sure you come out as far ahead of the IRS as possible. Don’t be lazy, don’t be cheap, and don’t be stupid. Take responsibility for your own charitable giving and make sure the causes you want to support reap the benefit of your generosity.

Wednesday, June 1, 2016

Mom and Pop Lost Track of Time

Once Memorial Day is past, the days tend to blur into one another until Labor Day. It isn't that Mom and Pop are senile (she insists, somewhat defensively); it's just that they work every single day all summer long, with only calendar numbers to differentiate the days of the week. And so --

Pop: Today's Thursday, isn't it?

Mom: No, it's Wednesday.

Pop: Are you sure? I'm pretty sure it's Thursday.

Mom [now going over to Pop's belief]: No. Darn! I thought it was Wednesday, and I put the garbage out this morning. [It gets picked up on Wednesdays.] Maybe they'll pick up a day late because of the holiday? We'll find out when we get home, I guess.

Pop: I think that's right. Wait a minute, though. Were we supposed to go to dinner last night at your friend's house?

Mom [stricken]: Oh, no!

Pop: Was that for Wednesday or Thursday?

Mom: Wednesday! Oh, no!

Mom reaches for the phone to call friend, preparing an effusive, embarrassed apology in her head.

Pop [calling to Clare in shop next door]: Clare, is today Wednesday or Thursday?

Mom [Looking at her calendar]: It's Wednesday. Thank God!

Another crisis averted in the lives of Mom and Pop!