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September 09, 2014

Opinion: Donor-Advised Funds 'Rob' Millions From Charities

A wealthy philanthropist argues in The New York Review of Books for stricter regulation of donor-advised funds, particularly their ability to stockpile donated money for years without distributing it to charities. Lewis B. Cullman says the fast-growing funds "rob our society of hundreds of millions of dollars earmarked for important charitable causes" and primarily benefit the wealth-management firms that run them.

The 95-year-old former financier, who has given away nearly $500-million of his own fortune, has long similarly criticized tax breaks for gifts to foundations that are required to spend little of their assets. "Before I hit 100, I'd like to see all money designated as 'charitable'—which the American government and its people underwrite through tax deductions—get into the hands of those who really need it," he writes.

Mr. Cullman says he plans to attend a symposium on philanthropy reform this month that is being co-organized by Ray Madoff, a Boston College law professor and critic of donor-advised funds.

Read Chronicle of Philanthropy profiles of Lewis Cullman from 2004 and 2006.