Comment from Brown, Chuck

As a former development officer at one of the largest DAF sponsors in the country who helped open over 100 DAFs during my tenure there, I think the biggest thing that keeps getting overlooked in these proposed regulations is that the "donor advisor," in reality, exerts significantly more control over their fund than the law should allow. The donor advisor is only meant to recommend grants out of their DAF, but in reality, their recommendations are always followed except in extraordinary circumstances. So the donor advisor, in practice, is personally directing all grantmaking out of their DAF. The donor advisor is only meant to recommend how the funds in their DAF should be invested, but in reality, they have significant leeway to determine the investment strategy, can change the investment allocations of their fund on a regular basis, and if they open a fund of a certain size ($1M or more in the case of my former employer), they can recommend their own investment manager to manage exactly how the funds are invested. I processed multiple requests where a donor advisor and/or their financial advisor sought to use DAFs strategically to make gifts of company stock or cryptocurrency that would only be gradually liquidated over time, attempting to maximize their tax savings and minimize the impact on the value of those assets that weren't being gifted into the DAF. So the donor advisor (especially those who advise larger funds), in practice, is personally directing how the funds in their DAF are being invested. I think it would be fair to say that what we are actually talking about isn't donor "advised" funds but rather donor "directed" funds. I am not a legal expert, but I suspect that a closer study of how the majority of DAFs are being used in the real world would reveal that they are out of compliance with the law. The donor advisor is still in control of their gift in too many ways. Funds can sit in a DAF in perpetuity, only to the benefit of the DAF sponsor and investment manager who continue to receive their fees, so I can't see how a donor that refuses to makes grants out of their DAF over an extended time can be said to have made a "completed gift". I appreciate the efforts being made here, and at the same time I encourage all parties to take a harder look at what I perceive - from having worked on the inside - to be systemic non-compliance with the law.