Fidelity Case Tests Big Philanthropy Question on Tax Break (1)

The outcome of a much-watched lawsuit between Fidelity Investments Charitable Gift Fund and shuttered San Francisco investment adviser Ascend Capital is likely to clear up important questions surrounding donor advised funds.

Donor advised funds, a fast-growing form of charitable giving, allow donors to contribute money, or complex assets such as stock or cryptocurrency, and have the donations distributed to charitable causes by the charitable sponsor of the fund—in this case Fidelity Charitable. Contributions to the funds totaled $37.12 billion in 2018, an 86% increase over five years, according to the National Philanthropic Trust.

The owners of Ascend Capital, ...