Foundations Set Up by the Rich Increasingly Use Charity Loophole

The flow of money from private foundations to donor-advised funds has jumped substantially in recent years, highlighting the increasing use of a controversial loophole in charitable law, a new audit shows.

Private foundations, which many wealthy people use to administer their philanthropy, gave $1.68 billion to a group of DAF sponsors in the most recent year studied by California Attorney General Rob Bonta’s office. That was 48% more than two years earlier.

The review looked at nearly five dozen sponsors of the funds based in or registered with the state, including commercial providers, community foundations and mission-based organizations. None was identified by name. ...