What it looks like
Donor-advised funds held about $326 billion in 2024, according to the Annual DAF Report 2025. A contribution may qualify for a tax deduction when made, subject to applicable rules, even though the money may reach a working charity years later. Private non-operating foundations generally have an annual distribution requirement based on 5 percent of net investment assets not used for charitable purposes, with adjustments. Qualifying distributions are not limited to grants.
Why it’s debated
Both sides have numbers. Defenders point out that donor-advised funds granted $64.9 billion to charities in 2024, an aggregate payout rate of 25.3 percent, calculated using prior-year assets. That is not directly comparable to a foundation’s legal minimum. Critics point to the size of the pool and to accounts that rarely grant at all. Foundations argue that holding assets lets them give forever. Critics argue that today’s problems compound while endowments wait, and that the 5 percent floor often works as a ceiling.
No one is to blame
Saving to give later can be wise, especially if better opportunities are coming. The question is whether the timing serves the charitable purpose. This page does not establish that waiting reflects convenience or that every account waits too long.
What we don’t know yet
What is the best rate to spend philanthropic money now versus later? That is Open Problem 12, the Payout Question.
Money set aside for charity moves at the pace the problems demand, and long-term holding is a deliberate strategy rather than a default.