---
title: Parked Money
number: 9
summary: Donor-advised funds hold assets already under charitable control. How quickly those assets should reach operating work is debated.
evidence: debated
node: channels
flip: Money set aside for charity moves at the pace the problems demand, and long-term holding is a deliberate strategy rather than a default.
sources:
  - title: DAF Assets Soar 30% to $326 Billion
    publisher: The Chronicle of Philanthropy, reporting the Annual DAF Report 2025 by the DAF Research Collaborative
    year: 2025
    url: https://www.philanthropy.com/news/daf-assets-soar-30-to-326-billion/
  - title: The Annual DAF Report 2025
    publisher: Johnson Center for Philanthropy
    year: 2025
    url: https://johnsoncenter.org/resource/report-annual-daf-report-2025/
  - title: Taxes on failure to distribute income, private foundations
    publisher: Internal Revenue Service
    url: https://www.irs.gov/charities-non-profits/private-foundations/taxes-on-failure-to-distribute-income-private-foundations
  - title: Annual DAF Report 2025, full report
    publisher: Donor Advised Fund Research Collaborative, Indiana University repository
    year: 2025
    url: https://scholarworks.indianapolis.iu.edu/server/api/core/bitstreams/8f309b9f-da38-433e-8c33-bc1b3d1f9a1a/content
---

## 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](/open-problems/the-payout-question/).