2. COVID-19 spurs generosity among holders of donor-advised funds
It's been a remarkable year of philanthropic payouts for donor-advised funds (DAFs), which let people take an immediate tax deduction by putting money into an account earmarked for future charitable donations.
Why it matters: DAFs often take heat because people can park money there indefinitely, reaping the initial tax benefit without donating to good causes. More than $1 trillion sits in private foundations and $120 billion in donor-advised funds rather than being distributed to charities.
- In 2020, both contributions to DAFs and distributions from them rose.