Advocacy: DER & AFP AB 1712 Letter

November 4, 2019

The Honorable Mark Stone,  Chair Assembly, Judiciary Committee
1020 N Street, Room 104
Sacramento, CA, 95814

Re: Assembly Bill 1712 (Wicks) Donor Advised Funds- SUPPORT

Dear Chairman Stone:

Development Executives Roundtable and The Association of Fundraising Professionals
(AFP) Golden Gate Chapter strongly support AB 1712 (Wicks), which requires organizations
that sponsor donor advised funds (DAFs) to report additional information about their DAFs,
subject to new rules and regulations developed by the California Attorney General’s office.
DAFs have grown significantly over the past several years. The national share of total
individual charitable giving contributed to DAFs increased from 4.4% in 2010 to 10.2% in
2017, and DAF sponsoring organizations held more than $110 billion in charitable assets in
2017. This trend is alarming and controversial because:

• The State of California spends millions of dollars annually on tax expenditures
  resulting from charitable contributions made to DAFs – while many operating
  nonprofits that provide vital benefits to California communities struggle to obtain
  the funding they need to stay afloat.
• Recent media coverage of DAFs suggests that some DAFs provide substantial
  benefits to Wall Street financial firms and their wealthy clientele, while providing
  relatively few benefits to grassroots charitable organizations.
• Despite their rapid growth and prevalence, very little is known about the rates at
  which DAFs distribute funds or where or to what causes those funds are given.
  Recent analyses express concerns about the impact of DAFs on nonprofits and
  communities – especially DAFs held by for profit firms like Schwab and Vanguard –
  so the need to understand their impacts has become imperative.
• News reports indicate that in some cases political donors may be using anonymity
  provided by DAFs to conceal their support for candidates, ballot measures and other
  efforts to influence policy or the public.

The current lack of transparency around DAF giving makes it difficult to determine the
accuracy of these critiques. By gathering more reporting and financial information about
DAFs to determine levels of contributions and disbursements, AB 1712 will help
policymakers and members of the public analyze how much charitable benefits DAFs
produce and understand what entities manage them and how they are managed.
As two nonprofit membership organizations dedicated to providing exceptional
fundraising education in the San Francisco Bay Area, Development Executives Roundtable
and AFP-Golden Gate believe that thoughtful regulation will help to assure good
stewardship of charitable funds. We strongly support AB 1712 and urge you to vote in
favor of this vitally important legislation.

Sincerely,

Christine Poremski Rodrigues

President, Development Executives Roundtable

Chandra Alexandre

President, Association of Fundraising Professionals Golden Gate Chapter