Philanthropic Greed

Silicon Valley gives big to philanthropy, but that money gets locked up, not spent. Defeats the purpose of philanthropy:

Yet Sacred Heart Community Service, a San Jose nonprofit that helps low-income families with food, clothing, heating bills, and other services, actually received less in individual donations from the community in 2017 than it did the previous year. “We’re still not sure what it could be attributed to,” Jill Mitsch, the funds development manager at Sacred Heart, told me. It’s not the only nonprofit trying to keep donations up—the United Way of Silicon Valley folded in 2016 amidst stagnant contributions.

That’s not to say that Silicon Valley’s wealthy aren’t donating their money to charity. ... But much of that money is not making its way out into the community.

There are many reasons for this, but one of them is likely the increasing popularity of a certain type of charitable account called a donor-advised fund. These funds allow donors to receive big tax breaks for giving money or stock, but have little transparency and no requirement that money put into them is actually spent.

...Donor-advised funds are categorized by law as public charities, rather than private foundations, so they have no payout requirements and few disclosure requirements. Because they’re categorized as public charities, donors can give a higher share of their income to these funds than they could to a private foundation, which can help them avoid taxes.