Many Donor-Advised Funds Don’t Disclose Executive Pay

by Gary Snyder    

Seven of the nation’s 11 largest donor-advised funds controlling more than $30 billion in assets don’t report the pay of their highest executives, according to an analysis by The Chronicle.

Donor-advised funds belong to a special category of charity that is growing fast. The funds are subject to federal pay-disclosure laws like every other tax-exempt group in the United States.

Experts say the funds probably aren’t doing anything illegal by not reporting executive pay, but many say they are violating the intent of federal rules and laws intended to bring transparency to the nonprofit world.

"This is not transparency. The public should know what’s going on," says Dean Zerbe, a former aide to the Senate Finance Committee, where he investigated charities.

Donor-advised funds collect money from individuals who get an immediate tax deduction and then can channel that money to any charity they want at any time.

The Schwab Charitable Fund and the Vanguard Charitable Endowment Program (the second and third largest commercial donor-advised funds in the country by revenue) reported paying their presidents $600,000 and $314,000, respectively, in calendar year 2013, according to the organizations’ 2014 Forms 990.

Renaissance Charitable Foundation, which is affiliated with Renaissance Administration LLC, a for-profit charitable-services provider in Indianapolis, reported paying its leader $89,292 in 2014. The Ayco Charitable Foundation reported paying John Mastriani, its president and a member of the Board of Directors, $8,500 in 2015, during which time he reported working two hours a week at the charity.

Representatives of the Morgan Stanley Global Impact Funding Trust, U.S. Charitable Gift Trust, the Bank of America Charitable Gift Fund, and the Raymond James Charitable Endowment Fund declined to comment or did not respond to repeated requests for comment from The Chronicle.

Mr. Zerbe, who left Capitol Hill to be National Managing Director at Alliantgroup, which helps businesses find tax credits and incentives, also is skeptical that volunteers lead the donor-advised funds. "These things aren’t running on autopilot," he told The Chronicle.

Mr. Zerbe, who helped craft the 2006 Pension Protection Act, which overhauled many of the laws governing nonprofits, says executive pay should be reported even if it isn’t necessarily legally required. If it isn’t listed on the 990, Mr. Zerbe says, it should be posted on the nonprofit’s website. "Salaries and compensation are a cornerstone of the 990," he says.

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