Back in January we wrote about an annual ritual of deceptively shameful self-promotion by the commercial donor-advised fund industry. Donor-advised funds, or DAFs, are giant ‘nonprofits’ affiliated with behemoth wealth management firms that now receive over 20 percent of all charitable contributions by individuals.

These firms have been accumulating assets at an enormous clip, and now house some quarter of a trillion dollars. All of this is money that’s been donated to charity but not yet sent to actual charities. And current laws allow the money to sit there literally forever.

It’s not a good look. Like clockwork these DAF sponsors put out press releases at opportune moments, touting the record sums they’ve given away in the last year — and promoting their affiliated companies’ wealth management services. Set up a giving account with us, they say, and you can get a hefty tax deduction and avoid capital gains taxes altogether.

What they don’t tell you – and what’s never apparent until much, much later, because they refuse to tell reporters either – is that they’re continuing to squirrel away money intended for charities at a far greater clip than they’re giving it away.

The latest entry is Schwab Charitable – the same outfit we profiled in January when they reported on their 2022 figures. Now they’re at it again, this time reporting – or rather, partially reporting – on their 2023 fiscal year, which ended in June. All they give us is the basic number that they granted $5 billion last year. As always, nothing about how much money came in or how much they’re sitting on.

Here’s what Schwab’s history has looked like over the past 10 years (through June 2022):

That red line soaring high above the rest? That shows the growth in Schwab’s assets – the money they’re sitting on. That gray line hiding at the bottom? That’s the grants they’ve given out.

Schwab hardly stands alone in this trend: It holds for virtually all of the largest national DAF sponsors:

And even the relatively small grants figure Schwab shows is exaggerated. It includes money their DAF account holders just move from Schwab to other warehouses like Fidelity. This varies, but amounts to roughly 10 percent of their ‘grants’ each year. Last fiscal year such transfers amounted to more than $330 million; the year before it was $460 million. But for this year’s numbers we’ll have to wait until late next spring to find out; that’s when Schwab’s annual financial filing with the IRS is due, in contrast to misleading press releases.

This shell game of moving money from one DAF account to another isn’t confined to the commercial sponsors: The largest community foundation sponsor in the country plays the same game.

This is just one of the reasons why we need new rules for donor-advised funds. And as we await action by lawmakers and regulators, researchers and journalists need to interrogate industry-presented figures and claims ever more closely as they roll out.