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At a time of staggering inequality and a fraying social safety net, charity can play a hugely important role in addressing urgent social needs.

Instead, however, a growing number of extremely rich people are using charity mechanisms called donor-advised funds, or DAFs, to claim substantial tax benefits — often without actually supporting the charities addressing those needs.

In “Warehousing Wealth,” a new report we’ve co-authored for the Institute for Policy Studies, we track the explosive growth of these accounts and their perils, and recommend some reforms.

DAFs are holding accounts for high-dollar donors designated specifically for charitable giving. Originally a creation of community foundations, they’ve been adopted and aggressively marketed by a number of for-profit Wall Street firms: Fidelity Investments, Charles Schwab and Vanguard all now offer them.

Read the full article at Inside Sources.

Chuck Collins directs the program on inequality at the Institute for Policy Studies, where Helen Flannery is an associate fellow.