Donor Advised Funds in Canada, Australia and the US: Differing Regulatory Regimes, Differing Streams of Policy Drift

Donor Advised Funds (DAFs) are the fastest growing destination for charitable giving, and subject to vigorous debate over whether they should be more tightly regulated. Virtually all of the research on DAFs and the arguments for increased regulation emanate from the US. This article compares regulation in Canada and Australia with the US to demonstrate how different regimes lead to different uses of DAFs and different ‘market’ configurations. The conceptual framework presents three motivational scenarios for their use: as pseudo foundations, tax savings and protection of privacy. The differential effects of regulation on these donor scenarios explains why total DAF assets in Australia are proportionately much lower than its North American counterparts, mainly because its regime is not skewed as heavily toward the tax savings motivated donor. The findings raise serious questions as to whether DAFs have actually democratized philanthropy, as is so often claimed. In terms of policy change, all three countries have experienced policy drift, although for different reasons. However, COVID-19 pandemic may have created new windows of opportunity for regulatory reform.