Talking Tax

The National Philanthropic Trust calls donor-advised funds the most popular method of charitable giving—nearly a half-million accounts hold $110 billion in assets. Now a court fight between a wealthy family and a fund to which they donated stock may offer a look into how these funds work. Universities and community foundations run their own charitable funds, but big-name investment managers like JP Morgan, Vanguard, and Fidelity operate them, too. They often convert complex donations—art, stock, or cryptocurrency, for example—into cash that can be given to charities over a period of years, often with tax advantages. The Fairbairns sued Fidelity Charitable, saying the fund violated contract law by promising a sophisticated liquidation and then selling their donated stock too quickly. That caused the value of the stock to plunge, lowering the value of their $100 million donation and the tax deduction they had hoped to receive along with it. Ohio State University professor Brian Mittendorf has been researching d