Donor advised funds are the fastest growing part of the charity landscape, and with reason: They offer an immediate tax benefit, they make it easy to donate appreciated stock, and donors have unlimited time to allocate the monies to charities.
That's all well and good for charities when the funds actually leave the accounts and go to good causes, and in many accounts, they do. But with no deadline for disbursing contributions, the money in some donor advised fund accounts stays for years.
That's why the matter of orphan donor advised fund accounts is coming into focus. While still only a tiny fraction of the assets in donor advised funds, the money in these accounts — left behind when a donor dies without naming beneficiaries or setting up a clear plan for the assets — has nowhere obvious to go.
The fund companies that administer donor advised funds "say it's a relatively small issue," said Stacy Palmer, editor of the Chronicle on Philanthropy. But they are not required to disclose anything about the number or size of such accounts, she said. "It's one of those unknown things."