National Philanthropic Trust

Donor-advised fund management organizations, including NPT, have faced significant scrutiny in recent years. Using the DAF model, individual donors can make a charitable contribution for which they receive immediate maximum tax benefits, but can then hold the funds in their accounts indefinitely with no requirement to distribute the gift to actual charities. ² While most DAF accounts shy away from this tax-haven image, NPT has embraced it, boasting about donor eligibility for immediate tax breaks in paid Google ads and across its website. ^{3 2}

Though donor lists and registers of account holders are not made public, NPT has been linked to several high-profile figures, including Google co-founder and left-of-center donor Larry Page and the cofounders of ridesharing service Lyft. ^{4 5}

History

National Philanthropic Trust was founded in 1996 and has disbursed over 311,000 grants totaling more than $7.7 billion to charities on behalf of largely high-net-worth donors. ¹ NPT currently holds over $8 billion in assets under management, ranking it among the largest grantmaking organizations in the United States. ⁶ In 2015, NPT introduced an “impact investing” program to allow donors to use the funds in donor-advised fund accounts to invest in left-progressive “environmental-social-governance” (ESG) organizations instead of giving the money directly to charity. ⁷

NPT offers a range of options for donors looking to take advantage of the DAF model, including foundation-advised funds which allow donors to pool resources for specific causes. ⁸ NPT also works directly with charities or individuals pursuing charitable projects as a “fiscal sponsor,” allowing charities to work under the National Philanthropic Trust’s federal employer identification and to take advantage of NPT’s 501(c)(3) status. ⁹ As part of the fiscal sponsorship arrangement, NPT also offers administrative oversight, grant administration support, and legal and consulting services. ⁹

Donor-Advised Funds

National Philanthropic Trust has managed donor-advised fund accounts since its foundation, encouraging individuals to make charitable contributions through DAF accounts rather than through family foundations or directly to conventional charities. ² On the DAF model, individual donors can make a charitable contribution to National Philanthropic Trust, receive tax benefits immediately, and hold the funds in an NPT account for tax-free growth indefinitely with no legal requirement to disburse the funding to ground-level charities. ²

DAF’s have drawn criticism for offering immediate tax benefits to donors with no requirement that donors ever make payments out of their DAF accounts. ¹⁰ Critics allege that such a scheme allows fund managers, such as NPT, to charge exorbitant management fees on the accounts (whittling away at the initial charitable donation) while allowing donors to reap tax benefits even if their funds are never disbursed for charitable ends. ¹⁰ The controversy has prompted legislation in California in an attempt to require DAF funds to disclose payout rates from each account under management. ¹¹ Even some DAF proponents, including millionaires David and Jennifer Risher, are demanding that DAFs begin to pay out funds, beginning a campaign in 2020 that called on fellow DAF holders to cut the funds in their accounts in half by accelerating charitable disbursements. ¹²

In 2018, NPT paid out just over 20 percent of its total assets to charitable organizations. ¹³ Though most DAFs have sought to distance themselves from the “tax haven” image, NPT has leaned into it. As of late July 2020, when one searches for “national philanthropic trust” on Google, one result can be an NPT paid advertisement offering donors “Immediate Tax Benefits” on their donations. ³ NPT’s DAF page highlights the immediate tax deductions made possible through DAF accounts, mentioning tax advantages three times in just four paragraphs. ² NPT is not shy about the nature of DAFs, explaining to potential donors that NPT’s management fees can be taken directly out of the donor’s charitable donation, rather than having donors pay a separate fee and disbursing the full sum to charity. ⁸

Impact Investing

In 2015, National Philanthropic Trust introduced an “impact investing” program. ⁷ The program offered current and new donors an opportunity to invest their donor-advised fund accounts into four left-progressive-aligned “impact portfolios,” rather than making direct grants to charities. ⁷ Donors can choose between “Broad Social Impact, Economic Mobility, Environmental Stewardship, and Gender Lens” portfolios to support a broad range of companies which advocate for policy positions associated with the United Nations Sustainable Development Goals. ⁷ These include investing in companies seeking to increase wages for low-skill labor, firms financing low-income infrastructure projects, and companies adhering to a range of environmentalist policies. ¹⁴

Rather than investing the money directly in philanthropy, NPT diverts funds placed into one of these portfolios to a range of other “environmental-social-governance” (ESG) organizations, including Parnassus Core Equity Fund and the Calvert Equity Fund. ¹⁴ The available portfolios also funnel money through different investment funds, charging substantial management fees rather than investing the funding directly into charitable endeavors. ¹⁴

Related People

National Philanthropic Trust has donated to a range of organizations across the political spectrum and has been associated with several high-profile donors. In late December of 2019, Google co-founder Larry Page gave $100 million to his DAF account at NPT through his foundation, the Carl Victor Page Memorial Foundation. ⁴ The move instantly drew criticism as a sleight of hand to avoid tax penalties after Page’s foundation failed to meet the minimum 5% payout rate for a family foundation, triggering last-minute donations into DAF accounts at NPT and Schwab Charitable. ⁴ Page is a noted left-of-center donor, also giving to the New Venture Fund that same year. ⁴ In August of 2019, Logan Green and John Zimmer, co-founders of Lyft, also donated more than 1.5 million company shares to NPT. ⁵