JEFF POWERS was raised as “a good Catholic boy”. So when he sold his wall-fastener business in 2012 for $225m, he wanted to give back. And, like many philanthropists, he started close to home. He donated to the hospital where his son had spent months recovering from a car accident. He helped pay for a swimming pool at his children’s school. Today he supports all sorts of causes, from scholarships in Florida to soup kitchens in New York.
The way Mr Powers finances these projects would strike old-school charitable types as odd. Traditionally, a budding philanthropist would either give directly to a charity or set up a foundation. But Mr Powers uses a donor-advised fund (DAF), a type of account held by a non-profit entity, in this case Bank of America Charitable Gift Fund, an arm of the bank. DAFs are taking root in Britain and Canada, but they are primarily an American phenomenon.
DAFs are way-stations for donor dollars. Mr Powers deposits some money into his DAF and, while he ponders where it should go, Bank of America invests it for him. At some point he will suggest a beneficiary and, as…Continue reading