For as long as we can remember, the end of the calendar year has marked the start of America’s giving season.

The holidays that light up our darkest months also invite us to celebrate (and practice!) generosity. Food banks, youth groups, arts and civic organizations, and community service programs heavily depend on the support they receive in November and December.

Year-end giving is big for tax purposes, but many people donate without regard to whether they’ll get a deduction. In fact, fewer than 10% of donors claim a tax deduction for charitable giving.

So, big donors: You want a tax break? Make sure the money gets to a working charity—and fast.

The super-wealthy, who do take advantage of itemizing their tax returns, give differently. They give more to large hospitals and universities, where you can get your name on a building. That kind of giving can be valuable too.

But a less visible difference is crucial to recognize.

Increasingly, wealthy donors are parking money in entities they control, like private foundations and donor advised funds (DAFs). These intermediaries then, in theory, donate money to working charities.

But private foundations are only required to “payout” 5% of their assets a year to these other charities. And DAFs have no requirement to payout at all. So wealthy donors bank their tax break immediately, but the donated funds may remain sidelined for decades.

According to a new report we co-authored,Gilded Giving 2024: Saving Philanthropy from Wall Street, over 35% of all charitable donations now go to one of these two intermediaries.

There’s now $1.7 trillion parked in private foundations and DAFs—money that could be flowing to working charities in a timely way to solve problems. We estimate that by 2028, half of all donations will go to private foundations and DAFs.

As wealth has concentrated in fewer hands over the last four decades, so has this kind of dubiously “charitable” giving—a trend we call........

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