Donor Advised Funds & Delay: An Intergenerational Justice Solution?

1 Introduction

Philanthropic intermediaries in the form of ‘donor advised funds’ (DAFs) are the fastest growing recipients of charitable donations in the United States, with the largest DAF sponsors rivalling the size of the endowments of universities such as Harvard and Yale (Hopkins 2020: Ch 1). While not at the same scale, they are also increasing in popularity in other countries, especially Canada, but also the United Kingdom (UK) and Australia (Murray 2020: 263–4; Phillips, Dalziel, and Sjogren 2021). When considered as substitutes for private foundations or as (temporal) substitutes for public charities (see, e.g. Colinvaux 2017; Murray 2020), DAFs have a number of potential advantages and disadvantages. Noteworthy advantages include their administrative simplicity and lower cost, their flexibility, ability to permit on-going donor involvement and, potentially, expertise in handling non-cash donations (Colinvaux 2017; Grennan 2022; Murray 2020). The most commonly identified disadvantage is the potential – inherent in DAF’s role as intermediaries – for there to be ‘too much’ delay between the DAF receiving a donation and the DAF distributing the funds onto a charity to more directly employ the funds in carrying out charitable activities (see, e.g. Colinvaux 2017; Galle 2016; Madoff 2014; Special Senate Committee on the Charitable Sector 2019).

While there may be legitimate reasons for delay, this concern underpins the work of the Accelerating Charitable Giving Initiative and is the reason that United States Senators Angus King and Chuck Grassley introduced Senate Bill 1981 (the Accelerating Charitable Efforts Act, or ‘ACE Act’) which would cap the time for distributing DAF contributions at 15 or 50 years, with more generous tax treatment for donors opting into the 15 year model.^[1] A corresponding Bill was introduced in the House of Representatives in February 2022: House Bill 6595. The rationale for the ACE Act is to:

ensure Donor-Advised Funds make resources available to working charities in [a] reasonable period of time (King 2021).

Views and empirical data about whether there is in fact ‘too much’ delay appear mixed, as set out in Section 2 below. However, it is clear that while many DAF sponsors make substantial distributions on an aggregate basis, there is significant heterogeneity, with a substantial minority of DAF accounts paying out nothing in a given year. Further, discussion about whether there is ‘too much’ delay typically lacks a normative reference point.

This article unpacks intergenerational justice to address that reference point gap. Intergenerational justice has recently been applied to the accumulation of assets by charities more broadly (Murray 2021) and in particular to philanthropic intermediaries in the form of foundations to justify, and limit, accumulation (Cordelli and Reich 2016: 228, 234–8; Reich 2018: Ch 5). There are various alternative conceptions of intergenerational justice principles, but a ‘sufficientarian’ interpretation is proposed as the preferable approach for DAFs.

If intergenerational justice principles are adopted as a reference point for judging whether DAF sponsors unduly delay the direct application of donations, this directly raises a secondary question about how to incorporate those principles into our social institutions. While there are some advantages, there are also material impediments to implementing intergenerational justice principles via payout rates or time limits or by way of the tax and transfer system. This is partly due to the range of potential reasonable interpretations of intergenerational justice principles.

An alternative method for implementing intergenerational justice explored in this article is a procedural approach. That is, ensuring that charity directors or trustees genuinely consider on a principled basis when their charity should deliver benefits to the community. Such an approach has advantages for a sector as heterogeneous as the charity sector, which appears to be reflected in the heterogeneity of DAFs. It also reminds us of a unique aspect of DAFs. That is, while donors retain advisory privileges, the DAF sponsor owns the assets and legally decides what to do with them. Reminding DAF sponsors of their rights and duties when exercising their discretions to disburse or retain DAF contributions can unlock other mechanisms for addressing concerns about delay.

While intergenerational justice is relevant to the broader charity sector, this article focuses on DAFs because they are one of the fastest growing philanthropic forms and, as philanthropic intermediaries, they encompass the potential for delay. Further, while wealth disparities within the current generation raise pressing issues of intragenerational justice, they are beyond scope.

The article is therefore structured as follows. Section 2 explains what a DAF is and provides some context about delay. Section 3 outlines the principle of intergenerational justice, why it should apply to DAFs and why a ‘sufficientarian’ interpretation is preferred for DAFs. Section 4 examines how the principle might be implemented for DAFs, focussing on a procedural approach that requires DAF sponsor directors and trustees to give due regard to sufficientarian principles, as reasonably understood by them, when making accumulation and spending decisions. Section 5 concludes.

2 DAFs and Delay

In each of the United States, Canada, the UK and Australia, a DAF or ‘sub-fund’ is not itself a separate legal entity, but rather a management account maintained by a legal entity – a public charity. In some jurisdictions that legal entity is more likely to be a charitable corporation (e.g. the United States), in others, it is more likely to be a trustee, with the DAF or sub-fund maintained within the charitable trust (e.g. Australia) (IRS 2022; Murray 2020; Special Senate Committee on the Charitable Sector 2019: 109–13). The arrangement between the donor and the charity is that the donor retains no ownership interest in donated property, but that the charity will provide administrative assistance to the donor and will grant the donor advisory privileges (including on investment options). The advisory privilege is an ability for the donor to recommend to the charity when to distribute donated property and to whom, amongst a list of eligible recipients. Accordingly, while donors have no right to direct the distribution of property, there is an incentive for the legal entity, or ‘DAF sponsor’, to act in accordance with lawful recommendations so as to encourage future donations. For DAF sponsors with affiliated financial services firms providing wealth management advice to the same donor, there can be an even stronger commercial incentive to follow the donor’s wishes (Murray 2020).

The degree of incentive to follow a donor’s wishes – and potentially countenance delay – might well therefore be influenced by the form of the DAF sponsor. For instance, community foundations that are charities with purposes focussed on a particular geographic region or universities that maintain DAF accounts may have other constituencies that apply pressure to distribute funds more quickly than do DAF sponsors that are national financial services organisations. Nevertheless, as the data and commentary below demonstrate, concerns about DAF delays apply to all DAF sponsors, even if the concerns are enhanced for some types.

Such concerns led to the ACE Act referred to in the Introduction and are a key reason for the recent Canadian government consultation on increasing the disbursement quota that applies across the board to Canadian tax-registered charities (Blumberg and Lang 2021; Department of Finance 2021; Special Senate Committee on the Charitable Sector 2019: 110–113). Ultimately, the government decided to increase the rate of the disbursement quota in a graduated fashion so as to ‘boos[t] charitable spending’ (Canadian Government 2022: 196).

The empirical data, most of which comes from the United States, paints a mixed picture. Some commentators suggest that when compared with private foundation or charitable endowment payout rates, DAF aggregate payout rates compare favourably (Heist and Vance-McMullen 2019; Hopkins 2020: 255–260). Heist and Vance-McMullen have also pointed to ‘flow rates’ of contributions being converted into grants for DAFs that are high compared to private foundations (2019). Others point to large distortions in the typical commercial DAF sponsor calculation of the payout rate and to substantial DAF to DAF distributions, which are often counted as part of the payout (Andreoni and Madoff 2020; Flannery and Collins 2021). The ‘flow rate’ has also been criticised as failing to show whether DAF assets are increasing or decreasing (Andreoni and Madoff 2020).

Two things are, however, clear. First, while many DAF sponsors make substantial distributions on an aggregate basis, a substantial minority of DAF sponsors pay out less than 5% in a given year (Andreoni and Madoff 2020; Arnsberger 2015: 62). This heterogeneity is even more pronounced at the DAF account level, with a recent study by the Council of Michigan Foundations (focussed on community foundations) finding that 35% of Michigan DAF accounts paid out nothing in the COVID-year of 2020 (Williams and Kienker 2021). Vance-McMullen and Heist’s larger DAF account level study (which focussed on community foundations and religious organisation sponsors, not financial services-linked DAF sponsors) also found that just under 30% of DAF accounts paid out nothing in a given year and that 35% of DAF accounts paid out less than 5% per year over a four year period (Vance-McMullen and Heist 2022). These findings are broadly consistent with Steele and Steuerle (2015: 6–7).

Vance-McMullen and Heist also found that around 10% of DAF accounts were formally designated as ‘endowed’ meaning that they were explicitly intended to last for the very long term, with a further proportion of account holders informally treating their DAF account like an ‘endowed’ account (Vance-McMullen and Heist 2022: 14, 24). Over 20% of DAF accounts were thus predicted to still be making distributions from their original contributions over 20 years later (Vance-McMullen and Heist 2022: 26). Williams and Kienker found an even higher percentage of endowed DAF accounts (over 50%) in their study of Michigan community foundations (2021: 21–22). In the Canadian context, it has also been suggested that while DAF sponsors have payout rates averaging between 12 and 17%, no distributions at all may be made for many years from a substantial minority of DAF accounts (Sjögren 2018: 91).

Second, discussion about whether there is ‘too much’ delay typically lacks a normative point of reference (other than sporadic references to agency costs – see, e.g. Galle 2021). Typically the reference point is the payout rate or flow rate of private foundations.

3 Intergenerational Justice

As intermediaries, DAF sponsors inevitably result in some delay in the application of donations. Building up funds in this way can enhance public benefit by supporting the sustainability of services, pluralism, effectiveness and efficiency, including in realizing illiquid assets (Murray 2021: Ch 2; Hemel, Bankman, and Brest 2021: 291–292; see also Reich 2018: 184–90 in relation to the role of foundation accumulation). As DAF assets are invested, they may also grow at a faster rate than inflation (Hemel, Bankman, and Brest 2021: 291; Klausner 2003). Further, as argued by Reich, an independent (from government) source of support for the charity sector and for altruistic modes of acting can, at a societal level, also help the reproduction of social capital (2018: 179–84).

However, accumulation means that the delivery of some benefits will also be deferred; with the data in Section 2 indicating that deferral may take place along intergenerational timelines in respect of a substantial minority of DAF accounts. A focus on the sustainability and longevity of the charity itself may also result in decreased attention to potential benefit recipients in the current generation or to efficiency in distributing benefits (Murray 2021: 38–9). Using intermediaries also adds the risk of increased agency costs (Galle 2021). Further, if a small group of intermediaries, such as DAF sponsors start to receive very material portions of annual donations and to hold material portions of charity sector assets – which corresponds to the maturing DAF sector in the United States – the effect is likely to be that a material portion of these assets are temporally displaced from operating charities. This has the potential to reduce the financial resilience of operating charities due to their lack of control over when and whether they will receive DAF distributions (compare Cloutier 2005: 99).

The benefits and harms from building up funds in DAFs can make us question whether this accumulation enhances the net public benefit and whether the accumulation is – or to what extent such accumulation can be – fair as between different generations. Especially so as, aside from intergenerational deferral within DAF accounts, DAF sponsors themselves would be expected to last for long periods of time. The concerns can be viewed as concerns about whether the current DAF settings reflect a fair system of social cooperation (see e.g. Murray 2020; Klausner 2003).

‘Intergenerational justice’ is a normative basis that could be used to determine what is a ‘fair’ balance between generations to determine the extent to which DAF rules should demand public benefit for the present generation or permit accumulation for the benefit of future generations (Murray 2020). After all, from a social contract perspective, the notion of ‘justice’ is intended to articulate ‘principles that provide a public basis for justification all [members of the society] can accept, in order to sustain willing social cooperation’ (Freeman 2007: 24). Theories of intergenerational justice set out the obligations owed by the present generation in relation to people in the past and the future (Gosseries and Meyer 2009; Tremmel 2006), with most theorists giving equal consideration to present and future persons (Klausner 2003: 54; Rawls 1999, 259–62).^[2]

This Part explains that there are various interpretations of intergenerational justice, but expresses a preference for ‘sufficientarian’ approaches as these better allow for the potential institutional role of DAFs in supporting the reproduction of social capital and supporting long-term and risky approaches. Additionally, ‘sufficientarian’ approaches encompass the existing approaches of Cordelli, Reich and Rawls discussed below, and align with common approaches to the narrower question of the distribution of decision-making freedom between generations.

It is to intergenerational justice that Reich and Cordelli turn to evaluate and shape the use of private foundations (Cordelli and Reich 2016; Reich 2018). They apply a particular conception of intergenerational justice, John Rawls’ ‘just savings’ principle, which requires society to preserve capital so as to enable the establishment and then maintenance of ‘just institutions’ (Rawls 1999: 251–8). These ‘institutions’ or the ‘basic structure’ of society are the ‘main political and social institutions of society [that] fit together into one system of social cooperation, and [that] assign basic rights and duties and regulate the division of advantages that arises from social cooperation over time’ (Rawls 2001: 10–12). ‘Just institutions’ are those that assign rights and duties and divide advantages in ways that formally and substantively correspond to principles that enable public justification of social cooperation (Rawls 1999: 47–52).

Reich and Cordelli argue that private foundations have a role in establishing and maintaining just institutions because they enable: the reproduction of social capital (by supporting civil society over time); accumulation of resources so as to respond to remote catastrophic risks to society; and social innovation and problem solving due to the long-term and risky approaches that are open to them as a result of limited accountability mechanisms and lack of a profit motive or political cycle (Cordelli and Reich 2016; Reich 2018: Ch 5). They therefore recommend that foundations should spend or accumulate assets to pursue these three functions.

However, as set out above, there are reasons to question whether a large DAF sector, which temporally displaces direct donations, supports or weakens civil society by undermining its financial resilience. It is also open to question whether a management account from which distributions can be made to a list of potential donees is likely to lead to the degree of social innovation and problem solving that might be anticipated from private foundations with their own staff and funding programs. In a recent analysis of a United States-wide data set of DAF sponsors, Grennan discusses some innovative features of DAF sponsors, focussing on the way in which a minority of DAF sponsors offer matching/vetting services for pools of recipients aligned to donor interests and aimed at addressing inequality and promoting diversity, as well as offering impact investing before distribution (Grennan 2022). This provides some evidence of a longer-term focus (e.g. via impact investing) and of risky approaches (e.g. by way of increased grants to charities serving more marginalised groups). Yet at present, this seems a far cry from long-term risky investments such as the Gates Foundation’s goal of a world free of malaria (Bill and Melinda Gates Foundation 2022) or funding for the creation of the classic children’s educational television programme, Sesame Street, by the Ford Foundation and the Carnegie Corporation (Sesame Workshop 2019).

In any event, the just savings principle acts as a fairly limited concept of intergenerational justice and as a substitute for broader principles of distributive justice (i.e. principles for the allocation of resources and costs amongst members of society: Rawls 1999: 52–58, 78–81; Cohen 1997) that apply within a generation. Political philosophers have shown that distributive justice principles can be applied between generations, that cooperation can take place across generations and that it is possible to transfer resources between generations, although there are greater difficulties than exist between contemporaries (English 1977; Gaspart and Gosseries 2007: 193, 201–3; Thompson 2009: Ch 3, 113–14, 117). Thus, intergenerational justice is often conceived in a broader way to mean that the current generation is obliged to redistribute resources to persons, whether in the same or in future generations, based on the degree to which this would satisfy their fundamental social and economic needs (Birnbacher 2006: 34; Gaspart and Gosseries 2007: 201–04, 209, 211–12). These demands will clearly depend very much on the circumstances and context of the relevant society and require regard to issues such as whether future generations might be wealthier, or burdened by environmental degradation (see, e.g. Revesz 1999; Klausner 2003).

An alternative approach to intergenerational justice is to extend a ‘prioritarian’ interpretation of distributive justice principles (as between contemporaries, see, e.g. Rawls 1999: 57–73; Parfit 1997: 212–14). That is, socio-economic differences are tolerated only to the extent that these differences improve the absolute position of the most disadvantaged members of society, for instance because they incentivise greater productivity and hence greater societal wealth. If they do not, resources should be redistributed to the disadvantaged persons. Its effect on DAF sponsors will depend on matters such as the strength of the priority given to the most disadvantaged and expectations about the degree of well-being of future generations (see, e.g. Meyer and Roser 2009: 234–5). For example, if the priority given to the most disadvantaged is very strong and it is assumed that future generations will be wealthier, prioritarianism would likely favour small improvements for more disadvantaged members of the present generation, than large increases in well-being for slightly less disadvantaged members of future generations (Adler and Treich 2015: 294–7). Such an approach would favour very material DAF distributions that are proximate in time to donations into the DAF, although the risk of catastrophic shocks (such as the Covid-19 pandemic) would justify some saving (compare Gaspart and Gosseries 2007: 203–4, 209, 211–12).

However, a prioritarian approach like the one outlined above, takes little regard for the reproduction of social capital role of DAFs or the potential for DAFs to support longer-term approaches to societal problems. As noted above, there are real questions about the extent to which DAFs presently perform such roles. Nevertheless, it may be preferable to adopt an approach to intergenerational justice that would more easily enable DAFs to undertake the roles. From a ‘sufficientarian’ perspective to the allocation of costs and benefits (Benbaji 2006; Crisp 2003; Sher 2014: Ch 8–9), intergenerational justice demands that the current generation avoid the pursuit of benefits that would impose costs on future generations, where this would result in the world being handed on in a state that fails to meet a ‘sufficientarian’ threshold standard for members of future generations (Laslett 1992: 29–30, 44–45; Meyer 2021). Once the threshold has been reached, sufficientarianism can permit a ‘shift’ to another set of principles, such as prioritarianism, that apply to allocate resources above the threshold (Meyer 2021; Shields 2016: ch 2). In an intergenerational context, this might mean saving enough for future generations to achieve the threshold but then applying prioritarian principles to allocate the surplus amongst the current generation (in the context of a DAF sponsor, within the limits of its charitable purpose).

Rawls’ ‘just savings’ principle is a particular interpretation of sufficientarianism focused on a threshold comprised of just institutions (Meyer 2021). However, the threshold could be articulated in terms of a level of resources to meet basic needs, which could include sufficient resources to support civil society and its role in maintaining social capital, as well as to undertake long-term approaches to societal problems. If the threshold is low and relates to fundamental needs, then this approach does not demand that current generations materially sacrifice their own wellbeing by saving to benefit future generations, nor require future generations to level themselves down to the position of earlier generations, since the sufficientarian threshold simply sets a minimum (Benbaji 2006: 338–42; Meyer 2021; Meyer and Roser 2009: 222–5).

Sufficientarianism might, for instance, oblige a DAF sponsor intended to support educational charities to distribute heavily to schools and universities to enable a higher rate of funding of scholarships or other assistance aimed at providing educational opportunities for particularly disadvantaged students. However, the DAF sponsor would need to do so mindful of whether that DAF sponsor, or other bodies, can remain able to fund educational access for future generations of students and to fund educational civil society bodies that will enable the reproduction of social capital and long-term and risky approaches to educational issues. This might, for instance, cause a DAF sponsor to seek assurances about support for current potential students before distributing to universities with large and growing endowments (see, e.g. Eaton 2021).

A community foundation DAF sponsor focussed on a broad range of charitable purposes in a particular geographic region might likewise need to consider the extent to which the basic needs (linked to those charitable purposes) of future generations of community members are likely to be well-served. This would involve some analysis of whether current community members are well-served and whether material support is required to build up civil society bodies to meet existing or anticipated basic needs. If, however, basic needs are relatively well-served and, over the long term, it is anticipated that those needs will remain stable, that per capita GDP is expected to increase, and that material ongoing donations are expected, then a sufficientarian approach might suggest that most existing DAF funds should be spent over the short to medium term.

These processes also require regard to matters beyond the DAF sponsor’s own circumstances that might impact on future generations, such as state education, social welfare, etc. policies and funding, and the broad intergenerational effect of wider systems such as the tax and transfer system and environmental policies.^[3] Single issue DAF sponsors focussed on a particular charitable area (like education) and community foundations focussed on a particular geographic community probably have a good sense of likely levels of need for their services over time and of the likely impacts of government policy and of other actors. Larger DAF sponsors might also be anticipated to understand how broader systems might impact future generations, since this would indirectly impact on the level of need. Conversely, national DAF sponsors that exist for general charitable purposes may not have a good sense of these issues, though that would likely be required by the director and trustee duties discussed in Section 4.

The examples also raise two further matters. First, it seems inevitable that reasonable interpretations of these principles will differ. For instance, one DAF sponsor may consider that economic growth and government policy are likely to decrease need for the services of their funded charities over time, while a further DAF sponsor may allocate a heavier weighting to the detrimental impacts of climate change such that a lower payout rate might be justified to conserve resources for greater future need. Second, we have been working on the assumption that funds distributed by a DAF sponsor will largely benefit the current generation, rather than future generations. However, educational charities might invest in long-lasting infrastructure that benefits students decades into the future (Murray 2021: 202–3). DAF sponsors focused on environmental protection charities might justify high payout rates to reduce the effects of climate change, to the benefit of future generations. Community foundation supported charities might purchase a piece of land to preserve as open space for the community across generations (Klausner 2003: 8). Intergenerational justice is focused on the distribution of these benefits across generations, to which the initial distribution is only a guide. For intermediaries, such as DAF sponsors, that invest and distribute funds to other charities, the assumption seems not entirely unreasonable, particularly as much deferral is unlikely to extend to intergenerational timelines. Nevertheless, there is some basis for expecting DAF sponsors to select a slightly higher target rate of distribution to account for the fact that some benefits will be deferred (see Section 4.1). Also, the potentially long-term impact of current expenditure highlights the initial point about the range of potential reasonable interpretations of the demands of sufficientarian principles.

Moving beyond resources, if we conceptualise the fundamental needs to which our sufficientarian threshold responds as including a need for some degree of decision-making freedom, then we might also require that the DAF sponsor decision-making about how to support educational charities or community charities would pass on from one generation to the next (as to intergenerational justice and the distribution of decision-making freedom, see Murray 2021: Ch 8). As we will see, this is a dimension in which DAFs appear preferable to private foundations.

Finally, as Henry Hansmann’s discussion of ‘intergenerational equity’ (Hansmann 1990) has deterred some writers from employing intergenerational justice to accumulation of assets by charities (Booth et al. 2014), it is worth noting that intergenerational justice is a different concept to intergenerational equity. Hansmann (1990) construed the concept to mean the consumption of accumulated assets at a rate that is neutral between generations so that the accumulated assets will last indefinitely and fund the same set of activities indefinitely. That is clearly different to the concept of intergenerational justice, whether from a prioritarian or sufficientarian perspective.

4 Implementing Intergenerational Justice for DAFs

Despite arguing for a more expansive conception of intergenerational justice than Rawls’ ‘just savings’ principle, the approach to intergenerational justice in Section 3 is still conceived in terms of Rawlsian notions of ‘justice’. We would therefore expect these rules of intergenerational justice to be reflected in society’s basic structure. However, there are a variety of different ways in which intergenerational justice principles could be embedded in social institutions.

One option is to rely on the tax and transfer system to embody the state’s interpretation of what intergenerational sufficientarianism requires. After all, the state is probably better placed than most DAF sponsors to form a view on the intergenerational implications of broad systems and policies such as the tax and transfer system and environmental policies. However, arguments along these lines are typically based on unrealistic assumptions about the administrative cost and political will to amend tax rules to respond to the myriad of charity actions, especially where charities serve socio-economically disadvantaged groups that have less political clout (Adler 2012: 563–565; Murray 2021: 211–213).

Minimum payout rates or timeframes (the ACE Act approach) reflect another method of embodying such rules. However, it is difficult to formulate disbursement or timing rules to reflect the range of reasonable interpretations of intergenerational justice principles and their application in a charity’s specific context (Murray 2021: 213–216). Indeed, we noted in Section 3 how different (reasonable) views on the impacts of climate change on future generations and differences in the type of charities supported by a DAF sponsor, could lead to differing interpretations of the demands of sufficientarianism. Further, we may wish to retain the advantages of DAF sponsor independence and flexibility because they enable pluralism in support of civil society, or the taking of a longer-term approach, or permit a sufficientarian standard to change over time as needs vary. Yet, it is challenging to set a rate that permits independence and flexibility whilst also stopping material accumulation. Indeed, Deep and Frumkin’s research on large United States private foundations suggests that the private foundation 5% minimum disbursement rate may have resulted in uniformity of distribution levels and material accumulation across several decades (Deep and Frumkin 2005).

A further alternative is to shape charity or tax law (part of society’s basic structure) to ensure that DAF directors and trustees genuinely consider issues of intergenerational justice, as reasonably understood by them, when making accumulation and spending decisions (see e.g. Murray 2021: Ch 7). This procedural approach permits greater independence and flexibility and would not require a set payout rate or timing limit. It also neatly fits with the legal reality that donors have given away their property to the DAF sponsor – that is, it is the DAF sponsor officers who must make the ultimate decisions.

5 Conclusion

This article has argued that intergenerational justice can provide a normative basis for evaluating whether DAFs are ‘unduly’ delaying the more direct application of funds by other public charities. Further, that DAF sponsor directors and trustees have duties to give genuine consideration in exercising their powers to distribute and retain assets and that this could involve consideration of the principles of intergenerational justice. The benefit of this procedural method for implementing intergenerational justice is that rather than imposing a one-size fits all model via a payout rate or limited timeframe for distributions, it would promote independence and flexibility for DAF sponsors. The procedural approach would, however, remind DAF sponsors of their role in decision-making and of the need for oversight of distribution recommendations made by DAF donors. This process, could involve the formulation and monitoring of grant-making and succession policies that are based on principles of intergenerational justice. Individual application of intergenerational justice principles (via a social welfare function) would only arise for very large DAF accounts. The key challenge to this more flexible and autonomy-enhancing approach is the need to strengthen the enforcement abilities of the chief charity regulators in jurisdictions such as the United States and, potentially, Canada. Further consideration would therefore need to be given to mechanisms for better coordination between state and federal regulators.