How do donor‑advised funds like DonorsTrust disclose grants and what transparency limits exist in IRS filings?
Executive summary
Donor‑advised funds (DAFs) such as DonorsTrust report annual activity on IRS Form 990, including grants paid to grantee organizations, but structural and regulatory rules leave significant donor‑level and some grant‑level information opaque; sponsors and advocates argue this protects donor privacy while critics say it enables anonymity for politically consequential giving [1] [2] [3]. The IRS’s public‑disclosure framework and recent policy changes further limit what appears in publicly accessible filings, and gaps remain especially around contributor identities, foreign recipients, and intermediary transfers [4] [5] [6].
1. How DAFs disclose grants on Form 990 and related schedules
DAF sponsors file Form 990 and must list grants and distributions the organization made; those grant line items and aggregate totals are part of the public return the IRS makes available for inspection [1]. Investigative work shows researchers can and do use these filed returns to trace where large sums flowed from DAFs to named U.S. nonprofits—Center for Media and Democracy reported DonorsTrust grants and totals for 2022 based on IRS filings [6]. DonorsTrust’s own guidance and FAQ emphasize that it completes IRS forms for account holders and may disburse grants to public charities that are required to be current on their Form 990s [7] [2].
2. Donor identities: statutory protections and the claim of “total anonymity”
DAFs and their advocates point to legal protections and the practical reality that contributor names and addresses are generally excluded from public disclosure of exempt organization filings; regulations and IRS public‑disclosure rules specifically exclude contributor names and addresses from the set of disclosable documents [4]. DonorsTrust explicitly markets the possibility of preserving donor privacy—saying “total anonymity is possible” and that certain contributions reported to the IRS will not become public information [2]. Critics counter that this privacy effectively cloaks politically influential donors and aggregates power without public accountability [3].
3. Where the public record is thin: foreign grants, intermediary grants and withheld details
Even when Form 990 shows domestic grantees, notable blind spots persist: nonprofits are not uniformly required to disclose detailed public information about foreign grants, and commentators urge reform because Schedule F disclosures are less granular and can hide ultimate foreign recipients [5]. DAFs can also route money through other intermediary charities or other DAFs, a pattern documented in filings where DonorsTrust and its affiliate moved funds to other donor‑advised funds and intermediary organizations—tactics that add layers that obscure the original source and final use [6].
4. Regulatory changes and their effect on transparency debates
The IRS and Treasury have adjusted disclosure rules in recent years—most notably changing which filers must list donor names on Schedule B—creating legal and policy debates over whether reduced public visibility harms enforcement and public accountability; Congress, state attorneys general and think tanks have weighed in on both sides [8] [9]. Legal analysis notes the 2018 rule changes relieved several categories of nonprofits from publicly listing large donors on their Form 990 filings, a shift presented by supporters as protecting donor privacy and by opponents as diminishing transparency [9].
5. Compliance realities, ethical expectations, and institutional screening
DAF sponsors like DonorsTrust demand that potential grantees be 501(c) public charities and up to date on their 990 filings, and the IRS code imposes substantiation and disclosure rules around donations and quid pro quo receipts that affect how organizations document large gifts [7] [10] [11]. Best‑practice advocates and watchdogs urge that nonprofits publish accessible financials, audited statements and Form 990s to build trust—an expectation that intersects awkwardly with donor privacy claims when the donor is a politically active megadonor [12] [13] [14].
6. Bottom line: grants can be traced but donor and certain grant details often cannot
Publicly available IRS returns allow tracking of DAF grant flows to named recipient organizations and have been used to document large disbursements from DonorsTrust, yet the identity of the original donors is generally shielded from public view by regulatory exclusions and DAF practices that encourage privacy; furthermore, foreign grants and intermediary transfers create additional opacity that current Form 990 structure does not reliably resolve [6] [4] [5]. Reform proposals from analysts and policymakers aim to tighten disclosure—especially for foreign grants and intermediary routing—while privacy advocates and DAF sponsors argue for preserving donor confidentiality; the public record today reflects that tension rather than a single, settled standard [8] [5] [2].