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(NECN) - It's the time of year when many pull out their wallets and donate to charities - but there's a growing problem for traditional local charities of so-called donor advised funds.
An op-ed piece in The New York Times raises the issue of investment funds that have become "warehouses of wealth." The article's author, Boston College Law professor Ray D. Madoff, writes "Too many charitable dollars are not available to serve the community because they are sitting in investment accounts."
Madoff says on Broadside there is $45 billion sitting in donor advised funds.
"These are accounts that are designed to hold charitable dollars and then they'll be ultimately distributed to charities," she says.
Madoff explains that once the dollars are given to these accounts, "for purposes of the federal government, you've done all that you need to do in terms of your charitable giving. You're fully entitled to the maximum benefits available for the charitable deduction. And because these things get to qualify, they're treated the exact same as if you've given to the American Red Cross, even though the money is just sitting there and it's not being put to any real charitable use."