Thursday, October 8, 2015

Doing the DAF- Donor Advised Funds and Hilchos Tzedakah

When a person makes a profit, he will want to to give Maaser Kesafim, and to reduce his tax liability through charitable donation.  He does not necessarily want to disburse the entire amount immediately, preferring to distribute the charity over a long period.  For example, a person sells an asset he spent a lifetime developing.  This is a singular event. He intends to give maaser kesafim, so he'll give at least ten percent to tzedaka.  From a tax perspective, it makes sense for him to give the money away the same tax year as his profit, so he can deduct the charitable donation from his income and only pay on ninety percent.  (Actually, it would be better for him to give a percentage of appreciated asset to tzedaka, which will enable him to deduct the appreciated value from his income. This will reduce his tax liability even more.)  But he wants to distribute it over time. How do you give it all away immediately, and still give it away over a long period?  By creating a Donor Advised Fund (hereinafter DAF.)

A DAF is a convenient giving vehicle that has mostly replaced family foundations. The donor makes an irrevocable contribution to an account within the fund, getting an immediate tax deduction.  At that point, he names the account (e.g., The Eisenberg Foundation for Clever Online Torah, hereinafter EFCOT) and becomes the account advisor.  
The advisor and his named successors may make subsequent additions/donations to the fund.  As Advisor, there are two things he can do: He can choose among multiple investment pools where the funds might grow over time. Most importantly, he can "recommend" grants to charities he selects.

It is important to emphasize that from the legal perspective, the donor gives up all ownership and legal control over the money in the fund.  (If the fund goes bankrupt, all the money deposited with them is lost and gone forever.)  In this peculiar but perfectly valid arrangement, the sponsoring organization, the manager of the DAF, is not legally obligated to follow the wishes of the donor.   Still, the reality is that the funds or assets will be invested and distributed exactly as advised by the donor.  

Approval of grant recommendations is essentially automatic, as long as the fund's rules and IRS regulations are satisfied.  Generally, all that is required is that the recipient be a 501 (c) charity in good standing.  (There may be exclusions that prevent the advisor from naming charities where the adviser or a close relative would benefit from the gift- obviously, grants made from DAF’s must be made for charitable purposes and not for the benefit of the donor or donor advisor or to pay a grandchild's tuition.)  The Adviser instructs the manager to send a check in the amount of X to "Kollel Hora'ah of Marlboro" and the manager of the DAF will send out the check.

What if the fund would refuse to follow donor advice and would give the money to a different charity?  As far as I know, this has never happened. My guess is that the donor would have an action for fraud, but not for conversion.

DAFs are available at Vanguard, Fidelity, and other large investment houses.  There are some Jewish DAFs as well, with slightly higher carrying costs.

As I said, one big advantage of a DAF is that a person might sell a large asset that he has spent a lifetime building, and set aside a percentage, such as maaser, for tzedaka.  But he might not want to distribute the maaser all at once, but rather over a period of several years- or decades.  This will enable the donor to give his entire maaser to the DAF, and distribute it to charitable organizations over time. Another benefit is the option of anonymous philanthropy.

There are several halachic ramifications that arise.

1. If he promises the money to tzedaka, he will have a bal te'acheir problem, because giving the money, or the asset, to the DAF, is not giving tzedaka al pi halacha.  The IRS, of course, views the charitable contribution as having taken place when you fund the DAF.  But it is likely that funding a Fidelity DAF is not called giving tzedaka.  If you haven't given the tzedaka, then you haven't fulfilled your neder, and you'll be over on the issur de'oraysa of Bal Te'acher.

2.  So, of course, one should not promise the money to tzedaka.  Just fund the DAF and give when you want.  The problem is that in that case, you're not really giving maaser, are you?  Maaser ought to be given within a certain time.  For example, the Noda Biyehuda in YD II 198 says that it must be given annually.  So how can I keep it on ice for ten years?

3.  Maybe the DAF administrators can be viewed as the Gabbai, odd as that may seem, and the Gabbai can give when he wants.  But first of all, you would have to give it to what we would consider Tzedaka, not The Vanguard Donor Advised Fund definitely does not fall into that category.  And even if you gave it to a Jewish administered DAF, the fact remains that you have the tovas hana'ah, and the administrator cannot give it away without your approval, so is he really a gabbai?  I lean toward the idea that the DAF administrators do have the din of gabbaim, but this can be argued either way.

4.  A DAF can be invested, like any account.  It is possible that you can designate tzedaka, and then invest on behalf of the nitzrachim, and still call it maaser right now.  I'm not sure what the result as far as Bal Te'acheir will be if you designate tzedaka and invest it on behalf of tzedaka but don't give it to them for years.

In sum, there are two major questions.
1. Is this person creating a problem of the issur deoraysa of Bal Te'Acheir by setting aside tzedaka and not giving it quickly enough.
2. Does a person who funds a DAF fulfill a mitzvah of Tzedaka?  Is he doing a mitzva of Tzedaka at the initial funding, or is the mitzva only when he disburses the funds ten years from now.
3. If he is not doing a mitzvah of tzedakah now, is he fulfilling the din of Maaser Kesafim now?

1. Yes, but this can be easily avoided if you know what to do.
2. Probably not.
3. Remarkably, yes.


The Bal Te'Acheir problem:
 It says in YD 257
 הרי עלי סלע לצדקה או הרי הסלע זו צדקה, חייב ליתנה לעניים מיד. ואם איחר עובר בבל תאחר שהרי בידו ליתן מיד,
 ועניים מצויים הם. ואם אין שם עניים, מפריש ומניח עד שימצא עניים. ודוקא במפריש צדקה סתם, אבל כל אדם יכול להפריש מעות לצדקה שיהיו מונחים אצלו ליתנם מעט על יד על יד, כמו שיראה לו 
which indicates that if you give with a tnai that you can distribute it when you want, you're not over bal te'acheir at all.  As the Tur says, this is a machlokes between the Rosh and the Rambam, but he and the Mechaber pasken like the Rosh.
 הצדקה היא כמו הנדר לעבור עליה משום בל תאחר, לפיכך האומר הרי עלי סלע לצדקה, או סלע זו לצדקה, חייב ליתנו מיד לעניים ועובר משום בל תאחר אם לא יתנו מיד, שהרי עניים מצויים לו בכל שעה, וכתב א׳׳א הרא׳׳ש ז׳׳ל, דוקא דמפריש צדקה סתם אבל כל אדם יכול להפריש מעות לצדקה שיהיו מונחים אצלו ליתנם מעט על יד על יד כמו שיראה לו, והרמב״ם כתב, אם אין עניים יפריש וכו', ואם התנה אין צריך להפריש וכו', נראה מדבריו שאין תנאי מועיל אלא כשאין עניים, ולא נהירא
The bottom line is that you can give money to tzedaka and avoid the whole Bal Te'Acheir problem by making a tnai that you will give it out when and to whom you want.  The Bach disagrees with the Beis Yosef and the Tur's psak against the Rambam, but I don't think that matters.  We will go with the Tur and the Mechaber.


The Tzedakah and Maaser Kesafim problem- is he fulfilling either of these dinim with a DAF?

Is it called giving Tzedaka or Maaser when there's a hafrasha now and the nesina is in ten years?  It is obvious that the only purpose of Tzedaka is so that nitzrachim receive what they need.  If so, the designation of assets as Tzedaka is by no means a fulfillment of any mitzvah.  If and when you deliver it, then you fulfill a mitzvah, but not before that.  So what good is it that you have a hafrasha and you put it in to a DAF?  You have done exactly nothing until the nitzrachim receive it.  If from a Mitzvas Tzedaka perspective you've done nothing, then you haven't fulfilled the din of Maaser.  All you've done was obligate yourself to give money in the future.  Ten years from now, when you give it away, at that point you've fulfilled the din of Maaser, but we saw that Maaser is an annual requirement. Until that point, you've done nothing but promise to do something in the future.

I'm putting it in here in Hebrew so that someone might find it in a search.
אם האדם מקיים מצוות מעשר כספים ע"י הפרשה בלי נתינה מיידית 

I believe that we've resolved this question as well.  As you will see, it appears that hafrasha/designation does immediately fulfill the din of Maaser Kesafim.

1.  Reb Moshe in the Dibros in Gittin p. 117-8 says that Rav Saadiah Gaon as brought in the Tur is mashma that the hafrasha is a not mitzva on its own.  Either you're chayav to give, or don't bother with hafrasha.   Therefore, a person that only earns enough for his basic needs is simply not chayav in the mitzva of tzedaka.  The Rama there seems to say that there are two dinim in Tzedaka, hafrasha and nesina.   Therefore, a person that only earns enough for his basic needs has to be mafrish tzedaka and then, based on the din of kedima, he takes it for himself.

Reb Moshe says a nafka minah would be where a person is noheig to give Maaser Kesafim, but now he earns only what he himself needs.  According to the Rama, he will have to be mafrish maaser, and he'll take it for himself; the idea is that the minhag of Maaser is to be meyacheid it for Tzedaka, and then you apply the dinim of tzedaka to the money.  So fine.  Be meyacheid, and by doing so you've fulfilled the minhag of MK, and then take it for yourself.  According to RSG, since his minhag to give maaser was only when he was chayav to give tzedaka.  Now that he's not chayav to give tzedaka, he has no reason to be mafrish or be meyacheid anything.
It is clear as day that according to Reb Moshe, our question will depend on the difference between RSG and the Rama.
According to RSG that the mitzva of tzedaka is the nesina alone, then hafrasha really does nothing.  According to the Rama that just like leket, there is a din of hafrasha besides the din of nesina of tzedaka, then in our case, the hafrasha is all that is needed to fulfill the minhag of Maaser Kesafim.  Once I was mafrish and it's in the parsha of Tzedaka, I follow the dinim of Tzedaka.  One of the dinim is that, according to the Rosh/Tur, I can be masneh to give it over a long period.

Reb Moshe's diyuk in the almost invisible difference between the language of RSG ( חייב אדם להקדים פרנסתו לכל אדם ואינו חייב לתת צדקה עד שיהיה לו פרנסתו)and the Rama (פרנסת עצמו קודמת לכל אדם ואינו חייב לתת צדקה עד שיהיה לו פרנסתו) seems like a very slim reed to support this tremendous difference in the din of Tzedaka.  Reb Moshe himself says later in the piecee that this diyuk is tzarich iyun le'dinah, because the idea that there's a mitzva of hafrasha alone, based on an asmachta to matanos from produce, is far fetched.  But in the end he says that he believes that the diyuk in the Rama is valid, and if Reb Moshe says so, you can take that to the bank with you.

2.  Rav Wozner, in vol 5:131, on YD 247, brings that there are those who hold that Maaser kesafim obligates hafrasha even where there is no recipient- you're chayav to do the hafrasha even when there's no nesina.  He argues.  It appears that he holds that hafrasha alone is nothing as far as the idea of Maaser Kesafim.  On the other hand, it appears that the shittah he is arguing with, the Rishon LeTzion from the Pri Toar (brought more clearly in his vol 4:124) holds that the hafrasha is a kiyum of MK; if so, maybe the DAF will work.

Here's the Pri Toar:
מצות עשה ליתן צדקה — מצוה זו יש בה כמה פרטים הא׳ — דאפילו מבלי תובעים אותו מצוה על האדם להפריש מממונו צדקה ולחפש עני לתתה לו, וההפרשה היא אחת מעשרה וראי׳ ממה דאיתא בספרי וכתבוהו תוס׳ תענית ע׳ ע״א וז״ל תעשר וכו׳ אין לי אלא תבואת זרעך מנין לרבות רבית ופרקמטי׳ ושאר רווחים ת״ל את כל וכו׳ — הרי דדמיא למעשר ומזה אתה למד דהויא כמעשר דהגם דאין לו תובע לא יפטר מלעשר אלא יעשר ויניח עד שימצא לוי לתתו לו ויש בזה מצות עשה, אבל אין בה לאו אלא דוקא אם בא העני ושאל אי נמי שיודע שיש עני נצרך והוא מעלים עין ולזה כ׳ הרמכ״ם פ״ז ממתנת עניים וז״ל כל הראה עני מבקש ומעלים עין ממנו עובר בלאו הרי דלא עבר בלאו אלא בכה״ג 
Rav Wozner says that there is no mitzva when there are no aniyim, there is no din of hafrasha that is separate from nesinah.  Either you give it to the ani, or you've done nothing.
According to this, Rav Wozner would not view our hafrasha as a fulfillment of any sort of mitzva of tzedaka.  The Pri Toar would.
However, if you'll read the teshuva, it appears that Rav Wozner agrees that as far as the din/minhag of Maaser Kesafim, it could be that there is a new mitzva of hafrasha.  His words-
אלא כנ״ל דמה״ת ודאי לא חייב רק בקיימי עניים, או בעניים תובעים, או לתת לגבאים שיש להם עניים מקבלים, אבל בלא הא ליכא דין הפרשה מה״ת וצדקה אם לא ממדת חסידות או מתקנת רז״ל כמש״כ בפוסקים בדיני מעשר כספים
So even Rav Wozner would agree that you fulfill the din of Maaser Kesafim with the immediate hafrasha.

We are assuming that my funding of a DAF is called a hafrasha, and the administrators have the status of gabbaim, since ultimately we know for a fact that they will give the money to the tzedaka I advise/designate.

I discussed this issue with Harav Shmuel Fuerst, and he stated clearly that creating a DAF with the intention of giving the money to tzedaka over time does fulfill the din of Maaser Kesafim.  I asked him about the hafrasha/nesina issue, and he said that based on the Rosh/Tur we mentioned, it is a kiyum of the din of Maaser Kesafim.

So it appears that everything is fine.  I had a very hard time understanding how you can fulfill anything that has to do with Tzedaka with a hafrasha.  Who cares that you're mafrish?  א"ר אלעזר אין צדקה משתלמת אלא לפי חסד שבה שנאמר זרעו לכם לצדקה וקצרו לפי חסד

The answer has to be that, as Rav Wozner says clearly and Reb Moshe discusses as well, that ein hachi nami, Tzedaka per se is only meaningful when it gets to the ani, and a hafrasha has nothing to do with the mitzvah of tzedaka.  But Maaser Kesafim is akin to matanos, and matanos have a din hafrasha besides the din of nesina.  

For the moment, I'm going to link to some relevant articles.  I'll winnow them out later.

Here is the biggest Jewish DAF.  While administrative costs are higher, at least it's going to a Jewish fund.

Re that fund, see
On the other hand, see

One must remember that they were not acting on their own initiative, merely doing what the fund donor advised.  Still, it weakens the claim to be an organization that exists for the betterment of Judaism and the Jews.


The following is a general discussion of the idea that in Matanos there might be two dinim, hafrasha and nesina.

Here's the Ramban in Sefer HaMitzvos regarding the separation of hafrasha and nesina into two mitzvos.  From the Ramban, you will see that the Rambam holds not like this.  And in any case, again, this makes more sense by matanos than by stam tzedaka.

והראייה עוד שהיא מצוה חיובם לברך על הפרשתם כמו ששנינו (תרומו' פ"א מ"ו) חמשה לא יתרומו ואם תרמו תרומתן תרומה האלם השכור הערום ובעל קרי. והיינו מפני שאינן יכולין לברך. ומפורש בתוספתא באחרון שלברכות (הי"ט) ההולך להפריש תרומה ומעשרות אומר אקב"ו להפריש תרומה ומעשרות מאימתי מברך עליהם משעה שמפרישן. ואילו היה המצוה עלינו הנתינה לכהן מפסוק ראשית דגנך תירושך ויצהרך תתן לו בלבד לא היו גוזרין עלינו לברך בשעת הפרשה מן הכלל המסור לנו מהם כל מצוה שעשייתה אינו גמר מלאכתה כגון תפלין אין צריך לברך כמו שנתבאר (בחמשי) [ברביעי] שלמנחות (מב ב)  וכיון שאמרו לנו לברך בשעת הפרשה אקב"ו להפריש תרומה או להפריש מעשר למדנו שבהפרשה מצוה. ועוד שהרי הכהנים עצמם מפרישים תרומה ומעשרות ומברכין גם כן עליהם כמו שדרשו [הובא פ"א ממעשר סה"ג] מפסוק כן תרימו אלו לויים גם אתם אלו כהנים. ואילו לא היה במצוה אלא הנתינה בלבד היו הם פטורים מזה. ועוד שהרי בחלה טמאה מברך בהפרשתה ואינה ניתנת לכהן אלא משליכה באור כמו שמוזכר בגמר בכורות (כז א) ואם כן ראוי שנמנה שתי מצות בתרומה הפרשתה מפסוק תרימו תרומה לי"י ונתינה לכהן מפסוק תתן לו... ויעלו בידנו במנין הפרשת החלה והתרומה והמעשרות הראשון ושל העני ונתינתן הם מצות משלימות לנו החשבון:

And the Chazon Ish in Maasros 7:24, that if you think that hafrasha by Truma is only a hafrasha when he intends to give it to the Kohen, but if he intends to be mafrish and pour it out, what good is the hafrasha?  He says you would be wrong.  It's a hafrasha nonetheless.

 והדין מבואר גם בגמ' שבת י"ז ב' דאמר משום תרומה ביד ישראל ופריך אם איתא דרוצה לקפח את הכהנים היה מפריש חטה אחת ואם איתא דלא מיתקן הכרי הו"ל למפרך הא קאכיל טבלים ואפרושי נמי לא לפרוש ובמכות י"ז א' אמר טעמא דר"א שא"צ לקרוא שם למ"ע דכיון דממונא הוא מפריש לי' ואינו נותן אלמא שהכרי מתוקן ובבכורות ל' א' פי' תו' החשוד על המעשרות היינו לאכלן חוץ לירושלים אבל אינו חשוד על הפרשה ופירשו כן הא דאמר חושש משום מעשר ואם איתא דמפריש מע"ש ע"מ לאכלן בבית אין הכרי מתוקן א"כ אין כאן מ"ש כלל אלא טבל ולמה חושש משום מעשר הרי יש כאן משום טבל ויכול לתקן דמאי ואין כאן משום מעשר ובב"ק קט"ו ב' לימא מהפקירא קזכינא כו' וראה שהן משתברות וכו' ומאי ראיה דילמא שאני תרומה דהמפריש ע"מ לשופכו אינו תרומה דעיקרה הנאת כהן אלא בודאי המפריש ע"מ לשפוך לארץ הוי תרומה ואפי' שפכן אח"כ 

And here is something I wrote ten years ago about Challah:

.......machlokes the Magen Avraham and Reb Akiva Eiger and Rashi (and maybe the Rambam) against the Taz and the Gaon (and maybe the Ramban).  The  Magen Avraham  in OC 8:2 asks why the mishna in Challa allows the bracha on hafrashas challa while seated, when in general brachos should be said while standing.  He answers that this mitzva is only a mattir, like Shechita, so it is not like other mitzvos.  The Gaon there disagrees, as follows: ודברי מג"א שחלה אינה מצוה, דבריו אין להם שחר, והלא אסור לעשות עיסתו קבין כדי להפקיע חיוב חלה כאמור ביו"ד סי' שכ"ד סי"ד ואמרי' בפ"ג דפסחים [מח,ב,] מאי דעתך לחומרא חומרא דאתי לידי קולא, דמפקע ליה מחלה   The Taz in YD 1:17 says clearly that there is a mitzva to be mafrish even if you have no intention of eating the rest and don't need a mattir.  Reb Akiva Eiger there mentions the Magen Avraham and holds like him, against the Taz:  לא מצאתי זה, דבפשוטו הוא רק כשרוצה לאכלו אסור עד שיפריש תרומה, ובמג"א ריש סי' ח' כתב כן לענין חלה ע"ש, וה"נ בתרומה.  Reb Aharon and the Chavatzeles Hasharon (Carlebach) point out that the passuk in Shlach, Bamidbar 15:19, and a similar passuk by Teruma in Devarim 14:22, use the word "B'achlechem," which seems to support the Magen Avraham.  Also, see Rashi in Gittin 47b: ד"ה מדאורייתא: דביכורים מצוה דרמיא עליה היא ולא טבלי לאסור פירות באכילה וכו'. ולא דמי למעשר וכו' דמעשר טביל ואסר ליה באכילה, ולא מצוה דרמיא עליה היא, אלא אם כן אוכלן או מוכרן דקא משתרשי ליה, clearly like the Magen Avraham.

Obviously, our case is different, because he does intend to give it eventually.  My only question was whether he's mekayeim the mitzva of tzedaka with the hafrasha, or only later when he actually gives it to the nitzrachim.

Just for shleimus, here's a conversation I and another commentator had on Reb Chaim B's blog regarding the question that chita achas poteres, but there's a din of kdei nesina:

pellehDin9:05 AM
As at Shlach 15:20, Rashi is saying pshat in the concept of titain/titnu - k'dei nesina. Although chitta achas poteres es ha'kri, it is not mekayem the d'oraysa of k'dei nesina. 
However, k'dei nesina implies a certain minimal amount, similar to the minimum amount to give each oni from ma'asar oni. This minimal amount would satisfy the obligation regardless if it was given from 100 pounds of challah or grain, or from 100 tons. Continues Rashi that the Chachamim said pshat in k'dei nesina that it is proportional to the amount being tithed.
This is not a takana or gzeira: this is nosnu shiur. K'dei nesina means a minimal amount or a proportional amount, whichever is greater. One who gives the minimal amount when it is less than one in sixty is not mekayem k'dei nesina. Perhaps more than by the melochos asuros on Chal Hamo'ed, this shiur is de'oraysa for k'dei nesina, because it is not a value judgement by the Chachamim but rather the pshat in the words.
However, the halacha of chitta achas poteres es hakri remains regarding tevel, because that is a din in torimu, not titnu.

Eliezer Eisenberg10:35 AMFor pellehDin to say that there are two dinim deoraysa in matanos, hafrasha which has no shiur and nesina that has a shiur, is a blithe assertion of an unprecedented proposition of such novelty that it requires a good deal more support than "how do I know so, because I think so."Fortunately, the Noda beYehuda in Tinyana YD 201 says exactly what he says.

Eliezer Eisenberg10:45 AMI just want to add that the Noda beYehuda himself says "ויש לי לומר בזה דבר חדש לא קדמני בזה שום מפרש או פוסק," and indeed the Aruch haShulchan (Trumos 60:4-5) disagrees. He says you can't say you're not yotzei nesina midorasa, Instead, you're yotzei, but the Torah calls it a chet, like min ha'ra'ah.

pellehDin11:25 AMAccording to both, however, k'dai nesina is separate from hafrasha. The parameters of which Rashi is clearly elucidating.

pellehDin11:33 AM
And BTW, the fact that one is yotzai harama min haTorah even min ha'ra'ah seems to be the makor for chazal establishing three shiurim for nesina by teruma.

I realize that this is booooring if you're not in the parsha or in the sugya, but if anyone has any experience or expertise with this matter, I would appreciate your thoughts.

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