Law professor Ray Madoff is the co-founder and director of the Boston College Forum on Philanthropy and the Public Good. In an interview with Emily Schwartz Greco, The Conversation U.S. philanthropy and nonprofits editor, Madoff sums up some of the main points about charitable giving she makes in her 2025 book, “The Second Estate: How the Tax Code Made an American Aristocracy.” This interview has been edited for length and clarity.

How has charitable giving changed over the past 50 years?

Giving has pretty much remained flat as a percentage of personal disposable income. It’s been stable by that measure at about 2%. What’s changed is where that charitable giving is going.

In the early 1990s, about 6% of all giving was going to intermediaries, like foundations and donor-advised funds, and 94% was going directly to charities: hospitals, universities, churches, organizations curing diseases, all sorts of things.

Donor-advised funds, or DAFs, are charitable investment accounts that can serve many of the functions of a foundation – but with fewer rules and regulations.

Fast-forward to today, and there’s been a huge transformation with dramatic growth in giving to intermediaries. Today, around 40% of U.S. giving from individual donors goes instead to charitable intermediaries, and 60% of those donations go straight to charities.

When money donated to charity through intermediaries primarily went to foundations, those assets were subject to a 5% payout rule. It was imperfect, but still, at least 5% of those funds, for the most part, had to go to charity.

Now, due to the rise of donor-advised funds, none of this money going to intermediaries is subject to payout rules.

That’s because there are

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