Whether it was the holiday spirit, a New Year’s resolution, or a last minute move to offset tax obligations, LinkedIn cofounder Reid Hoffman and his wife Michelle Yee just allocated $9.2 million in shares of the online gaming and app company Zynga to a donor-advised fund managed by Fidelity Investments.
As the Los Angeles Times recently reported, this type of donor advised fund is becoming increasingly common, as it allows for immediate tax deductions with minimal paperwork. In contrast with traditional grantmaking foundations, which are required to distribute at least 5% of their assets annually, money can be parked in these donor-advised funds for years without being touched—a practice that some argue puts charitable organizations at risk of losing critical funding streams.
There is no word yet on what causes Hoffman plans to support with these assets, or when he might start giving them away, but he does retain voting and dispositive power over the shares, at least for now. Some of his major giving in the past however has been directed toward organizations such as Kiva, Donors Choose, the Endeavor Foundation and the XPrize Foundation. He has also recently touted the relatively small $10,000 in grants given through LinkedIn’s employee giving program, which went to 51 organizations, mostly dealing in health and education, many in developing countries, so this may offer some clue as well.