Wednesday, October 6, 2004
Interesting Wall Street Journal piece today on the use of Donor Managed Investment Accounts in estate planning. The DMI Account was developed by Winklevoss Consultants, blessed by the IRS in a private letter ruling, and is the subject of a patent application filed by Winklevoss. The vehicle permits a donor to take a full current income tax charitable deduction for a charitable gift of assets while retaining investment control over the assets for as long as ten years after the transfer. But because the assets are owned by the charity after the transfer, the assets grow on a tax-free basis. The article notes that the DMI Account “is expected to appeal to donors who have more confidence in their investment prowess than that of the organization they are supporting. During the past, donors who made an outright gift to a public charity weren’t usually allowed this level of investment control.” The article also notes that the DMI Account has many advantages over the Donor-Advised Fund and Private Foundation vehicles, and is the first new charitable giving vehicle since the Tax Reform Act of 1969.
2 responses to “WSJ on New “Donor Managed Investment Account” Charitable Giving Vehicle”
I am interested to know how others feel about Ashlea Ebeling’s recent article on DMI accounts found in the Nov. 1, 2004 copy of Forbes entitled “Stupid Tax Tricks.” Personally, it seems as though her undying allegiance to the Forbes mantra of “invest in the stock market” or else has prevented her from viewing this new charitable tax animal in an unbiased manner. Her article failed to look at this new vehicle for giving from the perspective of a donor experienced in the investment arena, looking for their annual charitable tax break, who wishes to provide an organization with more money than they may be willing to pay taxes on. Mrs. Ebeling also fails to grasp the concept of “look at my skills giving” and the fact that a wise donor may want the benefits of not only providing an organization with an immediate gift but also receiving the kudo’s that come with doubling or tripling that gift through their “investment prowess.” I have no special allegiance to Winklevoss or his new charitable tax scheme. However, I would like to read a more insightful and balanced analysis in a magazine which cost me over $5.00 at the newstand. Especially, since that $5.00 isn’t tax deductible!
George,
We appreciated your take on the Forbes article. For your information, Forbes agreed that some of its tone was inappropriate and has promised to publish our responsive letter to the editor in its next issue. The Forbes Website has posted our press release on the Donor Managed Investment Account Program. And we were invited by Sky Radio Network, the nation’s leading in-flight media, to do a 3-4 minute interview on the Forbes Radio Channel regarding “Best Practices in Business & Financial Management,” a series that looks at cutting edge organizations that, despite a challenging economy, have been able to anticipate market demand and are positioned to have a significant impact in the next few years.
Hopefully, you have also seen favorable media coverage of the DMI Account Program in the Wall Street Journal, Trust and Estates Magazine, Chronicle of Philanthropy, and in other national publications.
Rod Vessels
General Counsel
Winklevoss Consultants
http://www.winklevoss.com