One family’s $21M charity fund dispute shows how tax-advantaged giving can go wrong. What donors should know

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But now he claims he’s been locked out by WaterStone, the nonprofit overseeing it (1).Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's howDave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and the simple steps to fix it ASAPTurning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fastAfter stepping in as successor advisor to the family’s donor-advised fund, Peterson alleges WaterStone cut off communication and stopped approving the donations he recommended.The fund, which launched in 2005 and is valued at roughly $21 million, regularly gave away between $2.3 million and $2.5 million annually to charitable causes. But Peterson says that flow of money stopped in 2024 after a dispute over how much should be paid out.According to a federal lawsuit, Peterson claims he’s unable to access basic account details or even confirm whether any donations have gone out at all.On the other hand, WaterStone is pushing back, stressing that Peterson isn’t the donor himself.As this dispute shows, donor-advised funds can be powerful tools for giving, but they come with tradeoffs many donors may not fully understand.“People put an enormous amount of trust in these companies, and we’re hopefully going to find out what these companies can and can’t do,” Peterson said to CNBC, “It may have a big effect on the industry, and I don’t want to be that guy. All I want to do is to be able to continue my father’s legacy” (2).Many donors may not fully understand that once you put money into a donor-advised fund, it’s not yours anymore.DAFs are often pitched as sleek, flexible “charitable wallets” where you can give now, get the tax break, and decide later where the money goes. But behind the marketing is some important fine print: the sponsoring organization has the final say, not you.Investment News emphasizes the gap between perception and reality points to a fundamental trade-off baked into DAFs: generous tax perks in exchange for surrendering control, and it’s an opportunity for advisors to make sure their clients understand the tradeoff (2).Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoTrending tickersBTC-USD Bitcoin USD 70,777.63 +2,469.88 (+3.62%)UGRO urban-gro, Inc. 6.15 +3.97 (+182.11%)PLTR Palantir Technologies Inc. 160.84 +10.16 (+6.74%)QS QuantumScape Corporation 7.05 +0.46 (+6.98%)UNH UnitedHealth Group Incorporated 269.54 -6.05 (-2.20%)PortfolioSign in to access your portfolioSign inTop gainersPAYP PayPay Corporation 24.11 +4.21 (+21.16%)APGE Apogee Therapeutics, Inc. 79.24 +13.20 (+19.99%)AXTI AXT, Inc. 64.44 +10.20 (+18.81%)FSLY Fastly, Inc. 28.75 +3.55 (+14.09%)LUNR Intuitive Machines, Inc. 20.31 +2.48 (+13.91%)Top losersSEDG SolarEdge Technologies, Inc. 46.73 -4.96 (-9.60%)RGC Regencell Bioscience Holdings Limited 25.22 -2.16 (-7.87%)EL The Estée Lauder Companies Inc. 79.29 -6.63 (-7.72%)ENPH Enphase Energy, Inc. 40.76 -3.35 (-7.59%)LBRT Liberty Energy Inc. 29.11 -2.34 (-7.44%)Most activeNVDA NVIDIA Corporation 175.64 +2.71 (+1.57%)CDE Coeur Mining, Inc. 17.89 +0.22 (+1.25%)SMCI Super Micro Computer, Inc. 21.58 +1.05 (+5.11%)ONDS Ondas Inc. 10.90 +0.82 (+8.19%)AAL American Airlines Group Inc. 10.81 +0.38 (+3.64%)Top economic eventsEarnings eventsMy earnings eventsEarnings events