Pleasing the Rich to Give to the Poor

The closing of a giant tax loophole has been looming over U.S. hedge funds. A 2008 law required money managers who earned fees offshore and parked them there to declare the money and pay the taxes, but gave them until the end of this year. Although tax attorneys hunted for ways around this, they mostly came away empty. For many big-time investors, giving the cash away and getting a tax deduction may be the most attractive option.

The Robin Hood Foundation is ready to help. The nonprofit, established by hedge fund billionaire Paul Tudor Jones to combat poverty in New York City, stands out for the strategic planning it’s done around the money managers’ tax reckoning. “It was not a discussion that was prevalent at most charitable organizations,” says Elizabeth Zeigler, chief executive officer of Graham-Pelton Consulting, which advises nonprofits on fundraising and management issues. “When you think of the million-plus nonprofits in the U.S., a healthy majority don’t have relationships with hedge fund managers. Robin Hood does.”