On July 31, the IRS issued a new guide sheet for organizations sponsoring donor-advised funds to help them process Form 1023, Application for Exemption from Federal Taxation. The guide sheet purports to address concerns about the way donor-advised funds are operating. In general, contributions to a donoradvised fund are treated as contributions to a public charity, which provides donors with advantages over private foundations. Donors can claim a higher charitable contributions deduction (up to 50 percent of adjusted gross income) to a public charity, versus 30 percent to a private foundation. Donor-advised funds also are not subject to Section 4941 self-dealing rules and the Section 4942 annual payout requirements. The IRS is concerned that some donors or related parties are exerting too much control over the funds or receiving undue benefits. Assets also have been used inappropriately to partially pay for a grant to a public charity or partially pay for goods and services given to the donor by a grant recipient. Another abuse has been giving educational loans to donor-family members or paying for donor travel expenses that are not substantiallyrelated to a charitable purpose.