“They want someone to hold their hand,” she says. These donors tend to be engaged in their giving and are looking for help to develop a plan. Many donors open accounts at community foundations because the grant makers have a good understanding of the area’s nonprofits and offer services such as family philanthropic consulting, says Christy Eckoff, director of gift planning at the Community Foundation for Greater Atlanta. Their main selling points include low investment fees relative to other fund sponsors, and ease of use for donors.ĭonor-advised funds may seem like new arrivals on the scene, but they were conceived by community foundations decades ago and remain a key donation vehicle for most regional grant makers. These funds are responsible for much of the explosion in donor-advised funds over the past few years. Although they are separate nonprofit organizations, the assets in the funds are often managed by the related investment company. Generally funds fall into three categories: commercial, community-foundation, and single-issue funds.Ĭommercial funds, such as Fidelity Charitable, Goldman Sachs Charitable Gift Fund, Schwab Charitable, and Vanguard Charitable, were started by national financial-services firms. Every sponsoring organization has its own rules and procedures that affect the funds someone opens. But their popularity has mushroomed in recent years, catapulting Fidelity Charitable to the top of the Philanthropy 400, the Chronicle’s annual ranking of charities that receive the most in private dollars.īecause DAFs hold billions of dollars, and their growth shows no sign of waning, we consulted experts to get answers to some of the most common questions people have about these funds.Ībsolutely not.
The use of donor-advised funds remains a relatively small part of philanthropy. Once a fund is established, donors tell the sponsoring organization which nonprofits they’d like to donate to from their accounts. Community foundations often serve as sponsoring organizations and so do nonprofit arms of financial-services firms, such as Vanguard Charitable and Schwab Charitable. The accounts are controlled by a nonprofit, called a sponsoring organization, that invests the assets and manages the donor’s account. A donor creates an account and makes a contribution of cash, stock, or other assets like real estate or artwork and can take an immediate tax deduction for the gift. A donor-advised fund is a little like a personal charitable savings account.
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