DONOR AND BUSINESS

ADVISED FUNDS


For those who prefer to be actively engaged in charitable giving, donor advised funds offer a simple and effective way to support the causes and organizations you care about, while streamlining administration, reducing costs, benefiting from professional staff support and gaining significant tax advantages.

Donor advised funds are flexible. They can be used for annual gifting, creating charitable cash reserves to fund future charitable grants, doing philanthropic giving with other family members, and establishing a charitable legacy. Whatever your goals may be, and whatever causes are most important to you, our staff will help you develop a plan that meets your objectives.

To learn more about the difference between Donor Advised Funds, Supporting Organizations and Private Foundations, please click here.

Donor Advised Funds:

  • Allow for continued involvement in making grant recommendations from the fund to any U.S.-based public charity
  • Offer most of the benefits of a family foundation
  • Build a family or business tradition of philanthropy
  • Generate an immediate charitable income-tax deduction for gifts into the fund
  • Avoid capital gains on gifts of appreciated, long-term assets
  • Provide either public recognition or anonymity, whichever your client prefers
  • Free donors from tax recordkeeping, administrative burdens and expenses
  • Avoid the private foundation investment excise tax and mandatory payout requirements
  • Include professional management services and a choice of investment strategies to meet your charitable objectives
  • Can be organized as a permanent or non-permanent named fund
  • Can be established with a gift of $10,000 or more

In addition to the benefits described above, the following applies to our Non-Endowed, Endowed and Business Advised Funds.

Non-Endowed Funds

  • Provide the flexibility of making all of their assets available for grantmaking
  • Provide access to our five available asset allocations or custom investment arrangements for funds of $1 million or more

Endowed Donor Advised Funds

  • Create a permanent legacy of your generosity that grows over time
  • Provide access to our endowment pool investment allocation or custom investment arrangements for funds of $1 million or more

Business Advised Funds

  • An alternative to creating a corporate charitable foundation
  • A demonstration of your company’s commitment to the community
  • A reliable source for charitable giving, in order to maintain the presence of the business in the community in spite of unpredictable revenue cycles
  • May be endowed or non-endowed

Donor Advised Funds FAQs

What exactly is a donor advised fund and how does it work?

A donor advised fund is a fund within the Community Foundation established by an individual, a family, a business or a foundation with a gift of $10,000 or more. Fund advisors, designated by the donor, make recommendations on grants and fund investments. If desired, the Community Foundation’s professional staff can support donors and advisors by researching charities, working with you and/or your client to develop a mission statement, and conferring with you and/or your client on charitable planning.

What kinds of grant recommendations can be made by donor advisors?

The minimum grant is $250 and all grant recommendations must benefit a public charity based in the United States. Grants cannot be used to satisfy any obligation of a pledge made by fund advisors to the charity, nor can they result in a direct benefit to any advisor. For example, grants cannot be used to gain membership in an organization or to purchase a table at a fundraising event. All grant recommendations are subject to approval by the Community Foundation’s Board of Trustees. With endowed donor advised funds, grant recommendations can be made against the annual amount available for grants. In a non-endowed donor advised fund, grants may equal the entire value of the fund.

Grants to benefit charitable programs in foreign countries can typically be made through a U.S.-based intermediary. In limited circumstances, grants can be recommended overseas, but several federal anti-terrorism and other regulations must be met.

Click here to learn more about recommending grants from an advised fund or contact the Philanthropic Services department at 313.961.6675 to answer any additional questions.

Who is eligible to be a fund advisor and how long do they serve?

Anyone can be a fund advisor. In the case of business advised funds, the Community Foundation and the donor work together to determine the advisors and their length of service. Community Foundation policy currently allows for up to two generations of advisors. Following the death or resignation of the last advisor, the remaining fund balance is held as a permanent endowment fund in the name selected by the donor. In the case of business advised funds or those established by another foundation, the Community Foundation and the donor work together to determine the advisors and their length of service.

What investment strategies are typically used to grow the fund?

Investment options and fees vary by type of fund. The Community Foundation invests endowed Donor Advised Funds in its endowment pool. Donors to non-endowed Donor Advised Funds may recommend one of five investment strategies with American Funds. For more details on available investment strategies, please click here. Custom investment allocations can be arranged while there are donor advisors serving and if the fund is in excess of $1 million.

Learn More About Endowments

For a consultation, please contact our Philanthropic Services department at 313.961.6675, or complete the donor advised fund application found here.