Twitter Facebook Instagram Vimeo  

SHARE

Blog

Blog

rss

The Community Foundation Blog


Six Reasons to Choose a Community Foundation Donor Advised Fund
By The Community Foundation / May 25, 2022
Six Reasons to Choose a Community Foundation Donor Advised Fund

by Brandon Butterworth, VP of Philanthropic Services

 

In recent years, donor advised funds (DAFs) have become a popular option for those who want to remain active in their giving, but also want to avoid complicated paperwork while taking advantage of tax-savvy giving strategies to maximize charitable deductions.

  

When the subject of DAFs comes up in conversations with local philanthropists or professional advisors, I am often asked: what’s the difference between opening a commercial gift fund and a community foundation fund?

    

The simplest answer is donor advised funds at a community foundation, like the Community Foundation for a greater Richmond, offer donors an opportunity to strengthen their community and maximize the impact of their charitable giving in ways that commercial gift funds cannot. 

 

Here are six reasons to consider opening a donor advised fund at a community foundation over a commercial firm:

   

1.   Concierge-level service. At a commercial firm, you will likely have online fund access and support, but its unlikely that you will have a dedicated relationship manager to personally assist you with your grantmaking.  Community foundations understand that your giving is personal, and we are here to help you every step of the way. 

At the Community Foundation for a greater Richmond, each donor has a dedicated philanthropic advisor who works with them, their family, and their professional advisor to provide a customized giving plan that aligns with their values and will help them achieve their charitable goals.  Furthermore, our staff has deep, long-standing relationships within the local nonprofit community, and we can provide you with valuable research, insight, and guidance on community needs, as well as areas of interest to you.



2.   Local expertise and support. Many donors I speak with prefer to keep their giving local, support multiple nonprofit organizations and want to make a difference in the community they are a part of which completely aligns with the nature of a community foundation.

The Community Foundation
for a greater Richmond has a deep understanding of the issues, opportunities and initiatives shaping our region. By sharing insights and success stories, we can help you make informed giving decisions and explore new possibilities.  We can suggest organizations doing good work in your areas of interest, or you may join other donors in contributing to our Community Impact Fund so that we can make larger, more impactful grants togetherThrough our Community Impact Grant process we awarded over $3.5M to organizations leading the way locally in our focus areas of community vibrancy, economic prosperity, educational success and health and wellness last year.

 

3.   Opportunities to learn and connect. We facilitate meetings among multi-generational families. We host learning events to provide local perspective on emerging trends, best practices and critical community needs, and we manage and support hundreds of volunteer projects annually. 

We
bring like-minded philanthropists together and offer collaborative funding opportunities, like our Giving Together Initiatives or one of our four Giving Circles.  Your involvement with the Community Foundation means you are joining a community that is dedicated to advancing regional solutions and nurturing generosity.

 

4.   Fees increase your charitable impact. Administrative fees for some commercial funds may be lower, but they are not re-invested into the community. Fees at community foundations support the charitable mission of the charitable sponsor, as well as research, grantmaking, social impact programs, civic engagement and other efforts to improve quality of life in local communities.

Also, depending on your investment fund choicethe Community Foundation may offer lower investment fees than commercial gift funds. The Foundation also has a Socially Responsible Pool option.

 

5.   Investment expertise. A professionally managed account at a financial services firm can require a significant investment to start a charitable fund. Donor advised funds at the Community Foundation for a greater Richmond can be opened for $5,000, with a minimum fund balance of $1,000.

W
e offer several institutional investing options for endowed or non-endowed donor advised funds of any size. The Community Foundation is involved in a unique investment partnership with Spider Management Company LLC, the investment manager for the University of Richmond's endowment. This partnership gives us access to a mature, well-diversified investment portfolio managed by a seasoned staff with an excellent performance record.  In addition, we equip fund holders with a knowledgeable investment committee and an in-house Chief Financial Officer to maximize philanthropic dollars.

 

6.   Experience with non-cash gifts. Unlike many commercial firms, community foundations can accept complex gifts. In addition to gifts of cash and marketable securities, we can accept gifts of real estate, closely held businesses and other non-cash assets. Our staff can help donors and their professional advisors identify which assets will be best to give.

 

Table Description automatically generated 

 

If you'd like to learn more about how the Community Foundation can help you and your clients or to answer your questions about philanthropy, reach out to Brandon Butterworth, Vice President of Philanthropic Services for a no-cost personal consultation.  

  

This content is provided for informational purposes only. It is not intended as legal, accounting, or financial planning advice.  

 

blog comments powered by Disqus