Donor-Advised Funds
About Donor-Advised Funds
Donor-Advised Funds are a personal approach to supporting the cases and organizations that matter to you. This fund type allows for convenient, flexible tools for individuals, families, businesses, or groups that want to be personally involved in suggesting grant awards made possible by their gifts.
If you have a range of community interests, it’s an ideal vehicle for fulfilling your charitable wishes. Donor-advised funds are typically less costly and easier to administer than other forms of philanthropic giving (such as family or corporate foundations).
Frequently Asked Questions
What kind of grants can Donor-Advised Fund recommend?
Donor-Advised Funds can recommend grants to a large variety of nonprofit organizations in support of charitable activities except for grants to individuals or fulfillment of prior pledges.
Can donors recommend grants to individuals?
No. The Pension Protection Act of 2006 prohibits making grants from donor-advised funds, including scholarships, directly to individuals.
What kind of grants can Donor-Advised Fund recommend?
Donor-Advised Funds can recommend grants to a large variety of nonprofit organizations in support of charitable activities except for grants to individuals or fulfillment of prior pledges.
Can donors recommend grants to individuals?
No. The Pension Protection Act of 2006 prohibits making grants from donor-advised funds, including scholarships, directly to individuals.
Are grant recommendations ever denied?
We would never ignore the advice of a fundholder. However, it must be understood that the gift becomes the Community Foundation’s asset and the ultimate decision regarding any grant resides with the Community Foundation Alliance Board of Directors.
Is fundraising for a Donor-Advised Fund permitted?
Yes, under various circumstances under community foundation policies.
Do grants have to be made every year?
Unlike the private foundation that is required to make distributions or to pay excise taxes, the Community Foundation has developed a flexible spending policy that provides for distributions.
Grants do not have to be made every year; however, if no grants have been made from a fund for two years, we will attempt to contact the fundholder. After several years of inactivity and if we are unable to contact the fundholder, a fund may be turned into a designated, community good (unrestricted), or field of interest fund that still honors the donor’s original intent.
Can more than one person be an advisor?
Yes. In addition to individuals, groups, boards, and companies can also be named.
Can a Donor fundholder change current fund advisors or name successor advisors?
Yes, successor advisors may be named by the original gift agreement.
How does an advisor recommend grants from a Donor-Advised Fund?
Recommendations can be made by contacting your development staff or through the Fund Portal.
How often can grants be recommended?
A fundholder can recommend grants as often as they like, as long as the amount is available to grant (ATG).
