Updated Saturday, August 29, 2015 as of 9:37 PM ET

Donor-Advised Funds Outperforming Family Foundations

Among the very wealthy, family foundations long have been a common vehicle for charitable giving. However, more families than ever are skipping foundations altogether in favor of simpler and cheaper donor-advised funds.

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Comments (2)
Today there are outsourced service providers that in essence, do for private foundations what the financial institutions and community foundations do for donor-advised funds. They make private foundations easy to establish, and provide complete administrative support, removing most of the burden traditionally associated with private foundations. In addition, they provide advisory service to help families take full advantage of the unique and power giving options available only through a private foundation. For example, whereas grants to individuals are strictly prohibited from donor-advised funds, private foundations may make grants to individuals for scholarships, fellowships, and awards as well as to individuals who are experiencing an emergency, hardship or medical crisis.

For this reason, it's important that prospective donors consider in advance what they want to achieve with their philanthropy in order to properly determine whether a donor-advised fund, a private foundation, or both is the best strategy for helping them achieve their goals.
Posted by Tracy B | Wednesday, July 24 2013 at 6:22PM ET
This is pretty spot on. The philanthropy service provider will help the donor identify their vision, threshold for engagement and desired outcomes then partner with the financial advisor to craft the right vehicle to bring that through to fruition. The Foundation structure allows the donor to be more philanthropic and more of an activist with his/ her giving.
Posted by Christen G | Tuesday, August 13 2013 at 4:36PM ET
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