When discussing donor-advised funds with local philanthropists, a common question we hear is: What’s the difference between opening a community foundation fund versus a commercial gift fund?
The simple answer is that donor-advised funds at community foundations, like San Diego Foundation (SDF), provide philanthropists with opportunities to strengthen their community and maximize the impact of their charitable giving in ways that commercial gift funds at firms cannot.
5 Reasons to Consider Community Foundations
Here are five reasons to consider opening a donor-advised fund at a community foundation versus a commercial firm:
- Keep your giving local.
Many donors I speak to prefer to keep their giving local and to support multiple nonprofit organizations. Community foundation staff have deep community insight and local charitable giving expertise to simplify your giving.
- Concierge-level service.
While you may have access to online support at a commercial firm, you’re less likely to have a dedicated relationship manager to assist with your grantmaking personally. Community foundations understand your philanthropy is personal.Our Giving Team, is here to help donors with grantmaking needs and often meets with you to discuss philanthropic strategies, including giving to nonprofits. Additionally, our staff have deep, long-standing relationships with the San Diego nonprofit community and can produce custom nonprofit research reports to inform grant recommendations better.
- Opportunities to connect.
Interested in connecting with other like-minded local philanthropists? Community foundations typically host networking events and public convenings to discuss philanthropy and community challenges and opportunities. SDF annual signature events include our Annual Meeting, Scholarships Celebration and Investment Summit. Our donors also are invited to “behind the scenes” tours at local institutions.
- 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 the quality of life in local communities. Also, depending on your investment fund choice, SDF may offer lower investment fees than commercial gift funds.
- Access to institutional investing. A professionally-managed account at a financial services firm typically requires a minimum investment of $100,000. If you open a fund with less than $100,000, you’re likely limited to a retail fund offered by a parent company. Not every philanthropist has $100,000 to open a DAF. DAFs at SDF can be opened for $25,000. At community foundations, you can access sophisticated institutional investing options (including private equity and hedge funds) and socially responsible investment strategies by opening an endowed or non-endowed, donor-advised fund. San Diego Foundation equips fund holders with a world-class investment committee and in-house Chief Investment Officer to maximize philanthropic dollars.