When discussing donor-advised funds with local philanthropists, a common question I hear is: What’s the difference between opening a community foundation fund versus a commercial gift fund?
The simple answer is donor-advised funds at community foundations, like The San Diego Foundation, provide philanthropists with opportunities to strengthen your community and maximize the impact of your 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.
At The San Diego Foundation, 84.7 percent of all recommended grants go to San Diego County nonprofits. In Fiscal Year 2018, The Foundation awarded $67.4 million to the San Diego community.
- 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 personally assist with your grantmaking.
Community foundations understand your philanthropy is personal.
Our Charitable Giving Team, is here to help donors with grantmaking needs and often meets with you in-person 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 better inform grant recommendations.
- 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.
The San Diego Foundation annual signature events include our Annual Meeting, Donor & Legacy League Appreciation Luncheon, Scholarships Celebration and Investment Summit. Our donors also are invited to “behind the scenes” tours at local institutions.
Furthermore, The Malin Burnham Center for Civic Engagement at The San Diego Foundation brings community together to learn about and discuss social challenges and opportunities in the region, including public convenings focused on air quality, recidivism, childhood trauma, civil rights and more.
- 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 choice, The San Diego Foundation may offer lower investment fees than commercial gift funds. The Foundation also provides a social equity fund
- 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 donor-advised fund. Donor-advised funds at The San Diego Foundation 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. The San Diego Foundation equips fund holders with a world-class investment committee and in-house Chief Investment Officer to maximize philanthropic dollars.
The long-term investment return rate for our Endowment Portfolio is 8.6 percent over the last 10 years, outpacing the Policy Index. (Updated October 2019 with the latest investment return rate.)
For more than 43 years, The Foundation and our donors have granted more than $1.1 billion to grow a vibrant San Diego region. Join your fellow San Diegans who are getting involved to improve our region, our cities and our neighborhoods.
About Julia Grant
As Director of Development, Julia works to increase the impact of charitable giving at The San Diego Foundation. Through donor-advised funds, planned giving, and other philanthropic vehicles she helps donors achieve their charitable goals. She is responsible for cultivating relationships with philanthropists new to The San Diego Foundation and strengthening donor and fund advisor relationships with a goal of establishing new funds and building enduring assets.