Donor-Advised Funds: the Community Foundation advantage

Some Washington lawmakers have proposed changing U.S. tax laws to require Donor-Advised Funds (DAFs) to grant at least 10% of their corpus annually, according to the Council on Foundations. This would not impact most fundholders at Community Foundation Boulder County, where payout rates already average closer to 20%.
"Donor-Advised Funds allow donors to make a charitable contribution, receive an immediate tax benefit, and then recommend grants from the fund over time," says Lynda Ricketson, Vice President of Philanthropic Services.
But all DAFs are not created equal. There are notable differences between establishing a Donor-Advised Fund at Community Foundation Boulder County, or with a commercial provider.
“Donors who establish a DAF at the Community Foundation realize the same practical, financial, and tax benefits as those who work with Schwab, Fidelity Charitable, or other providers,” explains Lynda. “You can contribute cash or appreciated non-cash assets and securities to eliminate possible capital gains taxes, you can give whenever it’s convenient for you, and you can manage your giving online…all with the oversight of your own professional advisor, if you wish.”
Additionally, community foundations are more experienced in managing DAFs than commercial foundations. “Community Foundations were made for times like these, and DAF fees we earn help fund everything from our coordinated COVID response to fire relief,” says Lynda. “Plus, we’re able to provide a far more personalized approach to help donors achieve their charitable goals.”
Community foundations have been managing DAFs for nearly a century, whereas commercial DAFs have only been in existence about 25 years. “The Community Foundation Boulder County provides local donors extensive knowledge about community issues, as well as unique insights into the causes that individual donors care about most,” Lynda continues.
“We have the expertise and understanding to talk through donors’ giving goals, to connect them to the causes they’re passionate about, and to help them identify how to make a meaningful philanthropic impact.”
She adds, “Commercial providers tend to offer a much more transactional experience, whereas we have the same disciplined, ‘back office’ know-how, plus a deep familiarity and connection to our community. That’s the value-add that community foundations like ours bring to the equation, better mobilizing donors’ assets for maximum impact.”
The Community Foundation’s Philanthropic Services team is well-versed and proactive in helping donors and their families create customized philanthropic mission statements, guiding donor distributions in a timely manner to address specific community concerns, and helping donors make grants nationally and internationally, too, to support any interests they may have beyond our county’s borders. 
“It’s a magic moment when a donor is connected to one or more nonprofits, fulfilling and matching his or her philanthropic aspirations with the needs of our community,” she says. “Because the Community Foundation is also a grantmaker, we are steeped in the knowledge of grantmaking practice and, quite simply, community is our business.
That’s why the Community Foundation has become a trusted resource for local donors and professional advisors alike, providing philanthropic expertise and services that connect community-minded people who want to give, and the people and causes who need their support. Local professional advisors have come to rely on the Community Foundation to effectively advise their clients on the issues and opportunities for charitable giving – in Boulder County, and beyond. 
“Advisors know they can count on us to help educate their clients on a range of community issues, and ways to be in touch with our community,” Lynda says.
What’s more, the Community Foundation has been accredited by the Community Foundations National Standards Board, a supporting organization of the Council on Foundations. “That’s important because it means we follow the letter of the law and offer our donors full transparency.”                       
For more information and to create a Donor-Advised Fund, contact Philanthropic Services.
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