Donor-Advised Funds: Insight from the Experts

Donor-advised funds are a hot topic.  And no wonder.

According to a study released this fall by the National Philanthropic Trust, the assets held in these charitable funds increased almost 24% last year to a whopping $70.7 billion.  That’s huge.  Further, contributions coming out of these same funds grew by 27%.  It’s a big story no matter how you look at it (as the Chronicle of Philanthropy has reported).

As a board member of The Giving Institute (which researches giving in American through it’s annual study Giving USA) and the Coastal Community Foundation (which offers charitable giving vehicles to match donor wishes with community need), I am a student of donor-advised funds.  I know others join me both in fascination but also confusion as they seek to understand how these funds work and, more so, how nonprofits can better connect with the donors doing the advising behind the scenes.

This was the topic of the Gurin Forum, a 90-minute session hosted by The Giving Institute and the Giving USA Foundation this past November in Chicago.  

Stacy Palmer, the Editor in Chief of the Chronicle of Philanthropy, moderated a lively discussion about “The Future of Donor-Advised Funds: How Can Charities Adapt to Donors’ Shifting Giving Behaviors.”  She was joined by a well-curated group of experts representing the different constituencies involved, including a community foundation, an academic researcher and a fund-holder.

Much of the discussion centered around how nonprofits can best connect with the organizations donors choose to hold these funds for them and how to relate to the donors themselves once grants are, indeed, made.  The challenge is that, because of how donor-advised funds work, there are organizations sitting between the donors (doing the advising) and the nonprofits (doing the receiving).  But the donor on this panel advised attendees not to get too wrapped up in which vehicle she chooses to make her donations.  She has a donor-advised fund, but she also gives directly.  And that’s her choice.

On the topic of how to respond once the donor has given, Giving USA Foundation chair and expert consultant Keith Curtis advised that it is perfectly okay to do research into the donor and contact the person directly.  If the donor gave a nonprofit money, then they’re clearly some affinity there.  The nonprofit might need to work a bit harder, but it’s clearly worth the effort.

Also, although everyone on the stage had a position on donor-advised funds, they didn’t all agree.

And that’s what made it interesting.  So I invite you to listen in on the conversation and to the many questions that were posed both by the in-person and online audience.  If you are like me and are interested in learning more about a topic growing in importance in our business, click this link and get your pen and paper ready.  You’re going to want to take notes.

ABOUT THE AUTHOR

Rachel Hutchisson

Rachel Hutchisson is the vice president of corporate citizenship and philanthropy at Blackbaud, headquartered in Charleston, SC.  She is responsible for the company’s global corporate citizenship efforts, a role that allows her to leverage her 20+ years of experience of working with nonprofit partners.  She is a member of the board of directors for the Association of Fundraising Professionals (AFP) International, the Giving Institute (producers of Giving USA), and the Coastal Community Foundation.  She is also a Past President of the AFP SC Lowcountry chapter. Rachel is a graduate of Dickinson College in Carlisle, PA, and received a master’s degree from the University of Missouri School of Journalism.  A member of Phi Beta Kappa, she is a Renaissance Weekend participant and was the recipient of the Charleston Regional Business Journal’s Influential Women in Business Rising Star Award.  Rachel is an avid soccer fan and spends far too much time driving to remote parts of the state to watch her children play.  Connect with Rachel on Twitter at @RachelHutchssn or on LinkedIn.