Good news about donor-advised funds
Written by Diana Coyle, CICF Director of Nonprofit Services & Sustainability
Understandably, nonprofits often worry that donor-advised funds may delay or diminish their donors’ contributions. In reality, though, donor-advised funds can be very helpful to boost financial support for your mission. Three fundamental concepts are important to gaining a better understanding of how donor-advised funds work at the CICF Collaborative
Many options are available at the CICF Collaborative.
It’s important to note that a donor-advised fund is just one of many types of funds that an individual, family, or business can establish with the CICF Collaborative (which includes Central Indiana Community Foundation, Hamilton County Community Foundation, IMPACT Central Indiana, the Indianapolis Foundation, and Women’s Fund of Central Indiana). You’re likely more aware of donor-advised funds than other types of funds because they are frequently covered in financial media and also because your organization might have received grants from specific donors through their donor-advised funds. Dollars in donor-advised funds are already set aside for charitable giving, and it’s very convenient for donors to use their funds to support favorite organizations–like yours.
The CICF Collaborative encourages donors to give directly.
Rest assured that the team at the CICF Collaborative encourages donors to give directly to their favorite charities when that’s the best strategy to achieve a donor’s estate planning, tax, and charitable goals. When that’s not a viable option, though, both the donor and the charity benefit from the donor using a donor-advised or other type of fund at an entity within the CICF Collaborative. Examples include cases where the donor wants to give a complex asset, such as real estate or closely-held stock, or needs to plan out several years of giving to address fluctuating income levels and tax liability. Some donors also prefer to give anonymously, and a donor-advised fund can help with that.
Donor-advised funds are becoming increasingly popular.
Donor-advised funds are attractive vehicles to help donors organize their giving. In turn, donor-advised fund sponsors—including community foundations—continue to channel billions of dollars in contributions annually to thousands of charities through these vehicles. When donors begin giving through a donor-advised fund, their annual support for organizations often increases significantly, underscoring donor-advised funds’ potential to deepen long-term donor engagement.
The CICF Collaborativeis always happy to provide an overview of how these vehicles work and why donors set them up in the first place. Please reach out anytime.
About the CICF Collaborative
CICF Collaborative is a partnership of philanthropic organizations working together to strengthen communities across the region. Each entity within the CICF Collaborative (including the cornerstone entities, Central Indiana Community Foundation, Hamilton County Community Foundation, IMPACT Central Indiana, the Indianapolis Foundation, and Women’s Fund of Central Indiana) brings deep knowledge, strong relationships, and its own individual, focused mission. The CICF Collaborative unities the entities by providing shared services, allowing the entities to operate more efficiently and effectively. By leveraging what we each do best, we’re able to better serve our communities and create more lasting impact, together. Learn more »
About the Author
Diana Coyle, director of nonprofit services and sustainability, is dedicated to helping Central Indiana nonprofits access the tools, knowledge, and relationships they need to thrive. In collaboration with her CICF colleagues she supports CICF fundholders offering professional development, resources, and technical assistance that strengthen organizations and their leaders. With more than 15 years of experience in leadership and community engagement, she is committed to fostering connections that amplify the missions of nonprofits and create lasting impact across the region.