A Fun(d) Refresher

At CICF, we know that charitable giving is deeply personal and that choosing the right tools matters just as much as choosing the causes you care about.

Whether you are considering establishing your first fund with the community foundation or considering adding another fund to complement the ones you already have, it can be helpful to step back and consider how different options support different goals.

Donor-advised fund 

Donor-advised funds (DAFs) are one of the most popular charitable giving tools because they make it convenient to support a wide range of nonprofits while maintaining a clear, organized approach to philanthropy. With a DAF, you can make contributions of cash, stock, or other property at your convenience, and these gifts are eligible for a charitable tax deduction in the year of the gift. Separately, they allow you to recommend grants to your favorite IRS-qualified charities over time. You can select a name for your DAF and, if you choose, limit the personal information that gets shared with recipient organizations.

Designated fund

Maybe you’re focused on making a lasting impact on a single organization (or a few, select organizations). In that case, a designated fund may be the right addition to your charitable portfolio. A designated fund provides ongoing, predictable support to a specific nonprofit, either through regular distributions or grants made as needed. Because we provide stewardship of the fund’s assets, a designated fund offers stability and continuity for the organization it benefits. This type of fund can be especially helpful if you want to “bunch” multiple years of giving into a single year for tax purposes while ensuring continued support for a favorite charity over time. Plus, if you are age 70 ½ or older, a designated fund (unlike a donor-advised fund) can receive Qualified Charitable Distributions from your IRA.

Unrestricted fund or field-of-interest fund

Some donors are drawn to a different approach: focusing on the community’s most pressing needs, now and in the future. For these donors, an unrestricted fund offers powerful flexibility. Unrestricted funds allow your CICF team members to direct resources where they are needed most as circumstances change. That might mean responding to a crisis, supporting emerging opportunities, or addressing long-term challenges like housing or education.  With a field-of-interest fund, you determine the specific impact area(s) that you want your fund to focus on, and the team uses their community knowledge and expertise to award grants to non-profit organizations aligned with your focus areas.

If you are age 70 ½ or older, remember that both unrestricted and field-of-interest funds are eligible recipients of Qualified Charitable Distributions.

Adopt a portfolio approach

Many donors at CICF choose to establish more than one type of fund over time, building a thoughtful and diversified approach to philanthropy that reflects both their values and their evolving priorities.

Wherever you are on your charitable giving journey, we are here to help. It is our privilege to partner with you, provide guidance, and support your generosity in ways that strengthen the community we all care about. Please reach out anytime—we would love to talk with you.