What is a Donor-Advised Fund?
Have you ever heard of a Donor-Advised Fund? A donor-advised fund is basically a fund where the funders pre-determine how the funds (or types of funds) are dedicated or “earmarked.” Imagine, for a moment, that you’re the donor. It’s like having your own personal giving account, but with the flexibility to support the causes you care about. You, as the donor, get to decide how your money will be used, giving you control in your charitable impact. It’s a simple way to streamline your giving while ensuring that your contributions make a lasting difference where it matters most. However, there are some definite distinctions between donor-advised funds and other general grant funding sources.
GrantWatch wants to help provide a better understanding of the donor-advised fund distinction and has provided a list of primarily nonprofit grants, all of which include donor-advised criteria. Using search filters and including the key phrase “donor-advised funds” will yield a list of grants that employ this type of funding. Additionally, there are close to 8,500 grants in the GrantWatch General Listings grant listing section.
Key Distinctions of a Donor-Advised Fund
investopedia.com, “Donor-Advised Fund Definition, Sponsors, Pros & Cons, and Example”
- Donor-advised funds are private funds for philanthropy.
- Donor-advised funds aggregate (combine) contributions from multiple donors and aim to democratize philanthropy by accepting contribution bases as low as $5,000.
- They offer tax advantages of up to 60% of adjusted gross income and can hold funds indefinitely.
- Donor-advised funds also accept non-cash assets, such as stocks, mutual funds, and bonds, as well as complex assets, such as private corporation (S-corp and C-corp) stock.
GrantTalk: Donor-Advised Funds
In a recent episode of GrantTalk, Libby Hikind chatted with Karin Beyer, Director of Community Philanthropy at Otsego Community Foundation in Michigan. Karin shared insights into their unique approach to grantmaking and community support, focusing on donor-advised funds and grant funding for nonprofits.
Primarily Nonprofit Community Grants, Some with a Donor-Advised Component
1. Capacity-Building Grants for Communities of Color!
Grants provide direct social services to communities of color to improve organizational capacity. Funding supports nonprofit board development, organizational operations, and improved financial management to better meet the needs of Asian, Latino, and Black communities. The purpose of the donor development plan for capacity-building programs is to identify and address primary organizational needs.
2. Funding for Alternative Canine Cancer Treatments!
There are grants to investigators for alternative canine cancer treatments. Funding is for novel/new treatments for dogs suffering from canine osteosarcoma. The focus of this donor-requested Request for Proposal (RFP) is for canine osteosarcoma, the most common primary bone tumor diagnosed in dogs.
3. Grants for Activities to Benefit the Local Community!
In addition, grants to eligible nonprofits for activities benefiting the local community. Funding is for programs addressing the needs of local residents. Areas of focus include health and human welfare, the arts, and education, with primary consideration for programs focusing on technology.
4. Funding for Organizational Capacity-Building Projects!
Grants for organizational capacity-building activities, including board and volunteer training, financial management, technology instruction, and donor development and fundraising planning. Projects will also focus on strategic and business planning, fundraising, and executive director recruitment or coaching.
5. Grants to Enhance the Well-Being of Local Residents!
There are grants to eligible nonprofits to enhance the health and well-being of local residents. Funding supports programs within the focus areas of health and human services; community development; education; arts and humanities; children, youth, and families; and the environment.
6. Funding for Community Benefit Programs!
Grants for nonprofits for community benefit programs. Funding promotes arts and culture, humanities, education, and health and human services. Priority consideration will be for program and capital support. There are donor-required special considerations.
7. Grants to Nonprofits for Community Benefit Projects!
Grants to nonprofits for programs benefiting the community. Funding supports projects in the focus areas of community and civic affairs, and economic development. Focus areas will also include arts and culture, education, health and human services, and non-denominational religious activities.
8. Enhancing the Quality of Life for Local Residents!
There are grants to eligible nonprofits and government agencies for projects and programs to enhance the quality of life for local residents and donor-stipulated areas.
9. Opportunity for Student Neuroscience Training!
An opportunity for an undergraduate or post-graduate student to receive neuroscience training. Priority consideration will be for students attending Historically Black Colleges and Universities (HBCUs), as well as students from other underrepresented and diverse backgrounds. The one year program will provide the recipient valuable hands-on neuroscience training directly from a team of neuroscience innovators at a hospital research laboratory.
10. Grants to Improve Organizational Capacity!
Grants to eligible nonprofits to improve organizational capacity. Priority areas of interest are data management and improvements to accounting and communication systems (donor management software).
11. Programming, Operations, and Capital Support!
Lastly, grants to nonprofits for programs supporting social change and strengthened communities, following stipulated Donor provisions. Funding is for programs, projects, operating support, and capital expenses. Focus areas include community development, capacity-building, arts and culture, humanities, health and human services, and education.
Hopefully, you’ve gained a better understanding of the purpose of donor-advised funds that will be of use as part of your grant-seeking considerations!
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