Donor Advised Funds

Because of the economies of scale in shared investment management and administrative costs, donor advised funds are considerably less expensive to administer than private foundations.  For this reason and for the tax benefits they offer, they have become an increasingly popular vehicle for individuals and families seeking greater philanthropic engagement. 

A donor advised fund is an open-ended account created by an individual or an organization for a specific or non-specific charitable purpose. It is referred to as a ‘donor advised fund’ because the creator of the fund serves as, or appoints, an advisor whose role is to recommend to the management of the fund where and when, and how much, distributions are to be made. Because they are the legal authority, the trustees of NCCF are responsible for either approving or declining the recommendations of the advisor. (In the case of NCCF rejections have been rare).

Its co-founders created NCCF to encourage and facilitate the engagement of individuals and families in ongoing philanthropy. To this end, NCCF urges fund donors to identify successor advisors – in a family usually members of a succeeding generation – to assure the family’s lasting philanthropic legacy.

Donor advised funds are quite flexible and can be as narrowly or as broadly established as the donor wishes. For instance, at NCCF donors have created various types of funds. One type is a donor designated fund where distributions are limited to a specific charity. Another is a field of interest fund where distributions are intended for a certain area of interest such as Catholic education, support for the elderly religious, etc. A third type would be a non-designated fund where distributions could be made to any legitimate charity. In certain cases, donor advised funds can be set up to support overseas charities closely aligned with the Catholic Church. Usually, the minimum initial contribution of $10,000 in cash or securities is required for a donor to establish a fund.