The Donor Advised Fund: Changing the Landscape of Individual Philanthropy March 2, 2017

What are Donor Advised Funds? Donor advised funds are set up at a public charity 501(c)(3) on behalf of organizations, families, or individuals. Donors open a fund and deposit cash, securities, or other assets, receiving the maximum allowed charitable tax deduction in the year they make the gift. Donors choose how the funds are invested, and advise on how funds are distributed. Donors have maximum flexibility on where and when grants to charities are made.

Size of the DAF Market (2015) Total Charitable Assets: $78.64 Billion (+12%) $22.26 Billion in Contributions to DAFs Donors Gave $14.52 Billion to Qualified Charities Total # of DAF Accounts: 269,180 Average Value of DAF: $235,727 From National Philanthropic Trust, 2016 Report

Why Do Donors like DAFs? Flexibility Efficiency Accessibility Donors make contributions when, where, how they want Families can plan their charitable grantmaking now and into the future No distribution requirements (although most CFs have dormant fund policies) Efficiency One-stop shopping for charitable grantmaking Accessibility Compared family foundations, fewer rules governing distributions, reporting requirements, meeting requirements, board leadership

Where DAFs are Held (# of Funds)

Grant Distributions from DAFs ($Billion)

Myth #1: DAFs are used to hoard, not distribute dollars Dollars in a DAF are designated for charitable purposes only Any growth in a DAF – from investments or contribution of principal – plows into charitable uses Dollars in a DAF are granted out faster than they grow as investments (few investments will yield the 20.7 percent payout rate in 2015) DAFs help to instill a habit of giving, year after year

Myth #2: DAFs are taking over the charitable landscape While DAFs are one of the fastest growing charitable vehicles today… they pale in comparison to the assets of private foundations in the US

Myth #3: Donors lose control of their philanthropic assets Fundholders advise on the giving from their DAF Even with their different ways of advising donors (from online to highly personalized), national firms, community foundations and single issue charities all have mechanisms in place to ensure they honor donor intent DAFs enable many kinds of people, and nut just the uber- wealthy, to engage in philanthropy and build their charitable legacies

What Sets CFNJ Apart Highly personalized donor experience, where donor intent is paramount Proven ability to foster, nurture and build relationships with donors, communities and organizations Deep knowledge about the NJ non-profit landscape: we know the best people and organizations doing great work in communities across the state Connections to other community foundations nationally to bring important issues and best practices to fundholders and the community Track record of sustained excellence in NJ

How to Work with CFNJ Tell us about what your organization does and what critical issues you are addressing Provide written or digital material for our learning library about organizations Identify partners and collaborations that show how your work connects to others in the community We will: Consider which existing funds have interest in your work Introduce our fundholders to your work and facilitate any further interactions: remember that donors drive the process Connect you to other grantees who may benefit from your expertise