Small Foundations Increasingly Choose Donor Advised Funds

from Investment News:

Small foundations eye donor-advised funds

Donor-advised funds are benefiting from small family foundations’ closing or suffering drops in endowment assets as the costs and administrative burden of running the foundations have become too great.

… Fidelity Investments’ Charitable Gift Fund, the largest donor-advised fund, with $5.6 billion in assets, said that private foundations contributed about $30 million to funds in the one-year period ended June 30, up from $16 million a year earlier.

Schwab Charitable, the philanthropic-services division of Charles Schwab & Co. Inc. that has the second-largest donor-advised fund, with $3.1 billion in assets, saw about $28 million converted from foundations to donor-advised funds during that period, double the amount of the previous year. Before last year, the annual amount was between $3 million and $4 million.

The Vanguard Charitable Endowment Program, the third-largest donor-advised fund, with $2.3 billion in assets, said that 82 private foundations contributed $34 million in assets to a fund in the 12-month period ended June 30, and 51 foundations transferred $15 million in the comparable period a year earlier. From 2003-09, the annual average was 28 transfers, with assets coming in at about $15 million a year.