Purpose of Long-Term Charitable Funds
Annual donations are a primary source of many nonprofits’ day-to-day operating revenue. These gifts are particularly important during a crisis or recessionary periods, when often needs of those served are going up as other funding sources are going down. It is during such challenging times that long-term charitable funds are highly beneficial to charities.
Skeptics of long-term charitable funds sometimes argue that these funds do nothing but hold back funding that could be of immediate use. To their point, there is no timeline on when an advisor/donor should make a grant from a Donor Advised Fund (DAF) to another charity, so the argument may seem compelling. However, locally our experience does not support that argument. Most of our donors regularly issue grants throughout the year. They believe in the nonprofits they are supporting and want to help, including when times are unsettling. These giving vehicles are ready and willing to issue grants during good AND bad economic times. Most importantly, when other donors can’t afford to give, these workhorses of charitable giving carry the load and enable charities to continue serving people.
DAFs make it more convenient to give and allow many donors to contribute more. Therefore, they often lead to larger grants per donor over time. Plus, donors like consolidating their giving and having the ability to grant over time as needs develop. Long-term charitable funds provide a reliable source of income in perpetuity for our local nonprofits. Here at the Community Foundation, we truly value our partnership with our donors who believe in investing in our community now and well into the future.