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What is a Donor Advised Fund?
A donor advised fund is a fund created between a sponsoring community foundation and a
donor through a written agreement, under the legal entity of the community foundation. The
donor agrees to contribute assets to the community foundation and the community foundation
agrees to treat those assets as a separate fund on their books. The donor is given a privilege to
recommend grants from the fund and recommend how the foundation should invest the fund’s
What is the difference between a community foundation and a private foundation?
A community foundation is a tax exempt public charity that pools charitable gifts from many
individuals, families, and businesses, and utilizes coordinated investment and grantmaking to
maximize the donor’s charitable giving dollars and minimize expense. A community foundation
is dedicated to using its charitable assets to benefit a specific geographic area.
In contrast, a private foundation is not a public charity. Private foundations are generally set up
by an individual, a family, or group of people for a philanthropic purpose. Private foundations are
required to apply to the IRS for tax-exempt status. They are required to have their own
organizational structure, and are subject to certain excise taxes on investments that community
foundations are not. Additionally, private foundations must distribute a certain amount of their
net asset value annually and the appointed board is responsible for managing the foundation’s
investments and grantmaking. A private foundation generally does not solicit funds from the
I already write checks to a charity every year, why should I invest with the Community Foundation?
The Community Foundation is an ideal choice for donors who want to make a tangible,
measurable impact in their community, and to see that impact in action – The Community
Foundation offers far more than simple grant transaction services, we offer site visits, reporting,
and ongoing opportunities to connect with other donors and staff working on issues important to
you. The Community Foundation allows you to see the difference you’re making on the ground.
The Community Foundation also makes giving simple and convenient – we take care of complex
administrative issues and tracking so you don’t have to. With The Community Foundation, giving
is simple, personal, and effective.
What happens to my assets after I contribute them to the fund?
We will work with you to determine what investment options are best for you. You may choose to
invest your fund assets in our Combined Investment Fund, in our Central Investment Account if
you have cash assets, or if your account is $100,000 or more, your fund may be invested with an
outside investment advisor.
Can I include my fund in my estate plans?
Yes. We are happy to discuss planned giving options with you, and/or your attorney, at your convenience.
What is the Legacy Society?
The Legacy Society recognizes donors who have made a planned gift or commitment in the
form of bequests, trusts, life insurance, charitable gift annuities, split interest gifts or through
other provisions in their estate plans for a future gift to The Community Foundation.
How much of my fund can I gift each year?
There is no minimum or maximum recommended grant amount that must be withdrawn from
your fund annually. A Donor Advised Fund is our most flexible fund, which allows you to make
grant recommendations at your convenience.
How much does it cost to create a fund?
An administrative fee is assessed annually based upon the size of your fund and the investments
chosen. The fee covers the Foundation’s costs to provide meaningful and personalized donor
services such as reviewing potential grant recipients, processing grant requests, and grant
distributions, as well as completing the required IRS documents.
What kinds of organizations can I recommend for grants?
As a community foundation, we are able to make grants to any charitable, educational, religious,
or public entity to address its philanthropic objectives. In addition, the Foundation is able to make
grants to for-profit enterprises, to non-charities, and to foreign charities, so long as the
Foundation is able to firmly establish the charitable benefit of such grant distributions. Grants to
for-profit enterprises, individuals, non-charities, and foreign charities may require significantly
more pre-grant analysis and post-grant monitoring.
Can I recommend a grant to an individual?
According to IRS regulations, The Community Foundation can make distributions only to
qualifying nonprofit organizations from Donor Advised Funds. There are other vehicles, however,
such as scholarship funds and field of interest funds that do allow grants to individuals in
certain circumstances. Our staff can work with you to craft an approach that meets the
requirements and satisfies your giving goals.
Can I recommend grants to organizations outside of the Washington metropolitan region?
Yes, while we do encourage donors to give where they live and support the metropolitan
Washington region, donors may recommend grants to any qualified organization in the country
as well as to groups overseas.
Can I recommend a multi-year grant from my fund?
Yes. At the time of your recommendation, please indicate that you wish the gift to be made in
increments and specify the timeframe. We will administer the distribution and payment
schedule. Please remember you may not pay a pre-existing legally binding pledge from your
Who can recommend grants from my fund?
Anyone on record as a donor advisor for your fund can recommend grants from your fund. You
can choose to add your spouse, child, family member or a friend to act as an additional advisor
to your fund. The Foundation will consider written requests to add additional advisors to your
How long will my fund exist?
Your fund can last forever, if you wish. You can choose to recommend grants of only the
income earned from the assets in your fund or you can recommend grants of principal.
What happens to my fund after my lifetime?
We encourage you to name a successor advisor(s) to succeed you in making grant
recommendations for your fund in the event you become disabled or upon your death. If you
do not name a successor, the Foundation’s Board will continue to make grants from your
fund in accordance with your wishes.
Can I recommend grants anonymously?
Yes. You can request that the following be anonymous: fund name; donor name(s); both
fund name and donor name. We will honor your request.
Can I get a refund of my gift to the Foundation?
No. All contributions to The Community Foundation represent an irrevocable contribution to The Community
Foundation for the National Capital Region and are nonrefundable.
I don’t live in the Washington, DC region. Can I still use your services? Yes.
I want to make grants to a specific type of organization but I am not familiar with any. Can the
Foundation help me identify some programs?
Yes. The Community Foundation’s Philanthropic Service team is highly knowledgeable about a wide variety of
nonprofit organizations and will be glad to work with you to identify grant recipients in your area of interest.
For more information:
Director, Corporate and Professional Services