Giving Smarter

Hurricanes in Texas, Florida and Puerto Rico; an earthquake in Mexico; wildfires in California; a mass shooting in Las Vegas. All of that has happened just this year.

No matter how long the list gets, whenever and wherever disaster strikes, it tugs at the heartstrings of Americans. People automatically want to help, most by giving money.

But how does a person help when the disaster is across the country or around the world and he or she does not know any of the local charities? Many people turn to donor-advised funds as a safe way to give money to worthy long-term causes and for immediate needs.

The lead that was poisoning the water supply in Flint, Detroit and other places around Michigan, making people sick—especially children—is a perfect case in point.

The story broke in late 2015 and continued for months. Like most disasters, the consequences to people will last long after the original headlines have faded.

“What typically happens in a crisis is the disaster gets a lot of national interest early on from people asking how they can help,” says Sherri Stephens of Stephens Wealth Management Group in Flint. “The government and big groups like the Red Cross step in immediately. Then the foundations and individuals step up and want to know where the most long-term need is and which local groups are legitimate.”

That is where a donor-advised fund can help, says Stephens, who works closely with the Community Foundation for Southeast Michigan. The foundation receives funds from numerous donor-advised funds, including some set up just for the water crisis.

Musician Bruno Mars held a concert that raised more than $1 million for the crisis. He established a donor-advised fund that received all of the money at once, but is now distributing it through the community foundation as it is needed, mostly to benefit mental health needs.

Likewise, Flint native Brandon Carr, who plays cornerback for the Baltimore Ravens football team, set up a donor-advised fund with the help of a financial advisor, and the grants will go to the community foundation over time, Stephens says.

Avery Buffa, the associate director of philanthropic advisory services at Northern Trust Wealth Management, says that after every disaster his firm has seen dramatic upticks in inquiries about where and how to give.