Selecting a donor advised fund from the about 1,000 that are available can be a daunting task for advisors and potential philanthropists. But now there is a website that sorts the details and ranks the best donor advised funds.
DonorAdvisedFunds.com ranks funds by criteria such as ease of use, investment options and minimum account size, said Brad Saft, founder and CEO of DonorAdvisedFunds.com.
The top five funds, according to DonorAdvisedFunds.com, are Greater Horizons, sponsored by the Greater Kansas City Community Foundation; the Independent Charitable Gift Fund or iGiftFund; the National Christian Foundation Giving Fund; Schwab Charitable; Bradley Impact Fund; and Fidelity Charitable Giving Account.
Saft, an entrepreneur who has started several companies, created the website and rankings because of his personal frustrations with trying to find information about DAFs.
“I found that there was no resource to help advisors and individuals navigate the options available, or even who sponsored the funds,” Saft said in an interview. “Many people end up setting up a fund with one of the big sponsors just because the information they need is not there. I wanted to educate people about the benefits of a DAF and allow them to explore the different options.”
The website allows potential donors to learn the basics about DAFs and helps them to determine such things as the investments that are possible through a particular DAF, what focus the fund has, what its fees are, and the minimum requirements, he said.
It took Saft and his colleagues more than a year to determine what criteria should be used in rating the DAFs, known as DAFScores, and how each criteria should be weighted. DonorAdvisedFunds.com has not ranked all 1,000 DAFs yet, but is in the process of doing so.
“For a long time philanthropic planning was not part of a financial advisor’s services, but it is obvious charitable giving is important to people, especially younger people. Philanthropic planning is something that can add value to an advisor’s services,” Saft said.
There are misconceptions about DAFs that Saft hopes to help dispel.
“Many people think DAFs are just for the very wealthy, which could not be further from the truth. The average size of a DAF is $200,000, not millions, and many have low or no minimums for opening a fund,” he said.
A donor advised fund allows the donor to put money into the fund when it is most tax advantageous to the donor, and then make specific donations to a charity or cause when needed, he said. It also allows donors to give non-liquid assets, and allows assets in the fund to grow until they are distributed.
Three types of DAFs exist: national, community, and single issue. “A DAF does not have to be large to receive a high ranking. Just because they are not national, does not mean they cannot do an outstanding job,” Saft said.