'The Scottish Community Foundation helps me find, assess and monitor effective projects. Its a special skill giving away money and it is not a skill I possess.'
Angus Macdonald, Chairman, Specialist Waste Recycling Ltd

What are they

A donor advised fund is a flexible and easy way for your clients to support the organisations and causes they care about, now and in the future. As a donor, they can make gifts to their fund at any time receiving tax relief in the year in which a gift is made and then recommend that grants be made from the fund at any time to groups the wish to support.

Donors will receive full philanthropic service and customised grant portfolio development. Community foundations offer your clients experienced local grant programme staff and volunteers providing research, local knowledge, site visits and final reporting and monitoring to assist clients with making the most impact with their giving. They work with donors to explore their personal style of giving and investment considerations and assist the donor in identifying groups to support based on their giving preferences.

Highlights

• A donor advised fund may be created by an individual, family, group, corporation, business, or organisation.
• A donor advised fund may be named to recognise the donor(s), a family member or a friend, or the client may select a name that ensures anonymity.
• Donors can name successor advisers to the fund.
• Community foundations can accept several different assets as gifts to the fund, including cash, securities, property and legacy gifts. Read more ...
• A client has the option to establish a fund as an endowment (ensuring grants are made in perpetuity) or as a flowthrough (which allows your clients to make grants of any size at any time). Typically, endowments require a minimum gift of 25,000; and 10,000 to establish a flowthrough.
• Clients can build their fund over time - some foundations offer Acorn Funds for clients to contribute a smaller amount regularly (typically 1000 a year) to build up to the minimum needed for a Named Fund
• The funds' assets are invested with the community foundation and ring-fenced - or you can discuss the potential for your client's assets remaining under current management (this is only available for larger funds).
• Fees vary within the network. Read more ...
• Clients have a dedicated staff team to work with on all issues pertaining to their fund.
• Grants can be made in the name of the fund or anonymously.
• Clients have the opportunity for site visits to learn more about specific groups.
• Clients can request monitoring and reporting back for all grants made from their fund.
• The foundation handles all administrative responsibilities for the fund while keeping the donor fully informed and engaged. It ensures gifts are tax efficient.
• Donor advised funds provide opportunities to engage family members in learning more about their community and groups addressing community issues.

Establishing a DAF is easy

Community foundations have simple fund agreements that can be customised to fit your client's needs. Establishing a fund requires:

• a meeting with the foundation to discuss the clients needs, interests, and how they wish the fund to operate (professional advisers are welcomed and encouraged to participate in these meetings with the donor's consent);
• completion of a simple fund agreement; and
• a finalised transaction of the gift to the foundation.
  Then the client embarks on a philanthropic journey with the foundation to develop and fulfil their giving expectations.

Sample fund agreement

For more information about how CFN and its members can partner with you to serve your clients, please contact Clare Brooks, Director of Philanthropy or phone +44 20 7713 9326.