Here's another way the New Donor is seizing control: Donor advised funds. Run by investment companies, community foundations, and other types of organizations, donor advised funds allow donors to give large lump sums into the fund for the tax advantages, and then distribute them at their leisure.
There's a lot in it for a donor: Tax breaks, real ease of giving, and it gives them power. They give on their schedule, not the charities'. They can designate their giving to projects of their choosing. The Funds often vet organizations, so the donors needn't worry about efficiency, effectiveness, or the possibility of fraud.
Just the kind of power the New Donor loves to have. Here's investment columnist Knight Kiplinger praising donor advised funds in Philanthropy Made Easy.
They're not for everybody. For one thing, you typically need an initial gift of at least $10,000 to get into one. But with Boomers getting the avalanche of bequests from their dying parents, there are soon to be a large crop of people with some money to give away.
Are you ready? Two things you need to do:
- Market to donor advised funds. If the fund manager knows and trusts you, they'll steer donors your way. Marketing to them will not be much like fundraising!
- Respond properly to gifts coming from funds. When you get a gift through a fund, the check isn't from the donor -- but the gift is really from the donor. Do your data entry folks (or caging facility) know what to do with these gifts? I heard a horror story recently of someone who was a long-time high-end donor to a certain organization (one that's large enough to know better), who then gave a substantial gift through a fund -- and never got any acknowledgement. Do you want to do that to your best donors? If you're not prepared, you just might.