Donor-Advised-Fund, a vehicle which allows one to place money into an investment account where it can only be used to make charitable donations. It allows you to commit yourself to giving (you can’t take the money back to spend on beer) even if you don’t know what’s best now, or can allow you to accumulate donations over time so that you can get leverage with the simultaneous disbursal of a big chunk. Here’s the Fidelity DAF site.
When you’re giving a large donation all at once, the transaction costs of meeting your demands are smaller relative to the gains, and the transaction costs of doing nonstandard donations (e.g. teaming up with others to create a whole new program or organization) are more manageable.
I don’t get it, why would you want to make demands? Isn’t the point of donating that you think others are better positioned to accomplish goal X than you are, so they’re able to make more efficient use of the money?
E.g. demands for work to be done providing information to you, or to favor a specific project (although the latter is more murky with fungibility issues).
Charities sometimes favor the work they believe to be popular with donors over the work they believe would be more useful. Specifically, I’m thinking of monitoring and evaluation. By designating money for unpopular but useful tasks, you encourage them to better fund it. Before doing this, I would talk to the organizations you’re considering funding and find out what unsexy projects they would like to fund more. Then decide if you think they’re worth funding.
DAF?
Donor-Advised-Fund, a vehicle which allows one to place money into an investment account where it can only be used to make charitable donations. It allows you to commit yourself to giving (you can’t take the money back to spend on beer) even if you don’t know what’s best now, or can allow you to accumulate donations over time so that you can get leverage with the simultaneous disbursal of a big chunk. Here’s the Fidelity DAF site.
I like the site!
The limits may be a little frustrating for some potential users… you need to start with US$5,000. (And pay a minimum of $60 per year in fees).
What exactly do you mean by leverage?
When you’re giving a large donation all at once, the transaction costs of meeting your demands are smaller relative to the gains, and the transaction costs of doing nonstandard donations (e.g. teaming up with others to create a whole new program or organization) are more manageable.
I don’t get it, why would you want to make demands? Isn’t the point of donating that you think others are better positioned to accomplish goal X than you are, so they’re able to make more efficient use of the money?
E.g. demands for work to be done providing information to you, or to favor a specific project (although the latter is more murky with fungibility issues).
Charities sometimes favor the work they believe to be popular with donors over the work they believe would be more useful. Specifically, I’m thinking of monitoring and evaluation. By designating money for unpopular but useful tasks, you encourage them to better fund it. Before doing this, I would talk to the organizations you’re considering funding and find out what unsexy projects they would like to fund more. Then decide if you think they’re worth funding.