A donor advised fund is a philanthropic partnership between Rose Foundation for Communities and the Environment and the donor. In developing this relationship and administering a donor advised fund, the Foundation’s goal is to help the donor define, implement and realize their own unique philanthropic vision. Using parameters developed in consultation with the donor, the Foundation develops funding recommendations tailored to each donor’s personal interests. Donors receive regular reports detailing the status of their fund, and outlining any grant awards or other funds disbursed, as well as administrative costs.
Some donors prefer to use the Foundation as their “charitable checkbook,” making a single annual donation and asking Rose Foundation to execute a series of recommended sub-grants. In other cases, donors may chose to make a series of gifts which can be pooled together to support grant recommendations. Donors may also chose to partner with the Foundation to build a permanent endowment, sometimes in memory of a loved one, or designating their children to help as fund advisors. Regardless of how the fund is structured, Rose Foundation’s goal in any donor advised fund is to help donors take advantage of our experience and flexibility in designing a fund that specifically meets their own unique needs.
In any donor advised fund, and as required by charitable law, Rose Foundation’s Board of Directors must retain ultimate discretion over final grant decisions.
Our donor advised program has disbursed approximately $5 million over the past 25 years. Donor advised grants have included:
- Supporting women’s rights, Indigenous Peoples, social justice and environmental equity in the Untied States and throughout the world.
- Supporting conservation of wild lands throughout California.
- Encouraging sustainable planning, green infrastructure and environmental health protections as part of the redevelopment along San Francisco’s waterfront.
- Supporting environmental and general education programs in schools throughout the Bay Area.
- Helping provide free scientific experts to nonprofit environmental organizations.
- Supporting arts and peace organizations.
Structured Grantmaking Process
Applicants for grants from donor advised funds are required to provide the Foundation with a written workplan and budget, and to provide follow-up reports documenting activities funded by the grant and evaluating progress toward project goals. This allows Rose to hold projects accountable for the work we fund, and helps donors evaluate the impact of their support. However, we don’t impose unnecessary bureaucracy on donor advised grantees, and we streamline our diligence process as appropriate to the recommended grant size. Depending on the donor’s wishes, we can either let the grantees know who provided their funding or keep the ultimate funding source confidential.
How Donor Advised Funds Work at Rose Foundation
In a donor advised fund, Rose Foundation serves as the donor’s charitable checkbook, helping the donor manage some or all of their donations through a single, easy-to-manage fund. Some donors make a single, fully-deductible contribution to the Foundation each year. Others prefer to make a large tax-deductible gift which can support grantmaking for many years, and/or grow their fund over time with a series of gifts. In any case, making gifts in the form of appreciated securities may significantly increase tax benefits. Donors may also chose to donate other assets, such as real estate, which Rose Foundation can liquidate and place the proceeds in the fund.
Depending on a donor’s wishes, the Foundation can move quickly to execute a series of grants to pre-selected charities, or hold the funds in trust to allow time for more thoughtful consideration. In either case, IRS regulations require that the donor (or donor’s family) does not receive benefits from the grants. Based on the donor’s interests and instructions, the entire amount of their gift may be awarded as grants, or it can be carried over from year to year to support future grantmaking.
Permanently Endowed Funds
In a permanently endowed fund, the Foundation’s goal is to maintain and grow the corpus donation while using annual earnings to support grants to charities close to the donor’s heart. The Foundation places donor advised endowments in a separate named account, and all interest and earnings accrue to the endowment. Endowments require a minimum of $100,000 to start and donors may add to the corpus at any time. Permanent endowments are managed in accordance with high standards of financial prudence plus consideration of environmental and social criteria. We are pleased to report that the Foundation’s endowments enjoy returns which match those of the broad market indices, while the weight of the corpus supports Rose Foundation’s overall mission of environmental conservation, social justice and people’s rights. The Foundation charges an annual endowment management fee of 1% or less, depending on the size of the endowment. Based on endowment size and the type of grants envisioned by the donor, there may also be specific grantmaking charges.
Prizes are annual cash awards recognizing outstanding accomplishments in a field of environmental endeavor close to the prize founder’s heart. In many cases, the prize founder chairs an advisory committee which assists in selecting the recipient organization. The Foundation produces and distributes application materials, and provides pre-screening and administrative support to the advisory committee. The minimum donation to establish a Prize is $25,000.
Supporting Designated Charities Over Time
Rose Foundation can also maintain an endowment on behalf of a designated charity, or set of charities, and use the proceeds to award grants to the chosen charity. In these types of funds (sometimes called “Single Entity Funds”), a donor is able to provide for the permanent support of their favorite charities, ensuring that their gift will meet future, as well as present, needs. This option may be appropriate when the designated beneficiary does not have experience in managing a large donation, or when the donor wants to establish an oversight mechanism to ensure that the future use of the funds stays true to their original intent.
Donor Advised Fund Costs
To defray the costs related to setting up the fund and initial administration, the Foundation charges a 1% fee upon receipt of the gift. To defray grantmaking costs (including researching donor fields of interest, due diligence on recommended grant recipients, grant administration and accounting and donor reports, the Foundation charges 5% of the value of each grant awarded. Due to their larger size, endowments and single entity funds often have reduced fee structures which reflect the economy of scale achieved with larger funds.
To Establish a Donor Advised Fund
To establish a donor advised fund, or to explore the potential options, please contact:
Tim Little, Executive Director
510-658-0702 ext. 301
tlittle[AT]rosefdn.org (replace [AT] with @)