Go ErinGo! Fund Giving

A core motivation for my travels was to volunteer with nonprofits along the way and support worthy organizations both overseas and at home. That’s why I formed a charitable fund, the GoErinGo! Fund, before I left on my 2-year adventure.

The GoErinGo! Fund is a charitable gift fund, which is more commonly referred to as a donor-advised fund (DAF). Now, I used to sell DAFs for big banks and brokerage houses, so I was well aware of their advantages. Overall, I think they are a fabulous way to give to charity. Here’s why:

Increase Your Giving

Since the GoErinGo! Fund’s inception on Oct. 4, 2010, I have earned 22% on my invested funds, bringing my charitable gift fund value to $36,676 as of last week. That’s amazing!

Here’s how it works: I made 2 initial donations to the fund, followed by another injection of donations by friends who wanted to support my charitable work overseas.

• Oct. 4, 2010 – $5,000
• Dec. 13, 2010 – $25,000
• Sept. 30, 2011 – $300 (donations from friends)

So total fund donations were $30,300. And exactly 2 years later, as of Oct. 4, 2012, the gift fund has a cumulative value of $36,676. So because my fund investments are doing well, I am able to give away an additional $6,376 to charities during my travels. *So cool*

GoErinGo! Fund Donations

I breakdown the GoErinGo! Fund donations every month and display the new numbers on the front page of the www.GoErinGo.com site.

Here’s the fund’s most recent:

• Giving Overview (average gift amount, U.S. vs. international giving)
• Giving by Sector
• Giving by Specific Organization

Maximize Your Investment

To increase my fund’s giving potential, I invested the funds in a Fidelity Charitable Gift Fund, choosing the “Balanced Pool” strategy. This means the GoErinGo! Fund is structured as follows:

• Objective: Seeks high total return with reduced risk over the long term.
• Strategy: Maintains a neutral mix over time of 50% equity, 40% bonds, and 10% short-term/money market instruments.
• Underlying Fund: Fidelity Asset Manager 50%.

DAF Advantages

I chose to open a DAF (instead of other charitable giving vehicles like a private foundation or trust) for a number of reasons:

1. Increased Giving (as demonstrated above)
2. Giving Flexibility – I could make donations during a single year (receiving the full charitable tax deduction for that year: 2010), but I am able to distribute the donations over time.
3. Increased Protection – Due to Patriot Act issues concerning the funding of terrorist organizations, Fidelity acts as an intermediary, verifying that all my suggested grants go to bona fide nonprofit organizations.

DAF Restrictions

Obviously, I think DAFS as a great charitable giving option, but you should be aware that:

• All donations are final
• Investments can go down
• Grant requests are merely “recommendations.” Fidelity is responsible for the legality of all charitable donations and may deny a grant request.
• To give to an organization based overseas, the GoErinGo! Fund needs to work with an affiliated U.S-based nonprofit, that will then transfer the money to their overseas subsidiary.
• DAFs charge administrative fees.

DAFs Facts

In 2011, the DAF market was valued at $5.57 billion, an increase of 28.6% from 2010. During 2011 alone, donors contributed $1.47 billion to their funds and granted $1.25 billion to charities.

More than 52,000 funds exist and the average amount in a each fund is $106,072. The minimum amount to open a fund is a donation of $5,000.

Interested in opening your own charitable fund? Here’re the Top 10 DAFs in the U.S.:

1. Fidelity Charitable Gift Fund
2. Schwab Charitable Fund
3. Vanguard Charitable Endowment Program
4. National Christian Foundation
5. Jewish Communal Fund
6. National Philanthropic Trust
7. Silicon Valley Community Foundation
8. New York Community Trust
9. Chicago Community Trust
10. Jewish Community Federation of San Francisco, the Peninsula, Marin and Sonoma Counties

*These photos are from an exhibit at the Museo de Oro, in Bogota, Colombia

Tags: DAFs, donations, donor advised funds; Fidelity Charitable Gift Fund, giving

This entry was posted on Monday, October 8th, 2012 and is filed under The Giving Guide.