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%.
I chose to open a DAF (instead of other charitable giving vehicles like a private foundation or trust) for a number of reasons:
- Increased Giving (as demonstrated above)
- 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.
- 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.
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.
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.:
- Fidelity Charitable Gift Fund
- Schwab Charitable Fund
- Vanguard Charitable Endowment Program
- National Christian Foundation
- Jewish Communal Fund
- National Philanthropic Trust
- Silicon Valley Community Foundation
- New York Community Trust
- Chicago Community Trust
- 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
This entry was posted on Monday, October 8th, 2012 and is filed under The Giving Guide.