Donor Advised Funds and Charitable Distribution Accounts

Donor Advised (or Committee Advised) Fund and Charitable Distribution Accounts are similar types of funds that give donors the opportunity to recommend grant recipients. Within the Community Foundation of Shelby County, a Donor Advised Fund tends to be a long-term fund that typically spends the income or total return gained from the investment of the charitable fund’s assets. A Charitable Distribution Account is shorter-term with the intention of disbursing the balance until it is depleted.

Donor Advised/Committee Advised Funds
Individuals, couples and families enjoy the grantmaking flexibility a donor advised fund offers. Instead of committing the charitable fund’s grants to a designated organization or cause, a donor advised fund can affect multiple and changing grant recipients.

These funds are often compared to private foundations, but have many more advantages. Foundation comparison (pdf)

Some families get together each year to discuss organizations to receive grants. Some donors have asked that a committee review grant applications and make recommendations regarding recipients.

After the death of the donor advisors, the charitable fund can list a cause, community or organization to receive grants in the future. The charitable fund can also become unrestricted to enable the Community Foundation board to award grants that impact changing community needs.

Charitable Distribution Accounts
The Charitable Distribution Account is a vehicle for handling charitable gifts with maximum simplicity and flexibility. Almost anyone who gives to charity can save time and money through the use of a Charitable Distribution Account.

A gift of cash, securities or other appreciated property enables you to establish an account. A charitable deduction from income tax is earned at the time of the gift. Contributed assets are then sold (free of capital gains taxes) and the net proceeds are credited to the account you establish. Any market fluctuation between the date of the gift and the date of the sale will be credited or charged to the donor’s account.

The Foundation may distribute grants from the account to your favorite qualified charities anywhere in the United States. Distributions can be made in any amount, all at once or over time.

More information on CDAs.