Facebook’s under-30 Mark Zuckerberg led US philanthropy in 2013 with a gift of almost $1billion in company stock to the Silicon Valley Community Foundation. Aside from this being a stunning benefaction by any measure SCVF is one of the nation’s best run. Its CEO Emmett Carson is an experienced and very highly regarded foundation executive.
Why do some people choose giving to community foundations and others set up their own? The simple answer is that, like anything else in business or philanthropy, trust is the critical factor
Zuckerberg is clearly willing to hand over much of the decision making about which charities should be the ultimate beneficiaries to Carson, rather than his own staff. And in this instance that makes good sense. SVCF is literally down the road, it’s been in business a long time and one can venture that Dr. Carson will know when to check in.
But not all community foundations are equal; size alone does not ensure empathic gift making, good management or satisfying consultation with donors. Managing large investment portfolios is not for the faint of heart; some of the highly regarded community foundations as well as the commercial entities like Fidelity or Vanguard are rightly focused on managing the money. Their deep down knowledge of the charities themselves, and the charities’ capacity to use resources effectively and efficiently is often a mixed bag at best.
FFM/C’s take is that we are not right for everyone. A donor advised fund at a community foundation may be the best choice for a number of reasons – among them the founding donation, the yield available for annual distribution, the willingness to cede a lot of control, the desire to avoid the hassles and expense of foundation management, picking charities, etc.
But some people enjoy giving and derive immense pleasure out of acting as a family, often knowing the charities, seeking real involvement – and frankly some crave the recognition. For them FFM/C is a choice.
Think about your motives. Act on your principles.
Thanks for this column, Hank.
Transferring money to a donor advised fund results in a tax deduction for the donor, but those funds need to get out into the world where there is so much philanthropic work to be done. There is a HUGE amount of money “locked up” in these funds. As a result are proposals to require a 5% annual payout from DAFs, similar to that required of private foundations. See Ray Madoff’s article in the Chronicle of Philanthropy
If you have a DAF, talk to me or Hank. Let’s find ways to put these funds to work in a way that is both useful in the world and satisfying to you.