Supporting Small Charities with Purpose
This summer on the All About Estates blog charitable giving expert Malcolm Burrows shared his thinking about why Donor Advised Funds are a great option for donors who want planning certainty, but also flexible and dynamic support to one or more causes well into the future.
Written on July 23, 2013 – 6:28 am | by Malcolm Burrows
Some people view these figures with despair. There are too many charities, they say. There are too few that are well resourced. It’s easy to write off small charities that address specific needs in creative ways because of size alone. It’s easy to accept the “may the best fundraiser win” ethos that often prevails among large charities.
How does a donor make a gift by will to support small charities? From an estate planning perspective the challenges are very practical. Will the charity be effective in the future as it is today? Will it even exist?
These questions are why “purpose” charitable trusts were invented. They are intermediary entities that support the underlying charitable purpose, not a specific charity. If the charity is the vehicle for a purpose, over time the responsibility of a charitable trustee is to find the best vehicles to serve the purpose.
As someone who works at a trust company, I’m of the opinion that the modern testamentary charitable trust is the “legacy” donor advised fund. These funds reside within a public foundation, have clear tax treatment, are established today, and funded in the future, often by will. A donor advised fund provides planning certainty for the donor, but also flexible and dynamic support to one or more causes well into the future. It’s how to support small charities with large future gifts without mishap — or to advance a charitable purpose without naming any charities at all.Print PDF