How to Grant from Your Donor-Advised Fund in a Down Market

hawkins@growyourgiving.org Individual & Family Giving, Professional Advisors

When the market is volatile, investment experts will tell you to keep your emotions out of your decisions and stay the course. But for many, charitable giving is inherently emotional. Stories of those in need tug at our heartstrings, and as the market turns downward, our communities’ needs grow. So it’s critical that we can access donor-advised fund assets to provide grants to charities at any time.

Assets in donor-advised funds are invested and grow tax-free. But because they are invested, they’re subject to market downturns, just like your personal investments.

We enjoy working with donors with a variety of investment strategies for their charitable dollars. Some are planning for the long term and building up their assets in their funds for major gifts. Others focus on short-term investments that will allow them to make more immediate impacts. The key is ensuring that your fund includes liquid assets (i.e., cash) for grants you want to make now.

Cash for grants and administrative fees is held in the money market pool, which serves as your liquidity account. In addition to the liquidity account, the Community Foundation allows you to use a percentage of your total fund assets for grants. That amount varies based on your investment allocation and the types of assets in your Fund. If you are planning to grant a majority of your fund’s assets, please contact us, and we can help you ensure you have sufficient liquidity to make your desired grants.

If you’d like to change your investment mix and add more liquidity, log in to your fund and visit the “investments” tab to change your investment mix. You can also make changes using our Investment Recommendation Form (PDF). Investment pools are valued monthly, allowing entry and exit on the last day of each month. If your fund’s assets are invested in a financial advisor managed account, contact us and we will work with your advisor to sell investments and transfer cash proceeds into your liquidity account.

Our team is available to help you make easy and efficient donations to charities. If you have questions, feel free to reach out to Donor Services at service@growyourgiving.org or 816.842.0944.

Authored by: Katie Gray, Senior Vice President of Finance