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Monday, January 2, 2012

Rise in Donor Advised Funds: What Does it Mean?

The National Philanthropic Trust study released just before the holidays (and dovetailing with a recent report issued by the U.S. Treasury Department about donor-advised funds) points to the growth of third-party giving. This third party -- for example, a community foundation or a major investment firm, such as Vanguard (Charitable Endowment Program) -- provides donor flexibility (meaning donor choice) and donor comfort (i.e., it's easy for the donor).

Most non-profits haven't regarded organizations like Vanguard or Fidelity Investments as competitors for donor contributions. But perhaps they should be thinking more about what donor-advised funds are offering givers and looking for ways to improve their own donor relations. As competition for philanthropic support increases, so will donor dissatisfaction with organizations that don't demonstrate  commitment to building responsive, personal, communicative relationships with their supporters.