Is Converting Your Foundation to a Donor-Advised Fund Right For You?
This survey can help you determine if a donor-advised fund account makes sense for you. Whether you want to convert your private foundation to a donor-advised fund account or are considering one as a complement to your foundation, Schwab Charitable can help.
For most donors, the ability to select grant recipients is a critical part of their motivation to give. There are key differences in how grantmaking works for private foundations versus donor-advised fund accounts.
Private foundations offer the ability to make grants directly to U.S.-based public charities and other organizations. In addition, they may make grants directly to specific individuals for scholarships, research, missionary work and other charitable purposes. They may also make grants directly to support international organizations that do not have U.S. affiliates, as long as they take on the responsibility of expenditure oversight reporting.
Donors can generally recommend grants to U.S.-based public charities, to international organizations that have U.S. affiliates, or to a domestic charity which will take on the responsibility of following the regulations regarding expenditure oversight reporting for the international charitable activity (generally for a fee). In some rare circumstances, the donor-advised fund sponsor may take on that responsibility. Grants from donor-advised fund accounts may not be made to individuals, but can be given to scholarship funds at schools, who can then name individual recipients.
1. A private foundation is likely the more appropriate charitable vehicle for you because it can make grants directly to individuals (under IRS-approved procedures) and international charitable activities (with appropriate expenditure oversight reporting).