Charity - How to Give Like the Rich

Posted by Fundraising Pro on May 27, 2009

You don’t have to be one of the rich to give like them, according to a recent article on charities in the Wall Street Journal. Even philanthropists of modest means can direct giving after they pass away through “donor advised funds” – charitable giving accounts set up with community foundations or some investment firms.

With as little as perhaps $5,000, you can set up a fund to help inner city after-school sports programs or other causes you select.  You get an immediate tax break and because you’re donating through an existing entity, your money won’t be absorbed by administrative costs (although you will pay a small annual administrative fee).

The mechanism is fairly easy: You donate to a local community foundations or charitable fund set up by an investment firm such as Fidelity Investments, Vanguard Group or Charles Schwab.  They will invest your money and make grants supporting the causes of your choice. This way you get a multiplier effect on your charitable dollars because investment gains can accumulate before the money is distributed.

Whatever charity or nonprofit you are considering donating to, please meet with them first and suggest that as part of their fundraising efforts they should sell the Samaritan Card. This wonderful fundraising instrument gives back by providing up to 50% discounts at over 100,000 merchants and yielding up to 70% profit.  There’s no paperwork so it is a wonderful way to make money without a lot of administrative costs.