Join FJC in congratulating CEO Sam Marks for his inclusion in City & State New York’s 2023 Nonprofit Power 100 list.   The list, a collaboration between City & State and NYN Media, recognizes the most notable nonprofit leaders who are strengthening the safety net and serving the most vulnerable individuals in New York.

Marks “has established himself as a leader in the world of donor-advised funds,” according to the article, which also singled out the Fortune Society fund and the Boss Up initiative as specific examples of innovative programming.

View the entire 2023 Nonprofit 100 Power List here.

For its Fourth of July broadcast, BronxNet’s OPEN program featured Fortune Society Deputy CEO Stanley Richards in dialogue with FJC CEO Sam Marks on our recently-announced revolving loan fund.

“I would encourage donors who are thinking about impacting nonprofit organizations to look at this model,” Mr. Richards said.  “It’s an innovative model that allows the recycling of an investment to bring about transformative opportunities for people.”

See the interview here.

The Fortune Society is a leading provider of services and housing for people coming out of incarceration.  FJC recently worked with Fortune to arrange a revolving fund, which will help Fortune scale its work developing supportive housing, providing a dedicated source of capital that can be used to initiate these time-intensive, critical projects.  The revolving fund was capitalized with funds from a handful of Donor Advised Fund (DAF) accounts, matched by Fortune’s own resources.

“Where FJC comes in is helping Fortune Society with a particular bottleneck they face in the housing development process,” explains Marks. “Fortune staff are experts in assembling all the complex financing to build supportive housing.  It’s in those early stages – predevelopment – where they might need a few hundred thousand dollars” to access the tens of millions of public and private financing needed to build these projects.

In the interview, Richards notes that Fortune is attempting to have a lasting, generational change.  He cited his own experience as a formerly incarcerated individual, who received the resources and support to turn his life around, start a family, and break the cycle of incarceration.  “That’s what Fortune does every single day when we serve the men and women who walk through our doors. We provide supportive housing, education, and employment.  It’s about generational change.”

Richards also noted the importance of partnership in accomplishing Fortune’s mission, and that by working together, Fortune, FJC and its donors can be more impactful than by working alone. 

“This is a model that nonprofits in the housing sector should take a look at,” Mr. Richards said.  “And it’s also a model for someone who has resources asking, How do I leverage my resources to make a difference?  This is an opportunity for people to lean in, in a way that is aligned with your values and the impact you want to have.”

Crain’s New York Business has published an op-ed by FJC CEO Sam Marks and JoAnne Page, the president and CEO of The Fortune Society.  The piece, titled “How Creative Funding Can Help Kickstart Complex Capital Projects,” describes a unique partnership between a leading nonprofit serving people coming out of incarceration and a foundation sponsor of donor advised funds (DAFs).

Through the initiative, FJC has arranged a fund that will empower The Fortune Society to scale its housing development work.  See our FAQ document for more information.

From the op-ed:

The Fortune Society, a leading supportive housing provider, and FJC – A Foundation of Philanthropic Funds, recently launched a revolving loan fund that will provide desperately needed working capital to kickstart supportive housing projects.

The fund’s low-interest loans are capitalized by contributions from FJC’s donor-advised fund holders and matched by additional resources from the Fortune Society. The loans will allow the nonprofit Fortune to significantly expand its supportive housing portfolio over the next five years.

Most donors are not thinking about using their philanthropic dollars this way. But imagine the possibilities if philanthropic leaders who think and act in business terms were to partner closely with nonprofits. They could help identify and fill common gaps that nonprofits face. Donors would see a bigger impact from their giving, and entrepreneurial nonprofits could take on more ambitious projects to solve our most challenging problems.

Read the full article here.

Reflecting on best practices by FJC and its imaginative donors, FJC Chief Executive Officer Sam Marks wrote “Donor Advised Funds and Impact Investing: A Practitioner’s View”, which was accepted for publication by The Foundation Review in their December, 2022 issue focusing on impact investing.  The journal is the first peer-reviewed journal of philanthropy, written by and for foundation staff and boards. 

The article provides a brief overview of FJC’s origin story and the establishment of its Agency Loan Fund as a bespoke impact investing vehicle, which allows participating donors to invest in a pool of loans to nonprofit borrowers that help them bridge cash flow and achieve their missions.

Marks also highlights some of the innovative transactions FJC has executed with its donors, including a 0% interest revolving line of credit for Brighter Tomorrows, the refinancing of the Tenement Museum’s mortgage, accounts that allow foundations to participate in crowd-sourced small business loans, and the recently closed revolving fund for the Fortune Society.    

“In the end,” Marks writes, “the potential for DAF sponsors to accelerate impact investments may also come from their ability to aggregate not just dollars but inspiration.”

Read the full article here.

As the end of the year approaches, FJC CEO Sam Marks interviewed FJC Board Member, Neal Myerberg, Principal at Myerberg Philanthropic Advisors, who consults with charitable organizations, foundations and philanthropists.  A transcript of the conversation, edited for length and clarity, is below.

Please note that FJC does not offer tax advice; any prospective donor should seek the advice of a qualified estate and/or tax professional to determine the consequence of his/her gift.

It’s a time of real uncertainty in the markets, with equity markets down for the year, plus rising inflation putting downward pressure on bond prices.  At a time when many donors are seeing their portfolios decline, how should donors think about year-end giving?

There’s no question that investors may not be feeling as flush as they did in prior years.  That said, long-term investors may still have capital gains from securities they bought many years ago.  It’s worth asking the question to their tax attorneys or planning professionals.

It’s also good to remember that cash and appreciated stock aren’t the only assets that can be donated.  FJC has accepted real estate, cryptocurrency, illiquid or lightly traded stock in advance of an IPO.  These items can take a bit more lead time for be approved by FJC’s board committees, so I’d definitely encourage reaching out to Sam or Regina soon if people are looking to make these donations before the end of the year.

Are there any tried-and-true rules of thumb that philanthropically minded families should keep in mind, even in a down market?

Regardless of what the market is doing, it’s always a good time to plan.  You might review your account documents and make sure that you have Successor Recommenders identified. And maybe it’s a good time to involve those successors—family members, the next generation—in your giving.  Some donors engage in a family-wide “strategic plan” for their philanthropy. FJC encourages this and can even allow some or all of the costs of strategic consultants to be paid with funds in a donor’s DAF account.

For so many donors we work with, philanthropy is part of their legacy.  Whether they are identifying beloved organizations for final distributions, or setting up a Board-designated fund to live on in perpetuity, FJC is really committed to meeting its donors where they are and creating a customized solution for them. 

Could you offer one or two planning techniques that could be highly impactful for increasing our donors’ philanthropic capacity? Any little-known tactics that you wish more DAF account holders would consider?

FJC’s donors probably know that the Treasury Department has reinstated annual required minimum distributions for people who have inherited Individual Retirement Accounts. This is basically a reinterpretation of 2019’s Secure Act, which eliminated the “ten-year stretch”.  In plain language, this means that under this change someone inheriting an IRA who does not fall into the category of exceptions has to take all Required Minimum Distributions (RMDs)–and pay taxes on them—within 10 years, instead of over their whole lifetime. 

IRA owners that want their beneficiaries to receive benefits for life are interested in considering other alternatives.  One solution may be to direct distribution of all or a portion of the IRA to a charitable remainder trust (CRT) after the lifetime of the IRA owner.  The trust would be constructed to make fixed rate payments to one or more beneficiaries for life. Thus, the beneficiaries of the IRA owner would not be limited, as direct heirs of the IRA, to a ten-year payout. At the end of the term of the CRT when all beneficiaries have passed away, the remaining assets may be distributed to a family DAF for recommendations by the next family generation; e.g. the children or heirs of the lifetime beneficiaries of the CRT.

Anything you’d like to highlight about our ever-changing tax code?

While the estate and gift tax unified credit continues to increase year-by-year, the provisions governing annual increases will sunset at the end of 2025.  Beginning in 2026, the unified credit will drop to approximately $6.2-6.5 million ($5 million base in 2010 indexed for inflation through 2025) or such amount as shall be enacted before then to govern estate and gift taxes from and after January 1, 2026.  In addition, the maximum federal gift and/or estate tax rate may increase from 40% to 45%., Taking advantage of the current unified credit amounts ought to be considered in estate planning by the end of 2022 and over the following three years. 

By Sam Marks

For some of our donors, charitable giving is motivated by more than tax benefits. For these donors, the philanthropic impulse is a calling, as critical to their sense of self and legacy as their professional lives. While donors may open a donor-advised fund (DAF) account with us as an individual, we often engage with a whole family system, or work with them to consider longer time horizons than just their own lives. 

When It’s a Family Affair

“My daughter’s sense of responsibility started with coat drives and food drives at her school,” one donor told me. “But encouraging her to support the causes she cared about with donations really focused our conversations about her values.” This donor set up a Young Philanthropist account, a specialized DAF account intended for individuals of college age or younger. These accounts lower the barriers to entry by decreasing their minimum start-up contributions (only $1,600, compared with the standard $5,000). 

Another donor told me that life events inspired their family’s philanthropic activities. “For both of my kids, we set up Collective Giving accounts when they got married,” she said, referring to a variation of a DAF account that allows multiple donors to pool their grant dollars. “We let their wedding guests build up this charitable resource as an alternative to just ordering something off the registry.” For both couples, the CGAs have evolved over time into their own family DAF accounts that have continued to be a mechanism for supporting their favorite nonprofits.

As with any DAF account, contributions to Young Philanthropist accounts and Collective Giving accounts are tax-deductible at the time of donation.

DAF accounts can be a philanthropic resource for families too. We have countless donors that engage family members as additional recommenders on their accounts, allowing, for example, their adult children access to all or a portion of their account to experiment with grantmaking. One family has set up a “master account” for the matriarch, with sub-accounts for each adult child that she funds at least once a year. For this family, dinner-table conversations veer into impromptu “foundation retreats” where topics of conversation include theories of change and grantmaking strategy. “It can get quite lively,” the donor told me. 

For some families, a professional philanthropic consultant may be called for. Families are complex systems and have dynamics that require some conversation, and at times moderation, on the road to determining a philanthropic strategy. As consultant Lauren Katzowitz Shenfield told FJC during a recent webinar, “The conversation always starts with values,” she explains, “because that underlies the entire practice of philanthropy.”

Fun fact: In many cases, FJC will allow donors to pay some or all of their philanthropic consultant fees from their DAF accounts!

Planning a Legacy 

Conversations about DAF accounts often start with questions of estate planning and tax efficiency, and evolve into questions of legacy: what our donors want to leave behind when they pass on. Our standard account-opening documents invite new donors to consider successor recommenders who can inherit their recommendation privileges, and of course donors may also list charities that can receive final distributions upon their deaths. 

Take the case of Karen Heine, who was dedicated over her lifetime to demonstrating how humans might integrate more harmoniously with nature and wildlife, even in urban settings. During her life, Ms. Heine established a conservation easement on her property: a voluntary, permanent contract whereby the landowner gives up development rights of a property in perpetuity, in return for tax benefits. Ms. Heine enjoyed a decades-long relationship with Colorado Open Lands, the nonprofit that stewarded the preserve, and the organization was one of several that received a significant grant upon her death.

In certain circumstances, FJC has also taken on the responsibility of carrying on the legacy of our donors. The Helen Rehr Fund was established as a board-advised fund in 2013, to honor the legacy of Ms. Rehr, who revolutionized and standardized the field of social work in her role as Chair of the Division of Social Work at Mt. Sinai. The organizing documents of the fund account requires the Board of FJC to “identify worthwhile projects determined by FJC to be used for social services, research, or training projects all to enhance health and mental health care for vulnerable populations within the State of Israel and the City of New York.” The most recent grant provided $100,000 to New York Lawyers for the Public Interest (NYLPI), working in coordination with program partner Community Access to advocate for New York City to establish a non-police response to mental health crises.

What are the special circumstances around your family and legacy? Contact CEO Sam Marks to start a conversation by reaching out at (212) 714-0001 or Marks@fjc.org. 

About Sam

Sam Marks is the Chief Executive Officer of FJC – A Foundation of Philanthropic Funds, a boutique foundation of donor-advised funds dedicated to helping you make your philanthropy work harder through flexible, creative, and customizable strategies. Sam works with imaginative donors and nonprofits to amplify their work and passion, providing unparalleled personal service and the expertise to execute complex transactions, all so that their clients can make the world a better place. His desire is to align his clients’ goals and needs with support for important nonprofits that are making a difference in the world so their wealth can be deployed for positive change. 

Sam has a bachelor’s degree from Brown University and a Master in Public Policy from the Harvard Kennedy School. Sam’s deep experience includes his role as executive director of the New York City office of Local Initiatives Support Corporation (LISC NYC), a community development financial institution that supports local champions to advance equitable development of historically underinvested neighborhoods. He has also acted as Vice President at the Deutsche Bank’s Community Development Finance Group, and director of housing development at WHEDCo in the South Bronx. Earlier in his career he founded Breakthrough New York, a youth development program. Sam is a third-generation New Yorker, married to a third-generation Brooklynite, with two sons. He has great affection for the culture and art forms New York is known for, from film to comic books to many genres of music. To learn more about Sam, connect with him on LinkedIn.

It’s well known that donor-advised fund (DAF) accounts allow donors to recommend grants to nonprofits of their choice. But donors can also recommend how funds are invested. FJC’s Chief Financial & Investment Officer Regina Rodriguez discusses the unparalleled customization available at FJC, and how our imaginative donors are taking advantage of it, in the following informative Q&A session. (This interview has been edited for clarity.)

Q&A With Regina Rodriguez, FJC’s Chief Financial & Investment Officer

Q: Like the assets of other nonprofit institutions like university endowments, the assets held in DAF accounts grow tax-free. What investment options are available to your account holders?

A: For most of our donors, the core menu of investments we offer provides a good range of choices. We offer a variety of low-cost mutual funds that are offered by traditional financial institutions like Vanguard, Bernstein, Janus, and others. These options include stocks (both U.S. and international), bonds, money market mutual funds. Donors have different levels of risk, different time horizons for their giving, and many of our donors can identify an investment allocation from our menu that suits their needs. We can provide donors with historic performance metrics of these core products against industry benchmarks, and the Investment Committee of our Board of Directors is constantly reviewing the menu to see if we need to make adjustments to the menu.

Q: But I gather some donors prefer to order “off the menu”? 

A: Yes, we’re able to respond to all kinds of requests. In fact, we were founded back in 1995 by donors that wanted to create a flexible, nimble sponsor of DAFs, and a big part of that meant the ability to be maximally responsive to donors that wanted to take a more customized approach to their investments.

Q: What are some of the ways donors customize their investment approaches?

A: We have donors that want to align their accounts with a particular investment approach that mirrors their or their family’s assets. In some cases, donors’ accounts are invested in alternative investments, such as hedge funds or private equity, or even illiquid assets, like shares or interests in privately held companies. For other donors, it’s less about esoteric investment products, and more that they want to maintain a relationship with a trusted advisor. They want to see their assets in their account invested in a similar way to their personal assets, and they want their advisor to have full visibility of their DAF accounts alongside their other personal brokerage accounts. 

Q: What about impact investing?

A: A lot of donors find their way to FJC because of our longstanding commitment to impact investing, in particular our Agency Loan Fund investing option. We’ve been doing that even before impact investing was “a thing”! 

The Agency Loan Fund is one of the options on our core menu, and donors can choose to invest some or all of their account holdings in it. We pool these funds together and use them to make bridge loans to nonprofits. Loans from the Fund help nonprofits of all kinds manage their cash flow, bridge public sector commitments, acquire property for affordable housing or community facilities. The donors earn a competitive risk-adjusted return, while their funds are being invested in the service of nonprofit missions. Plus, the pooled nature (and our other funding sources) means that donors invested in the Loan Fund don’t have to sacrifice liquidity, and funds are always available if they want to make a grant.

We can also respond to donors who want to customize their account investments with an eye toward impact investments. For example, we worked with a donor that wanted to invest in a career impact bond, supporting a number of training programs that are upskilling workers. We also helped a donor refinance the mortgage of the nonprofit Tenement Museum, which involved purchasing a bond issued by the City of New York and changing the terms so that the museum was obligated to pay interest-only for five years. That one was complicated to get done, but it had a great impact on the organization, which was stabilizing itself coming out of the pandemic.

The donors that work with us typically want to go beyond ESG investing (although we offer products that can do that too); they want to actually invest in nonprofits and help them achieve their missions.

Q: If a donor wants to customize their investment approach, how do they get started?

A: Reach out to speak to us about it. We love getting these calls!

Typically, it’s donors with larger accounts (usually above $1 million) that will be allowed this level of customization. Also, anytime a donor wants to do something that’s not within our standard investment menu, we have to seek approval from the Investment Committee of our Board of Directors to ensure that the investment approach is consistent with our fiduciary role. The Investment Committee is a sophisticated (and committed) group of professionals, so we can usually arrive at an answer relatively quickly.

Also, when there’s an investment advisor or manager that works with multiple donors, we can consider that $1 million threshold in the aggregate. We’ve established a number of these formal, institutional Alliance Relationships, where the firms see FJC’s boutique approach as adding value to their client relationships.

Q: What else should people know about what’s possible with DAFs?

A: DAFs have a reputation for being somewhat standard-issue mechanisms for achieving modest philanthropic goals (like annual giving or memberships at religious institutions). They don’t have to be this way! We’re amazed by the creative ideas some of our donors come up with, and we welcome these opportunities to do something for impact that’s new and different. 

We’re Here to Help

Are you ready to customize your investment approach? Or do you still have questions about how to take advantage of donor-advised funds? Our FJC team is here to help. Reach out to us today at (212) 714-0001 or Marks@fjc.org. 

About Regina 

Regina Rodriguez joined FJC in December 2019 as the Chief Financial and Investment Officer. Regina’s journey began in public accounting, performing audits for clients in an array of industries, which include financial services, manufacturing, and real estate. After joining EisnerAmper, Regina discovered her true passion for the non-profit industry by auditing many of New York’s top cultural, educational, and religious organizations. During a period of changing reporting requirements and regulations, Regina collaborated with the New York State Society of CPAs Foundation for Accounting Education and Philanthropy New York to present seminars and tailored trainings to both financial and non-financial professionals with the goal of making the technical content understandable. Since leaving public accounting, Regina has served as Controller for the Solomon R. Guggenheim Foundation and Director of Finance for the Long Island Children’s Museum. Regina graduated Magna Cum Laude with a Bachelor’s degree in Accounting from Adelphi University. She holds a CPA license in the state of New York and serves on her local school district’s Audit and Budget Committees.

By Sam Marks

The biggest names in donor-advised funds (DAFs) are the philanthropic arms of large financial institutions, and their size and scale make them an efficient solution for the retail philanthropist. But for the discerning donor who is looking to take a more personalized and customized approach to their philanthropy, a boutique approach may work better. Here are some reasons you might find a smaller, more nimble DAF sponsor appealing. 

1. You want to donate something weird. 

DAFs will typically accept donations of cash and marketable securities, but some philanthropists have complicated estates where it may be advantageous to donate other appreciated assets. We’ve seen donations of real estate, cryptocurrency, illiquid or lightly traded stock. Maybe you’ve got an idea that we haven’t even considered yet. 

2. Your dollars just can’t quit your advisor.

Oftentimes setting up a DAF account means opening an account at another financial institution, and choosing off a standard list of investment options. If you’ve got an advisor you’ve worked with who’s delivering results, why not bring them along to manage the funds in your DAF account? Our investment committee has approved many of these arrangements, and donors appreciate allowing their longtime advisors to have full visibility into their philanthropic accounts.

3. You’ve had enough of automated responses.

You’ve got questions. Or detailed instructions for grants that matter for the relationships you’re managing. Or there’s an issue you need to troubleshoot with your account. Why fill out an online form letter or put in a support ticket when you can just talk to somebody? Our staff is available during East Coast business hours, and we respond promptly to all emails and phone calls. We’re available to troubleshoot or respond to curve balls, like the occasional rush approval on a grant. 

4. Managing your private foundation has gotten too annoying.

We’ve opened accounts lately from a number of family foundations that have found the administrative burdens of operating a private foundation onerous: the tax filings, audits, compliance. For many years, they resisted closing down and converting to a DAF because they believed they would lose the flexibility and customization. But working with a boutique DAF means not having to make those trade-offs, and they’ve found they can retain many of the benefits of their private foundation (even their name!) while working through a DAF.  

5. You want your philanthropy to go beyond grantmaking.

If you’re deeply invested in the nonprofits you care about, you may learn about the particular challenges they face in operating their businesses. They face many cash-flow challenges that a standard business faces: financing contract receivables, jump-starting capital projects, investing in growth. But the credit options available to nonprofits are very limited. We’ve worked with a range of donors who have used their DAF accounts as 0% interest revolving lines of credit, bridged capital campaigns, made impact investments, even refinanced a nonprofit’s mortgage.  

6. You want to create a scholarship or award program.

In general, it’s not easy to make philanthropic grants to individuals, but we’ve got a long history of setting up scholarship and award programs that do just that. There’s a fairly involved process to get these approved by a committee of our board. (We have to make sure that the process is fair, nondiscriminatory, and aligns with philanthropic purposes, applicable regulations and whatnot). We can be pretty hands-on to co-create these types of programs.

7. You want to guide your giving with expertise. 

Our board and staff span many worlds from finance and law, to nonprofit practitioners of many types. We’re available to our donors and stakeholders that want to brainstorm, think out loud, and co-create. We have also worked with donors that want to engage philanthropic consultants, strategic advisors, or other experts that can enhance and deepen their philanthropic work. 

8. You want to rally others to your cause through a funder collaborative.

We’ve had a number of donors choose us because they have aspirations beyond just using a DAF account for their own philanthropic goals. They want to bring their community along with them, tap additional resources and expertise—or sometimes just celebrate a life event like a wedding or graduation by creating a philanthropic fund. Our Collective Giving accounts provide efficient ways to pool resources and host funder collaboratives.

9. You want to engage your family or next generation in your giving.

Family dynamics can be challenging, but the mechanics of setting up your family with DAF accounts doesn’t need to be. In addition to adding additional recommenders and successor recommenders to their accounts, donors find it easy to create multiple accounts or sub-accounts for their friends and loved ones. Some also take advantage of our Young Philanthropist accounts (with minimum balances as low as $1,800) to engage their teen or early-adult children. 

10. You view philanthropy as a relationship business. 

There are nearly one thousand foundations you can go to set up a DAF account, and though there may be slight differences among them, the technical aspects of them will be nearly identical. The intangible differences will be on the people side—the sensibilities, experiences, and skill sets that animate the organizations. We invite you to get to know us, and learn why small can be beautiful when it comes to sponsoring DAFs. We look forward to sharing our passion for this work with you. Get started by reaching out to us at (212) 714-0001 or Marks@fjc.org.

About Sam

Sam Marks is the Chief Executive Officer of FJC – A Foundation of Philanthropic Funds, a boutique foundation of donor-advised funds dedicated to helping you make your philanthropy work harder through flexible, creative, and customizable strategies. Sam works with imaginative donors and nonprofits to amplify their work and passion, providing unparalleled personal service and the expertise to execute complex transactions, all so that their clients can make the world a better place. His desire is to align his clients’ goals and needs with support for important nonprofits that are making a difference in the world so their wealth can be deployed for positive change. 

Sam has a bachelor’s degree from Brown University and a Master in Public Policy from the Harvard Kennedy School. Sam’s deep experience includes his role as executive director of the New York City office of Local Initiatives Support Corporation (LISC NYC), a community development financial institution that supports local champions to advance equitable development of historically underinvested neighborhoods. He has also acted as Vice President at the Deutsche Bank’s Community Development Finance Group, and director of housing development at WHEDCo in the South Bronx. Earlier in his career he founded Breakthrough New York, a youth development program. Sam is a third-generation New Yorker, married to a third-generation Brooklynite, with two sons. He has great affection for the culture and art forms New York is known for, from film to comic books to many genres of music. To learn more about Sam, connect with him on LinkedIn.

By Sam Marks

One sentiment I hear most often from clients and their advisors is: “I didn’t know DAFs could do that!” In fact, DAFs are incredibly flexible vehicles, and in the hands of the right client (with the support of the right DAF sponsor), the possibilities for making a positive philanthropic impact are nearly limitless. 

Benefits of Donor-Advised Funds

Most advisors consider donor-advised funds (DAFs) to be fairly standard products suitable for clients with modest philanthropic assets and goals. At its most basic application, a DAF is a simple, tax-efficient, and cost-effective investment account that provides a client with a way to support their favorite charities. Donations to DAF accounts are tax-deductible, and the proceeds can be invested to grow tax-free. Donors can recommend grants to basically any 501(c)(3) nonprofit organization at the time and cadence of their choosing.

As a boutique DAF sponsor, FJC has a 25-year track record of co-creating innovative solutions that respond to the creativity and bespoke needs of our donors. We’ve accepted illiquid assets: vacation homes, stock or limited partnership interested in privately held companies, and cryptocurrency. We’ve allowed donors of a certain size to “order off the menu” in terms of how their DAF accounts are invested, approving investments in hedge funds or alternative investments. And we’ve created opportunities for our donor accounts to “do good while doing well,” putting their investments to work as bridge loans to nonprofits, which earn a competitive risk-adjusted return while helping organizations achieve their missions.

And when clients come to us with innovative ideas about how to deploy their philanthropic dollars, that’s where we really shine.  

Philanthropic Case Studies

One donor opened up an account with us for the express purpose of creating a 0%-interest revolving line of credit for her favorite nonprofit. The donor had been a longtime supporter of Brighter Tomorrows, a domestic violence organization on Long Island. As she developed a relationship with the executive director, she saw the stress she was under managing the organization’s cash flow, in the face of oft-delayed State contracts. So we worked with the donor to create a revolving account to bridge these payments and recycle her philanthropic dollars.  

Another one of our donors refinanced the mortgage of the Tenement Museum. The donor was a longtime fan and supporter of this vital organization that has been researching and telling the stories of immigrant New Yorkers for the past 25 years. During the early days of the COVID-19 pandemic, their visitors (and attendant revenue) dried up, but the museum carried significant fixed costs due to its mortgage, which cost the museum $585,000 per year. Working with the donor and the Tenement Museum, FJC purchased the organization’s mortgage bond and changed the terms to 1% interest-only for five years. By lowering the interest rate and removing the burden of paying monthly principal payments, we provided a financial lifeline to the museum, saving the organization $2.5 million in interest costs over five years.

Our donors come up with all kinds of ideas: they make impact investments in career impact bonds; they issue Request for Proposals (RFPs) to identify best-in-class nonprofits; they tap strategy consultants to help them fine-tune their giving; they develop scholarship and award programs; they collaborate with other funders to maximize their impact; and they create their legacies. Whether it’s a complex transaction or a newfangled idea, FJC is there along the way.  That’s the reason why some family foundations are closing up shop and transferring their assets to DAFs at FJC. They can get all the flexibility and utility of a private foundation with less of the hassle and cost.

Partner With FJC to Offer More

It’s these innovative approaches that have made us the DAF of choice for advisors that want to offer up that “something extra.” Why send your clients to open accounts at a large, impersonal DAF sponsor where their questions and concerns are answered by robots or phone trees? Your clients are accustomed to best-in-class service and performance, so why not align your firm with a boutique DAF that offers them that same experience? We consider advisors like you much more than just referral sources, but true allies and partners in this work. We can provide complete visibility into their clients’ philanthropic assets, and in many cases, the ability to retain investment advisory services for assets held at FJC. (See more about our Alliance Relationships on our website.)

With all that we’ve done, we haven’t even scratched the surface of what’s possible with DAFs. Bring us your most imaginative clients, and we can discover the leading edge together.

If you’re interested in hearing more or you’re ready to partner with FJC, get started by reaching out to us at (212) 714-0001 or Marks@fjc.org. 

About Sam

Sam Marks is the Chief Executive Officer of FJC – A Foundation of Philanthropic Funds, a boutique foundation of donor-advised funds dedicated to helping you make your philanthropy work harder through flexible, creative, and customizable strategies. Sam works with imaginative donors and nonprofits to amplify their work and passion, providing unparalleled personal service and the expertise to execute complex transactions, all so that their clients can make the world a better place. His desire is to align his clients’ goals and needs with support for important nonprofits that are making a difference in the world so their wealth can be deployed for positive change. 

Sam has a bachelor’s degree from Brown University and a Master in Public Policy from the Harvard Kennedy School. Sam’s deep experience includes his role as executive director of the New York City office of Local Initiatives Support Corporation (LISC NYC), a community development financial institution that supports local champions to advance equitable development of historically underinvested neighborhoods. He has also acted as Vice President at the Deutsche Bank’s Community Development Finance Group, and director of housing development at WHEDCo in the South Bronx. Earlier in his career he founded Breakthrough New York, a youth development program. Sam is a third-generation New Yorker, married to a third-generation Brooklynite, with two sons. He has great affection for the culture and art forms New York is known for, from film to comic books to many genres of music. To learn more about Sam, connect with him on LinkedIn.

The Power of the Personal Series: Ideas and Inspiration from a Boutique DAF Sponsor

By Sam Marks

As tidying guru Marie Kondo is fond of saying, “Letting go is even more important than adding.”  While Ms. Kondo generally refers to purging overfilled closets of possessions that no longer “spark joy,” the same principle may apply to those looking to simplify estates or assets through philanthropy.  

As a boutique sponsor of donor-advised funds (DAFs), FJC has worked with a number of donors that have sought not just to simplify, but also transform their non-cash assets into a philanthropic resource for good in the world.  

How We’ve Made a Difference

Most people think of DAFs as simple, efficient, and cost-effective investment accounts that provide savvy philanthropists — of all sizes — with a way to support their favorite charities. Donations to DAF accounts are tax-deductible, and the proceeds can be invested to grow tax-free to maximize a donor’s giving capacity. But when donors and DAF sponsors bring all their creativity to the table, the benefits of a DAF can go beyond simple and efficient.

One of our favorite examples of creative giving comes from Georgette Bennett and Leonard Polonsky, who worked with FJC to transform a vacation home in Aspen, Colorado, into a portion of their $12 million grant to the New York Public Library. The family donated the Aspen property to FJC, which then sold the real estate, generating the proceeds that covered a portion of the grant. The grant to the library supported the creation of Polonsky Treasures Exhibition, a permanent display of rotating items from its extensive research collections, including an original copy of the Declaration of Independence, Christopher Columbus’s letter to King Ferdinand II advising him of his discovery in the New World, the Gutenberg Bible, and original sheet music from Beethoven and Mozart. The opening of the exhibition, “A Cabinet of Wonders,” was covered last year in The New York Times.

At FJC, our imaginative donors have contributed all kinds of assets: limited partnership interests in private companies and even illiquid or lightly traded stocks in advance of a liquidity event like an initial public offering. We have also received cryptocurrency. In these cases, donors eliminated the capital gains taxes they would have paid on these assets (increasing their charitable giving) and received a tax deduction for the fair market value of the assets.  

Important Considerations When Contributing Illiquid Assets to a DAF

Since FJC does not give tax advice, we encourage you to work with your estate planner, tax attorney, or someone with expertise related to your particular situation. Second homes or investment properties that have appreciated in value may be great candidates for gifting to a DAF, particularly if the owner has benefitted from depreciation deductions. Other assets aren’t so simple. For example, gifts of art or other types of tangible personal property are governed by IRS rules regarding the amount of the deduction. Gifts of closely held stock need documented valuation, particularly if the corporation intends to repurchase the shares from FJC as part of the family’s estate and succession planning.

Keep in mind that when providing a tax receipt for an illiquid asset, FJC will simply describe the asset; it will be up to you as the donor to provide a Form 8283 to the IRS for tax deductibility purposes. Also, don’t wait until New Year’s Eve to reach out to us—these donations may be a bit complex and require some lead time (the donations mentioned above required the approval of certain committees of our Board of Directors, whose role is to ensure that we are in compliance with all IRS and regulatory statutes).  

Discover the Potential of a DAF for Your Philanthropic Endeavors

Neal Myerberg, a philanthropic advisor and longtime Board Member of FJC, put it best when he said, “We get excited when a donor brings us an idea for a different kind of asset to contribute to their account…. These are some of the more challenging and inspiring transactions we handle on behalf of our donors.”

With the right imagination and expertise, your DAF sponsor can act as a kind of Philosopher’s Stone, transforming lead into philanthropic gold. If you’re ready to see how FJC can make a difference in your giving, reach out to us at (212) 714-0001 or Marks@fjc.org.

About Sam

Sam Marks is the Chief Executive Officer of FJC – A Foundation of Philanthropic Funds, a boutique foundation of donor-advised funds dedicated to helping you make your philanthropy work harder through flexible, creative, and customizable strategies. Sam works with imaginative donors and nonprofits to amplify their work and passion, providing unparalleled personal service and the expertise to execute complex transactions, all so that their clients can make the world a better place. His desire is to align his clients’ goals and needs with support for important nonprofits that are making a difference in the world so their wealth can be deployed for positive change. 

Sam has a bachelor’s degree from Brown University and a Master in Public Policy from the Harvard Kennedy School. Sam’s deep experience includes his role as executive director of the New York City office of Local Initiatives Support Corporation (LISC NYC), a community development financial institution that supports local champions to advance equitable development of historically underinvested neighborhoods. He has also acted as Vice President at the Deutsche Bank’s Community Development Finance Group, and director of housing development at WHEDCo in the South Bronx. Earlier in his career he founded Breakthrough New York, a youth development program. Sam is a third-generation New Yorker, married to a third-generation Brooklynite, with two sons. He has great affection for the culture and art forms New York is known for, from film to comic books to many genres of music. To learn more about Sam, connect with him on LinkedIn.

Special thanks to FJC Board Member Neal Myerberg for ideas and feedback during the writing of this post.