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.
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.