Companies Turn to Community Funds for a New Way to Channel Donations

Fundraisers usually think of individuals or families when trying to tap donor-advised funds, but they should not ignore other donors. Increasingly, companies are setting up donor-advised funds to further their corporate philanthropy, and a few organizations are now making a concerted effort to get more companies to do so.

Some donor-advised funds created by companies further executives’ personal charitable interests, while others make grants much like a corporate foundation would. Still others match employees’ gifts to charities.

Among big sponsors of donor-advised funds surveyed by The Chronicle, 16 percent said companies had established funds in the past year, including J.P. Morgan, StubHub, and Toro.

Rewarding Workers

The Greater Kansas City Community Foundation, which actively started approaching area companies two years ago, now has 120 corporate donor-advised funds.

One popular offering by the foundation: pre-paid “gift cards” that corporate donor-advised funds distribute to the company’s employees and clients. Recipients use the cards to make donations to charities they select, and the money is deducted from the company’s donor-advised fund.

“We made it easy for companies to customize these gift cards with their logos,” says Laura Wells McKnight, the former executive director who led the foundation in adopting the cards. “The feedback was great for companies, and their employees and clients loved it.”

Staff Support

Another sponsor of donor-advised funds actively pursuing corporations is the Silicon Valley Community Foundation, which now has 41 “corporate-advised funds,” as they are called, and a separate department to handle them.

What companies like LinkedIn and eBay want the community foundation to do for their donor-advised fund varies widely, says Emmett Carson, president of the foundation.

To meet their needs, he says, the Silicon Valley Community Foundation provides “a la carte” services ranging from administrative support and recordkeeping to placing a full-time staff member from the foundation inside the company temporarily, which has occurred with two corporate-advised funds so far.

Working inside a corporation, the community foundation official might help a new company articulate and formalize its philanthropic goals, Mr. Carson says. Or, for a more mature company, the foundation employee might help draft a request for grant proposals and pick the top 20 potential grantees for corporate officials to consider.

The foundation’s service to corporate-advised funds in the booming technology region is, as Mr. Carson sees it, “a model for 21st-century philanthropy.”

Noelle Barton and Peter Bolton contributed to this article.