Chicago Trust’s Efforts to Bring In Donor-Advised Funds Pay Off

While many donor-advised funds saw their assets balloon last year, the Chicago Community

Trust reported one of the biggest increases, a rise of 128.8 percent to $112.8-million last year.

The trust achieved its success by hiring additional staff members to court and assist donors and by striking partnerships with financial institutions and other foundations to house their donor-advised funds at the trust, says Merri Ex, the vice president of development and communications at the trust. In 2003 the organization added 61 new gift funds.

The trust used to focus mainly on its grant-making programs, which were fueled mainly by bequests. However, a few years ago, officials decided to start working to increase the amount of money raised through donor-advised funds, which allow people to donate assets to special accounts, claim a tax deduction, and then recommend how, when, and to which charities the money in the accounts should be distributed.

The sums are still small compared with money the trust receives in traditional ways — the foundation has $1.2-billion in assets — but trust officials are confident that forging connections with living donors will eventually result in more money being distributed to Chicago charities through the trust.

Ms. Ex was hired four years ago to improve the foundation’s donor services and increase the number of donor-advised funds. She helped streamline the process of sending money to charities and developed donor-education programs. Ms. Ex also hired three people to work in the trust’s fund-raising office to help donors decide which charities to support with their gifts.

Board Gifts

To show potential contributors how much the trust was committed to donor-advised funds, 10 of the 13 members of the trust’s board of directors opened such funds in the last several years. Trust officials also started talking to families whose older generations had bequeathed money to the foundation, encouraging them to consider starting a gift fund. One family recently opened a gift fund with a $1-million contribution.

What’s more, the trust revamped its Web site to offer more information about the gift funds, and placed advertisements about the funds and other services it offers in program books for local cultural institutions and on the local National Public Radio station.

In addition to focusing more intensely on wealthy people, the trust has established partnerships with financial institutions whereby the bank offers donor-advised funds to its customers and the trust serves as the donor-advised fund provider. One such partnership, with Northern Trust Company, in Chicago, resulted in the creation of 15 new gift funds last year.

These efforts plus the emphasis on donor services helped bring in several large gifts last year, one worth nearly $35-million. “We are being more public about our donor-advised fund program,” says Ms. Ex. “Our name is out there.”

In 2002, the gift funds distributed $3-million in grants, last year it was $11.3-million, and this year the total is already at $10-million, with four months left in the fiscal year.

And three consortiums of foundations have opened donor-advised funds at the trust to tackle issues in Chicago.

Trust officials are now turning to staff members to help expand the recent success. For example, last year one donor opened a $1.6-million gift fund as a result of conversations with a program staff member.

Looking to capitalize on this experience for the future, trust fund raisers recently educated grant-program staff members about ways of giving to the trust, including donor-advised funds.

“Grant making and development are complementary, not separate,” says Ms. Ex. “All of us are developing relationships with donors, current and new, because we care about the future of our community.”