Council Tells Lawmakers 28% of Donor-Advised-Fund Grants Went to Social Services

More than a quarter of the grant money awarded last year by donor-advised funds held at community foundations supported basic social services, such as hunger-relief and health-care programs, according to a new survey.

And the survey, conducted by the Council on Foundations in time for its annual lobbying event this week, Foundations on the Hill, found that despite the drop in the value of assets at many community foundations, more than half the grant makers expect giving from donor-advised funds in 2009 to stay the same or grow from last year.

“Our message from this survey and to the hill is that donor-advised funds are doing their part to address critical human needs in these tough economic times, and that people count on them,” says Sigurd Nilsen, director of policy research and analysis at the Council on Foundations, in Arlington, Va.

The findings are based on responses from 264 community foundations with assets totaling $29.1-billion. Together, the foundations made more than $3-billion in grants last year, of which 56 percent, or $1.7-billion came from donor-advised funds. Twenty-eight percent of that money, the survey found, was directed to social services, such as assistance programs to help prevent home foreclosures.

Donor-advised funds allow people to donate cash, stock, and other assets to special accounts, claim a charitable deduction on their federal income taxes, and then recommend how, when, and to which charities the money in the account should be distributed.

The Council on Foundations supports legislation introduced in Congress earlier this month (H.R. 1250) that would, among other provisions, allow taxpayers to make distributions from their individual retirement accounts to donor-advised funds.

Currently, people age 70 and a half and older are allowed to donate up to $100,000 annually from their IRAs, but cannot put the money into donor-advised funds or other types of gifts, such as charitable annuities and trusts.