Adaptability is a great trait in people and organizations. We expect leaders to be willing to change the status quo and move forward. Sometimes, though, we hold onto our past and do things like we’ve always done them, usually because we don’t know what the future holds and the idea of failure stops us.
When we offered our first Donor Advised Funds (DAFs) in 1990, we started with one model. It took us almost 25 years to adapt to new giving trends and donor needs. It wasn’t that we didn’t listen or observe what was going on in the community foundation field—we just chose to stick to a path that was tried and true.
Here’s how DAFs work. Individuals, families or businesses that establish a DAF at Grand Rapids Community Foundation can suggest—that’s where the advised word comes in—grants to nonprofits in our area and around the country. DAF assets are invested for long-term growth, so that more and more money becomes available to support the causes that matter to each advisor. Our program and philanthropic services staff often helps donors with due diligence, discussions about impact and nonprofit capacity.
We began with a DAF model that required two things: starting with at least $50,000 and totally endowing the fund, which means that only the interest, never the capital, is used to make grants. For years our model attracted donors who wanted the security of a DAF with us. Yet some donors, prospective donors and professional advisors kept asking us to let them in under different criteria. They said our $50,000 entry level was too high and the endowment requirement hampered their ability to make very large grants. Walking away from a $25,000 gift wasn’t easy, nor was it comfortable to say no to a donor who wanted to establish a non-endowed fund north of $500,000.
Being adaptable helped us change—while remaining true to who we are as an organization. Marilyn Zack, our vice president for development, strongly challenged us to reconsider our DAF model. She reminded us that, as an organization, it was our responsibility to grow this community’s next generation of philanthropists, not construct roadblocks to keep people out. This vibrant internal discussion led to three changes. First, we reduced our DAF entry level to $25,000 and created a structure to help a donor build a fund to that level. Second, we introduced a non-endowed Donor Advised Fund option. Third, for donors with resources of $250,000 or more, we announced the Dynamic Donor Advised Fund. This unique hybrid offers the best of endowed and non-endowed funds.
Our flexibility has resulted in more people becoming engaged with our Community Foundation. We’re growing, not shrinking! Our professional advisors are having conversations about family philanthropy and the importance of working together for the good of this community. Many have grown their funds and incorporated them into their estate plans, thus extending their legacy of giving for another generation. In short, the flexibility we were afraid of is doing exactly what we wanted to do all along—encourage and engage more people to get involved in philanthropy!
I encourage you to connect with Marilyn Zack or Jonse Young, our philanthropic services director, to learn more about Donor Advised Funds and how they can help your year-end giving. You can reach them at 616.454.1751.