Donor-Advised Funds (DAFs) have become a cornerstone of modern philanthropy, offering individuals and families a streamlined approach to charitable giving with significant tax advantages. Among the prominent DAF providers are University Impact, Fidelity Charitable, and DAFGiving360 (Schwab Charitable). Each offers unique features tailored to diverse donor needs.
University Impact
University Impact (UI) is a nonprofit organization that sponsors a Donor-Advised Fund known to be the most flexible in the industry. It has no minimum contribution amount and no grant requirements. The UI Donor-Advised Fund accepts a wide variety of assets including cash and marketable securities, real estate, private business interests, alternative assets, and cryptocurrency, facilitating a seamless donation process. It allows advisors to continue to manage the assets in the DAF. In addition, it empowers donors to make direct grants, recoverable grants, credit guarantees, loans, or equity investments both domestically and internationally. This flexibility allows donors to amplify their philanthropic reach. DAF administration fees begin at 0.6% and are tiered in line with fees charged by Fidelity Charitable and Schwab Charitable.
Fidelity Charitable
Fidelity Charitable is one of the largest DAF sponsors in the United States. Notably, Fidelity recently eliminated minimum initial contribution requirements, enabling donors to establish a DAF with any amount. The administrative fees are structured at 0.6% for accounts up to $500,000, with tiered reductions for larger balances. Donors can select from a variety of investment options to grow their contributions tax-free and have the flexibility to recommend grants to qualified charitable organizations at their discretion.
DAFGiving 360 (Schwab Charitable)
Schwab Charitable is another leading DAF provider, offering services comparable to Fidelity Charitable. It also allows donors to open a DAF with no minimum initial contribution, making it accessible to a broad donor base. The fee structure mirrors that of Fidelity, with a 0.6% administrative fee for accounts up to $500,000 and decreasing rates for higher account balances. Schwab provides a range of investment pools and the option for accounts over $100,000 to recommend an investment advisor for personalized investment management. Donors can recommend grants to IRS-qualified public charities, with a minimum grant amount of $50.
Comparative Overview
Minimum Initial Contribution: Both Fidelity Charitable and Schwab Charitable have removed minimum initial contribution requirements, enhancing accessibility for donors. University Impact does not have a minimum contribution requirement either, suggesting a tailored approach based on individual donor circumstances.
Administrative Fees: University Impact, Fidelity, and Schwab all charge a 0.6% administrative fee for accounts up to $500,000, with tiered reductions for larger accounts.
Investment Options: Fidelity and Schwab offer a variety of investment pools, with Schwab providing the option for larger accounts to recommend an investment advisor. University Impact permits an investment advisor to continue to manage the account, aligning a client’s investments with philanthropic goals.
Grant Flexibility: University Impact distinguishes itself by enabling grants to a diverse range of organizations, including international and for-profit entities, and offering various funding mechanisms beyond traditional grants. Fidelity and Schwab primarily facilitate grants to IRS-qualified public charities, adhering to standard philanthropic practices.
Conclusion
Selecting the appropriate Donor-Advised Fund provider hinges on individual philanthropic objectives, desired flexibility, and investment preferences. University Impact is ideal for donors seeking to engage in impact investing and support a broad spectrum of social initiatives. Fidelity Charitable and Schwab Charitable are well-suited for donors prioritizing defined administrative frameworks. Prospective donors should assess their charitable goals and consult with financial advisors to choose the DAF provider that best aligns with their philanthropic vision.
