As a marketing guy, I love a good tri-fold brochure.
The DonorsTrust version of that, our Donor Prospectus, covers a lot of ground in a short amount of space. Yet the best brochure, website, or one-pager will still leave a person with question.
If you’ve looked over DonorsTrust materials, you’ve likely been left with a few questions or concerns you haven’t seen fully addressed.
A chat with my trusty AI bot recently helped me formulate a few of those unanswered questions. Based on hundreds of conversations with prospective clients over the years, I can attest that these both are frequently asked and are worthwhile topics to address.
Here are a few of the most common questions that might be rattling around in your own head as you consider working with DonorsTrust.
How do I know DonorsTrust won’t drift away from its principles?
Writer and commentator John O’Sullivan had a maxim that has come to be known as O’Sullivan’s Law: Any organization not explicitly established as right-wing will drift leftward over time.
DonorsTrust was explicitly set up to serve liberty-minded donors and protect and advance the ideals of limited government, personal responsibility, and free enterprise. We center our mission on preserving donor intent aimed at those ideals.
The chief bulwark against our eroding our own principled beach comes from our board. Each year at the annual board meeting, board members sign a commitment to uphold those liberty-minded values. If a member feels they no longer can sign that—or if the rest of the board believes that the member cannot in good faith sign it—then we’ll thank the board member for his or her service and find someone who is fully prepared to defend those principles.
We are likewise thoughtful with hiring, aiming for people aligned with DonorsTrust mission while still seeking a diversity within the broader tent of “the Right.”
No system is perfect, but many organizations don’t have such principles so baked in.
How flexible is the grantmaking really? Don’t you actually just want all the giving to go to policy shops?
On average, 60–65% of the dollars granted out go to what can broadly be defined as “policy.” In terms of individual grants, that percentage is smaller, as so many (often smaller) grants go out monthly to churches, civic groups, schools, arts programs, dog shelters, and human service organizations.
Our vision is that grants coming from DonorsTrust support a robust civil society built on freedom for individuals, families, and communities to prosper with as little government interference as possible. We want to ensure government isn’t growing as a result of these grants. We are wary of organizations taking significant amount of money from government because those dollars come with strings attached—sometimes you might like the strings and sometimes you won’t, but either instance limits the capacity of the organization to operate as it sees fit.
Our team certainly knows the policy world the best, just as a local community foundation will know the human service and civic organizations in its municipality well. We believe the best way to solve societal problems is attacking them at every level, from policy to point-of-service, or as I often say, we believe you can give a man a fish and teach him to fish, but you also need to make sure he is free to fish in the first place.
What do we mean by an “irrevocable gift?” How much control am I really giving up?
Legally, all of it. Be wary of any donor-advised fund provider that says otherwise. This is why it is so important to work with a DAF provider that aligns with your values, because the provider truly is a partner in your giving.
It is relatively rare for our grants committee to decline giving to an organization. If we do, it is because the charity runs against our clearly stated guidelines, available to see here (and you definitely should review them as you consider opening an account).
When you give to, say, your local cat shelter, you’re giving to advance the programmatic work the shelter does. For DonorsTrust, our largest program is the donor-advised fund. Put another way, our programmatic goal centers on helping donors give in alignment with their vision and values. Declining a gift is us preserving our program, for us and for you.
Notably, giving up that control is what gives you as the donor the maximum tax benefit, the same level of benefit you’d receive when giving directly to a public charity (where you also give up control). A private foundation, where you give up a lot of control but not all of it, has a reduced tax benefit.
If the “control” piece is of concern to you, my recommendation is to test a fund and see how it work for your situation. Open with a smaller amount, as little as $10,000, and feel out the mechanics and the working relationship. Take a test drive before you maximize your usage of the fund.
Do I have a dedicated advisor that works with me?
Sometimes, depending on the needs for your account. We internally assign someone to work with you, but since we’re a small shop, you’re likely to encounter various folks at different times. There is, however, a limited universe of people you will hear from because we have fewer than 20 on staff.
Here’s what you won’t get when you call during the workday: a phone tree. A real person will answer the phone and either answer your question or get you to the right person.
For those looking for a higher level of personalized, concierge service, we are happy to have a conversation about a custom tier of service to help you maximize your impact and simplify your giving. More information on that here.
What are the investment options and how can I invest other things?
One value to donor-advised funds is the ability to have charitable dollars grow over time. I did this myself. When we sold our former home, we squirreled away a portion of the proceeds in our DonorsTrust account. I split the money between a couple of index funds, which appreciated nicely over a few years, allowing my wife and me to make a larger gift to our church’s capital campaign than we otherwise might have.
You can see the investment options we have here. Its an assortment of ETF funds. Three are managed funds assembled by our trusted (and ideologically aligned) investment managers at Merrill Lynch. Accounts larger than $1 million may request we work with an outside investment advisor.
Occasionally, we do add new funds at the request of our clients, and while we are slow to add new funds, we do continually scan the landscape for offerings that our clients might find valuable. We are also happy to discuss custom arrangements and see how and if we can accommodate.
Again, per the question above, the control aspect extends to the fund management as well. DonorsTrust is and always will be a philanthropy-first organization. The investment piece is neither our focus nor strength, so we do not act instantaneously to requests for rebalancing. When donors contribute appreciated stock, our policy is to liquidate as soon as possible; we are not in the business of timing the market.
Am I just paying more for the same service I would get at Fidelity?
A question I often hear is, “How do you make your money?” DonorsTrust supports itself almost entirely on fee revenue (occasionally we also receive foundation grants or other general gifts). Our administrative fee schedule, fully outlined here, starts at 75 basis points (0.75%) annually and declines as accounts grow larger. The investment funds have small management fees, varying by account, but those go entirely to the investment institution; we do not derive any income from the DAF fund investments.
How does that compare? The DAFs affiliated with large banks generally start at 0.60%, slightly below us. Many community foundations are at 1% or higher.
What do you get for those additional 15 basis points? Frankly, you get everything we’ve talked about above. Fees with any DAF provider will cover the basics: reviewing and processing grant recommendations, regular reporting, and investment options for further growth. With DonorsTrust as your charitable team, you also receive donor intent protection, regular communications aligned with your values topics, and a readily-available, philosophically aligned team ready to discuss your philanthropy.
Some people think of the administrative fee as essentially part of their giving strategy. Per what we discussed above about the DAF being the main program of DonorsTrust, that is a good way to think about it. We are regularly engaged in and helping the community of nonprofits focused on advancing conservative and libertarian values. That is a piece of our mission, and one you support simply by being a giver through DonorsTrust.
Do you still have other questions we can answer? Contact us here and we will be delighted to talk one-on-one to answer every last question you have in your journey to simplify and protect your charitable giving.
At DonorsTrust, we share your values and want to help you execute your charitable vision to maximize your impact. We’d be honored to be a partner in your philanthropic journey.