The low cost of using a DonorsTrust donor-advised fund has become even less expensive. At its December board meeting, DonorsTrust’s board of directors approved the most sweeping reduction in administrative fees in the organization’s 22 year history.
From our beginning, we charged a standard 1% administrative fee for all accounts, with customized rates for very sizable funds. The new fee schedule offers a more tiered and transparent system in line with many other donor-advised fund providers. Here is the new fee schedule.
First $1 million – 75 bps (0.75%)
Next $1.5m – 65 bps (0.65%)
Next $2.5m – 60 bps (0.60%)
Next $5m – 50 bps (0.50%)
Next $15m – 40 bps (0.40%)
Above $25m – Please call to discuss
What Fees Do
DonorsTrust holds a unique position in the market as a donor-intent focused DAF with a big-tent approach to supporters of limited government, personal responsibility, and free enterprise. That position has been important to our growth and success.
Still, the competitive landscape has continued to evolve since 1999, and people’s understanding of donor-advised funds has grown as well. Fees factor into the decision-making, even if it isn’t the pivotal factor.
DonorsTrust operates independently from any banking institution or private foundation, so we are not subsidized in any way. As a 501(c)3 institution, DonorsTrust relies on occasional gifs from donors who appreciate our unique purpose within the free-market community. However, our administrative fees are our primary means of sustaining our operations. Thanks to continued growth in both the number, size, and duration of our funds, we’re pleased to reduce those fees without compromising the value we create for our advisors.
For many people, fees are not a factor. More importantly, because we offer so many investment options for our DAF accounts, it’s quite common our fees are more than covered by market returns throughout the year. In addition, our donor advisors view our fee as a simple way to support the mission of DonorsTrust – to safeguard the intent of our donor-advisors and to ensure a revenue stream to organizations seeking to defend and grow a free society.
The Reduction in Practice
We will continue to offer two ways of assessing fees based on how donors use their accounts. In most cases, fees are assessed at the end of each quarter based on the average holdings for the quarter.
Accounts that generally spend out their full account balance within the year the gift is given have an “off-the-top” fee structure, where fees are assessed on a per-gift basis for initial charges. These fees may be re-evaluated at year’s end, and some fees may be reimbursed depending on the donor’s aggregate contribution level.
The new fee schedule applies to all traditional donor-advised fund accounts, including Novus Society accounts as well as legacy accounts. Strategic venture funds, a specialized donor-advised fund designed to draw broader support toward a specific social or policy goal, will continue to be charged a 1% off-the-top fee to account for the additional workload of these accounts. Giving to international groups, a growing program at DonorsTrust, likewise may have additional fees due to the more complicated liability and additional rules that are imposed on such giving.
The new fees went into effect as of January 1, 2022.