Starting An Advised Fund
|The Bill Lunney and Judie Pfeifer Family Fund for Parks, Trails and Natural Resources supports environmental projects in Dane County and Wisconsin.
Advised funds (commonly known as “donor advised funds,” or DAFs) are a popular option for charitable giving.
You can to set aside charitable dollars as you wish, then over the years make grant recommendations to charities, causes and issues of your choice. Advised funds may be created by an individual, family, group, business or charitable organization and can be endowed, quasi-endowed (Maximum Giving Fund) or non-endowed (Passthrough Fund) to allow flexibility in your giving. You can make contributions to your fund at any time and take a tax deduction for the year in which the gift is made.
Endowed Advised Funds
These funds are pooled and invested with all of MCF's assets for long-term growth. Annual spending is calculated using a total return spending policy (4-5% of the fund value) determined each year by the Board of Governors to help preserve intergenerational equity. Endowed Advised Funds can be started with a minimum gift of $15,000.
Maximum Giving Funds
These funds are pooled and invested for a shorter timeline, allowing distributions of the fund's principal as well as its income. Annual spending is calculated at 20% of the fund value. Designed to offer the spending flexibility of a private foundation but with significant savings in administrative and investment management costs, Maximum Giving Funds can be started with a minimum gift of $100,000.
These funds offer a short-term vehicle for charitable giving, allowing you to make a lump sum contribution to Madison Community Foundation, receive the tax benefit today and recommend distributions to charities when you're ready. Local charities may also create passthrough funds to broaden the types of gifts they can receive during capital fundraising campaigns. Passthrough Funds can be started with $1,000 and require no minimum balance.
Key Benefits of Starting an Advised Fund:
- Advised funds are a cost-effective and efficient alternative to a private or family foundation. Review a comparison of Donor Advised Funds and a Private Foundation.
- Advised funds can be named to recognize the donor(s), a family member, friend or organization. Or, you can select a name for the fund that ensures your anonymity.
- MCF can accept contributions of many types of assets, including stock and real estate.
- You can recommend distributions online through MCF's secure website.
- MCF’s donor engagement team can help you learn more about the nonprofits working in the areas you wish to support.
- You can name a second-generation advisor to make recommendations from the fund into the future.