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Donor advised funds are key to serving communities in downturn

Donor advised funds are key to serving communities in downturn

News (International)

Over half of community foundations in the US are increasing funding for human services in 2009, according to a survey by the Council on Foundations.

Donor advised funds in the US are crucial to funding for critical needs including housing, food and emergency shelter, the report said. This is because they pay out on average 16.4% of assets, compared to 5% from other types of funds.

The majority of the community foundations surveyed said they will maintain or increase grant-making from donor advised funds in 2009.

Donor advised funds enable donors to guide the allocation of grant funds, which are invested and administered by a community foundation, focusing on a particular geographical area. In the UK there are nearly 60 community foundations which can each respond to the pressures of recession in their area.

“We are in the early days of having conversations with donors about how their giving preferences relate to front-line needs,” said Julia Upton, chief executive of the Milton Keynes Community Foundation. “It is even more important to have good information on and understanding of local needs, and community foundations can provide this.”

Upton has seen an increase in the number of individuals who are giving to the community foundation’s unrestricted fund. Although this tends to be of small amounts it can lead to a donor setting up a fund in the future, and means that the community foundation can use the money to immediately address pressing problems.

For more information on UK community foundations visit the Community Foundation Network website.

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