Family Charities Shift Assets to Donor Funds
April 22, 2009

Givers Gain Cost, Tax Benefits But Sacrifice Some Control; Leaving Paperwork to Others

by Mike Spector

Robert Morris started his own private foundation in the early 1990s to funnel money to private schools, churches and hospitals. But as the years went on, running it became a hassle.

There were annual tax forms, and Mr. Morris, now 56 years old, often had to chase down letters from charities assuring him they had received his grants. He paid at least $2,000 annually in fees to lawyers and accountants. And he found it increasingly difficult to diversify his foundation's investments with only about $100,000 in assets.

So in April, the San Francisco investment consultant closed down his foundation and transferred its assets to the Fidelity Charitable Gift Fund, a so-called donor-advised fund. It allows Mr. Morris to park his money in a variety of diversified investments, take an immediate tax deduction and recommend where grants should go later.

Frustrated by the upkeep, philanthropists are increasingly unwinding their private foundations into donor-advised funds, which invest assets and make grants to charities from individual accounts based largely on donors' recommendations. Some have been spurred by tough economic times: Donor-advised funds can cost thousands of dollars less to maintain than foundations -- a factor that has taken on increased significance as many foundations' assets have plunged...


Read this article on the Wall Street Journal web site: (full access for some articles is available only to subscribers) Family Charities Shift Assets to Donor Funds

Copyright © 2009 Dow Jones & Company, Inc. All Rights Reserved

< List of news items