What Does Independence Mean?Submitted by American Endowment Foundation on March 16th, 2020
At American Endowment Foundation, we take pride in our independence. However, we realize that there are other donor advised fund (DAF) administrators who make similar claims.
What does independence mean? For those who see such claims of independence, we encourage the following items to consider regarding how independent the DAF provider is:
- Does the DAF advertise or market its service directly to donors, thereby bypassing financial advisors who otherwise could manage their clients' DAF assets?
- Does the DAF encourage the donors to manage their own investment choices (either directly or through a financial advisor?) Or do they provide minimal discretion to the donor or their advisors as to how the dollars are invested?
- Is the mission of the DAF sponsor purely to facilitate its donors’ charitable giving? Or does it have its own programmatic interests?
- Does the DAF welcome the role of the financial advisor in managing the donor’s investments at any dollar level? Or does the DAF have limits or restrictions on the account size before allowing the advisor to make financial management decisions?
- Do the Investment Guidelines of the DAF allow advisors to determine how the assets in their clients’ accounts are invested at any amount, not just above a high minimum threshold? Does the fund sponsor offer only a predetermined pool of funds?
- Is the DAF affiliated with a for-profit firm?
- Is the donor advised fund custodian-agnostic, or is it beholden to a specific financial platform? Is it portable … can you move the fund to a different administrator?
- Does the DAF have a mission to support a specific cause, geographic area, or charity?
- Does the fund force donors to grant a certain percentage to a specific cause, charity, or to the DAF sponsor itself during their lifetimes or at death?
- Does the fund provide guidance to donors to help educate the donors and advisors about better charitable giving?
- Does the DAF provide legal, financial, or tax advice that may conflict with the donor’s advisors?
- Does the donor advised fund refer donors to independent philanthropic advisory firms to help donors gain independent advice in achieving their charitable goals?
By judging claims of independence through these questions, potential donors and their trusted advisors can best guide themselves through the claims of how independent different donor advised funds are when compared to each other.
At American Endowment Foundation, we look forward to being evaluated by the 12 questions listed above. Contact us or call 1-888-660-4508 to determine if our independence can be of service to you.