You make a donation to the kids’ day school, your alma mater, your synagogue, UJA Federation’s annual campaign, some small yeshivas, and maybe a few health care organizations. But you don’t think of yourself as a philanthropist. Think again.

More and more people who think of themselves as average donors are creating Donor Advised Funds at the Jewish Foundation of Greater Toronto. As a matter of fact, over 30% of the almost 300 Foundation funds are Donor Advised Funds.

“Many people don’t realize they can do all their charitable giving through the Foundation,” says Carol Kassel, Director of the Jewish Foundation of Greater Toronto. “They can support causes of their choice, here, in Israel or anywhere in the world where Jews are in need. And it makes giving so much easier. Donors don’t need to write separate cheques for each donation or create different charitable vehicles.”

There are many ways to put yourself in the driver’s seat when it comes to making decisions about your philanthropy.

One way is to set up your own private foundation to look after your annual grants to any charity you like. For most of us, this sounds a bit daunting.

And it is. Not only from the financial point of view, which requires that you disburse at least 3.5 percent of the invested assets each year without disturbing the initial capital, but setting up your own foundation is a cumbersome and expensive process. You need a board of directors, investment consultants, and legal and accounting experts to incorporate, register and organize your private foundation. There is a certain need and a place for these private foundations, but for most of us – it is a stretch.

Fortunately, there are other alternatives. “A Donor Advised Fund is a simple, convenient way to streamline all your charitable giving,” explains Kassel. “The whole purpose of a Donor Advised Fund is to put the donors at ease by letting the Jewish Foundation look after all the administration of the fund. The donors can then concentrate on the causes that mean the most to them.”

HOW A DONOR ADVISED FUND WORKS

•   A donor may start a fund with a minimum contribution of $10,000 of cash or other assets.

•  The donor receives an immediate tax deduction when he or she makes a contribution to the fund, but does not need to make a quick decision about which charities to support.

•   The donor may recommend distributions from the fund to registered charities whose activities fall within the broadly defined charitable mandate of the Jewish Foundation.

•   The assets in Donor Advised Funds are pooled and invested by professional money managers who are selected to manage the funds wisely and profitably. By pooling funds for investment and administrative purposes, the Jewish Foundation is able to minimize costs while engaging first rate fund managers.

•   Last fiscal year, our pooled funds earned 10.5%.

•  Donors are free from administration and record keeping. The Jewish Foundation processes distributions, mails cheques to recipients, administers and invests the assets of the fund and issues regular financial reports on the status of the fund to the donor. This frees the donor to concentrate on the rewards of charitable giving.

•   Donors enjoy ready access to the knowledge and experience of the staff of the Jewish Foundation regarding the Jewish community’s local and overseas needs and the organizations that exist to serve those needs.

“These funds provide the greatest flexibility and convenience without burdensome reporting requirements and high administrative costs. They offer terrific tax advantages as well,” says Kassel.

“Our donors are often people who don’t want to just write a cheque,” explains Kassel. “They want to be more actively involved in their philanthropy. They want to support the organizations that will directly impact the issues they care deeply about.”

reviewed by Moishe Alexander, CFC CEO