Keep Donations Flexible Now to Avoid Conflict Tomorrow

Below is an excerpt from a piece written by Paul Sullivan for the New York Times' Wealth Matters section.

..."Since it is an “advised” fund, the firm does not have to follow your wishes, but, practically speaking, that rarely happens. The two best-known donor-advised funds are operated by Fidelity and Schwab, but there are dozens of community foundations that offer them as well. The New York Community Trust is one of the largest, with 1,100 donor-advised funds (out of some 2,000 bequests it oversees) directed at interests in New York City.

“People don’t set up a donor-advised fund with a narrow interest,” said Lorie Slutsky, its president. “Someone with $5 million may care about his alma mater, his church, the ballet but he also wants to do something about hunger and homelessness.”

The New York Community Trust, founded in 1924, does its best to adhere to a donor’s wishes, but Ms. Slutsky said the agreements for the funds they managed in perpetuity explicitly granted them discretion.

A donor who wants to remove that discretion would be more apt to give his money as a restricted or endowed gift to one institution. These gifts are typically made for something specific — scholarships, art collections, fields of study — and the recipient must use the money for those purposes, even if it has more urgent needs....

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