A November 2011 New York Times op-ed piece raised questions about the use of Advised Funds as ” charitable holding pens” for people who make a gift today but don’t get grants out into the community for months or years.
That’s certainly not the case at the Community Foundation of Greater Birmingham, where important partnerships with Advised Fund holders allows us to expand our impact on many important issues. We depend on the families and individuals who have established these funds to join with us through our Giving Together program, where Advised Fund donors add hundreds of thousands of dollars each year to support grants from our Community Funds.
in 2010, we ranked as the 46th most active grantmaker among more than 200 community foundations who provided information for performance measurements by Community Foundation Insights. This ranking was determined by dividing total grants by total assets to determine an overall distribution rate. Ours was 12 percent, thanks to generous Advised Funds donors as well as Community Funds and other flexible funds of the Community Foundation.
The writer also questioned the value of the legacy of family giving that is important to many Advised Fund donors. In our experience, parents and grandparents pass on important values of giving back to the community through Advised Funds that continue operating across generations. Without the administrative concerns of a private foundation, they can concentrate on learning more about community needs and know that they will always be connected through the Community Foundation.
The value of Advised Funds at a Community Foundation proves itself over and over to our whole community, as well as to the families and businesses involved. Because of these “savings accounts” for the Birmingham region, we were able to mobilize more than $250,000 immediately for first-responders in the wake of April 2011 tornadoes that killed more than 240 people across our state.
Thanks to an Advised Fund established in the wake of those same storms, the Bama Rising benefit concert organized by the band Alabama has already granted almost $1 million out of a total $2.1 million available. The rest will be granted as soon as devastated counties determine where the money can best be used.
When Community Foundations are involved, as these examples prove, Advised Funds don’t hold back dollars from the community’s needs, but provide stronger connections for their most effective use.