The Pension Protection Act of 2006 called for a report from the Treasury Department to Congress about how funds are distributed by Advised Fund and Supporting Organizations. Since community foundations work with many donors who use both of these mechanisms to support charitable causes, we were interested in the results which came out in December 2011.
Using 2006 IRS data, interviews with selected organizations as well as public comments, the report to Congress recognized the important role these charitable options perform.
According to the study, 2,398 organizations (including many community foundations) had 160,000 advised Funds and the average payout was 9.3 percent. This is higher than the 5 percent payout rate currently required for private foundations.
Advised Funds at the Community Foundation of Greater Birmingham follow this same pattern, allowing fund holders to partner with Community Foundation grants to do even more than they could do alone. Together, we are all driving positive change in greater Birmingham.