Community foundations have offered donor-advised funds for decades. But charity experts caution that the funds are not an automatic boon for philanthropy. Some say the funds sour the charitable impulse because donors may focus too heavily on tax benefits or give thoughtlessly. Though fees and gift minimums vary, most funds take similar approaches. At about seven tenths of a percent of your account's annual assets, Vanguard's fees are among the cheapest.
Most funds offer both high-risk and conservative investments, with varied returns.
The Gift Preservation Pool of the Schwab Fund for Charitable Giving returned nearly 7 percent last year, while the Growth Index Pool was off by 9 percent. Regardless of the investment strategy, donor-advised gifts often provide charities with welcome windfalls. The anonymous donor, a high-tech magnate, issued the check from a fund at the Community Foundation Silicon Valley. Donors seeking guidance for their giving may prefer community foundations to the national financial firms. Some nonprofits also offer funds of their own.