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What are Donor Advised Mutual Funds?

Fidelity Investments Charitable Gift Fund is the leading star of donor advised best mutual funds with booty of $4.5 billion and having distributed $457 million in 1999 alone. Other players of note in the cause are The National Philanthropic Trust, the Eaton Vance U.S. Charitable Gift Trust, Schwab Fund for Charitable Giving, Vanguard Charitable Endowment Program.
Are There Risks With The Best Mutual Funds Like These?
The investments in donor advised mutual funds are by and large safe but for a few voices. But there were complaints made to Internal Revenue Service (IRS), the bureau of the Treasury Department responsible for tax collections about scandalous usage is looking into the use of funds as a charitable and philanthropic vehicle of contribution. It is reportedly in the middle of framing new regulations regarding the operations of charitable mutual funds to reduce apprehensions in the minds of people.
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Looking At Donor Advised Mutual Funds From Investment Angle
Altruistic reasons apart you can look towards these funds to provide Investment Avenue for you. However, it takes a little bit of homework on your part. The following check list helps you in this direction.
  • Minimum initial contributions vary hugely from one fund to another. They range between $10,000 and $50,000. This is important to check the funds credentials before pooling big sums of money.
  • Have you checked the charges you need to pay? Schwab and Fidelity charge you from 0.57% to 0.7% and 2% and above by Eaton Vance and others.
  • Have you chosen a portfolio for your investment? Some of them allow you to choose a combination of investments and let you switch it when you want. Switching portfolio may incur charges for you.
  • Since not all the donor advised funds have a minimum requirement on donations, your tax planning becomes unpredictable. It helps to confirm before you sign up with them.
There is one intangible benefit of investing in donor advised mutual funds. When you open an account with funds, you will allow them to use your name on the donations to charities of your choice unless you specified otherwise. This is more of an ego advantage for you. Otherwise why would you think of investing in charities?

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