Now is the Time to Deploy Charitable Funds from your Foundation or DAF

I am writing to share an idea. It is an idea born out of a looming need that has sprung upon us in the past few weeks as financial markets are in turmoil. Not since 2008, or perhaps ever, have I seen such fear, verging on panic, about personal finances and an uncertain future. In addition to one of the fastest drops in the public markets since the Great Depression, we have the added challenge of very high rates of unemployment. As people are concerned, and with good reason, about their personal finances, one of the areas of expenditure that many are cutting back on is charitable giving. This comes at a time when so many charities are called upon more than ever to meet the needs of the most vulnerable in our world.

Of course, when natural disasters strike, most often it is those who are marginalized that suffer the greatest impact. This will undoubtedly become the case when the current pandemic hits the crowded slums and refugee camps in the Global South, and the streets of our cities where the homeless live, and the indigenous communities in our country: all of whom have limited access to medical support, and, in many cases, where social distancing is nearly impossible.

So, here is the idea. In Canada, there is, according the Globe & Mail about $4 billion in donor advised fund accounts (DAFs). In addition, there are just under 6,000 private foundations in Canada. In the US, there are an estimated 44,000 private foundations and about $78 billion in DAFs. Most of the monies in foundations are invested with only a small portion (in Canada, foundations are required to donate 3.5% of their capital per annum) being given to charity. What if we started to deploy the capital, even just a little more than have in the past, of these investment monies. This will have no impact on the personal finances of the donors because these monies have already been donated and receipted; there is no getting back of such funds. What if we did our “year-end giving” in April, not December. What if we came to the conclusion that the “rainy day” we were waiting for to give from our foundations and DAFs was today.

With great joy, we did just that: gave to our favorite charities what would have given at year-end. This is a time when the funds will be more powerfully used than ever. Would you consider joining us?