If the turkeys aren’t nervous yet, they should be. Stove Top Stuffing and jellied cranberries are flying off the store shelves. In a couple days, most of us will get together with family for a full day of feasting, football, and the inevitable tryptophan-induced slumber.
I’ll also take a moment to count my blessings. I am fortunate to be in a position to make this the last holiday season I’ll ever spend carrying a pager. We’ve saved enough to support our retirement and then some, and we can afford to help others who are less fortunate.
I frequently write about charitable giving in spite of the fact that my readers don’t seem particularly interested in the topic. It may be that you’ve already got your giving plans down or that you are still in debt yourself and not ready to share a wealth you don’t yet have. Either way, it’s a topic that’s important to me and I plan to continue writing about giving.
Help Me Give Away $10,000
Maybe it’s my fault you haven’t been reading my charitable giving posts. I haven’t properly incentivized you to do so. That changes today.
Stick around and I’ll tell you how to get $100 to a charity of your choosing and it won’t cost you a penny.
Many of my giving posts revolve around the use of donor advised funds (DAFs). I’ve had them with T. Rowe Price, Vanguard, and Fidelity. I currently have holdings with both Vanguard Charitable and Fidelity Charitable and will most likely use only Fidelity in the future.
Fidelity Charitable and Schwab Charitable allow you to easily donate as little as $50 at a time to any IRS-registered charity, and you can do so anonymously without having to track any receipts. Other DAFS work similarly, but some have much higher minimum grants. For Vanguard, it’s $500 per grant.
So, for example, if you wanted to give $100 each to 100 different charities without ending up on their mailing lists, it’s quite simple to do with Fidelity Charitable. I’m guessing it can be done in one evening, and if we’re not in the operating room all day, that’s exactly how I plan to spend a couple hours on Thanksgiving this week.
What is a Donor Advised Fund?
While I encourage you to stick around and read additional posts on the topic if you are not familiar with the DAF, I’d like to give a brief overview.
A donor advised fund is an account that you open with donated dollars. Once your money is in the DAF, it’s no longer yours. It belongs to the DAF, which is a charitable organization in its own right.
The money can then be distributed to any 501(c)(3) public charity or foreign equivalent. There are over 1.7 Million of these in the United States alone. You can find them on Guidestar’s Search page.
According to the National Philanthropic Trust, there are 464,000 DAFs in the U.S. with assets of $110 Billion. Last year, $29 Billion in funds were contributed to DAFs and $19 Billion was granted from them. I’ll take credit for inspiring at least a million dollars donated to them last year based on the feedback from a number of people who started six-figure DAFs of their own after reading about mine. DAFs are growing in both popularity and effectiveness as more money is granted from them each year.
When contributing to a DAF, you can donate appreciated shares of stocks, ETFs, and mutual funds, eliminating the capital gains, effectively reducing your potential capital gains tax exposure. You can also give real property and other assets.
There are fees to keep your money in a DAF. Vanguard, Schwab, and Fidelity each charge 0.6% plus very low expense ratios in the funds. That fee is nearly identical to the tax drag my dollars are subject to while invested in a tax-efficient manner in our taxable account, which is where this money would be if I hadn’t donated it. Those who cite fees as a big drawback are either in a very low-tax situation (early retirement perhaps) or haven’t thought through the alternative.
The other main argument against them is the fact that you can leave money in a DAF more or less indefinitely, even passing it on for your heirs to donate some day. Charitable foundations donate, on average, about 5% of their assets annually, whereas the DAF donation percentage is closer to 20%.
The White Coat Investor went so far as to call “giving” to a DAF account a “jerk move,” but he has since conceded and admitted plans to open a DAF of his own in a couple months.
I like to think of a DAF as a low-cost foundation that someone else administers for you. All you have to do is put money in and tell the administrator where you want your already-donated dollars to go and when. I’ve outlined exactly how to do so with Vanguard Charitable and Fidelity Charitable here. It’s remarkably easy.
For further reading, please see my other posts on the topic of DAFs:
Giving Away $10,000
A week ahead of Giving Tuesday, I’m setting the mood by making one hundred grants of $100 each from our Fidelity Charitable Account. This will be in addition to the giving that we normally do as a family throughout the year and at year’s end.
As you may know, I have donated half of my profits from this website. Most of the donations are made to the donor advised fund, but I decided it would be fun to crowdsource the recipients in today’s round of generosity.
I started with the advertisers that have supported the site in 2018, asking them to choose a charity for me to support in return. Without them, this site wouldn’t be much of a charitable mission. The following is a list of the advertisers who responded and the recipients of $100 grant from us. Many of them support these same organizations with substantially larger sums.
Note that in the case of the larger businesses, the charity was chosen by our primary contact at the company. The individual’s choice should not be assumed to reflect the company’s primary choice as a recipient of their charitable giving.
Laurel Road: $100 to Scholarship America
Fulton Mortgage Company: $100 to Central Virginia Alzheimer’s Association
I’ll be donating a total of $2,800 based on my advertiser’s recommendations. That leaves $7,200 to donate, and that’s where you come in.
Granting $100 on Your Behalf
I’ll ask you to recommend grants, but please do so with the same stipulations that I asked of my advertisers.
The recipient must be a 501(c)(3) charitable organization. No Gofundme campaigns. No giving to individuals. These are the rules laid down by the IRS, not me.
Also, I want to give to organizations whose missions pretty much anyone, regardless of religious or political affiliation, could not argue with supporting. You are welcome to give to your church and politically active charities on your own, but for this experiment, choose a non-partisan organization. If you’re not sure about what could be considered a gray area, please identify a safer bet.Guidestar’s search engine. Ideally, a link in the comments to the Guidestar profile will give me all the information I need to instruct Fidelity Charitable (the DAF I will be using) to make the anonymous donation.
If you are unable to find the charity there, please share the following information with me (this form comes from Fidelity).
In the comments section, please enter as much information as possible to allow me to easily support the charity of your choice. The first 72 recommendations that fit the criteria above will receive $100 in the form of an anonymous grant from our donor advised fund.
If you don’t have all the information right now, please enter the name of the charity now to reserve a spot and come back before midnight CST Wednesday night and reply to your comment with the remaining details and preferably a Guidestar link if available.
If you would like the grant to be made “in honor of” or “in memory of” an individual, including yourself, please also mention that in the comments.
If you’re recommending a charity that you are not already supporting with your own funds, please consider making a matching or larger grant, now or in the future.
If you’d also like to support Scholarship America, Laurel Road is donating $100 for every written story (of 200 to 400 words) and $200 for every 30 to 90 second video about how someone helped you pay for college. Submit your stories here.
Supporting Our Charitable Mission
How can you support the site’s charitable mission? I like to refer to it as our charitable mission because without readers, there’s no profit and no mission.
I’ve been very transparent in how this site makes money. Since I’ve donated half of my profits, the best thing you can do is to help grow the site’s profit.
I’ve got ads in the header, right sidebar, and a couple in each post. There are also ads at the bottom of my e-mails and on some of the other pages on this site. Those are sold directly, mostly to small businesses, by Cindy, my ad manager.
If you have an interest in advertising, you can find more information here. Please support the site’s advertisers and let them know I sent you.
I also have affiliate relationships with student loan refinancers, crowdfunded real estate platforms, Personal Capital (which I’ve been using since late 2014, long before I had a website), and a few others. If you use one of their services after reaching them via a link here, this site may get a commission for the referral.
One of my best performing affiliate relationship has been with Personal Capital. If you are a blogger interested in an affiliate relationship with them, please accept my invitation to work with FlexOffers to create your own affiliate links. Doing so could result in some small commissions for me.
WCI is having a sale on all courses with a free bonus course included with your paid tuition this week!
In honor of Financial Literacy Week, if you buy either the Fire Your Financial Advisor or the 2020 Continuing Financial Education course, you will not only receive 10% off, but also receive the Physician Wellness and Financial Literacy Conference - Park City course for free.
Which charity would you like me to support with a $100 donation? If there are fewer than 72 comments recommending charities, please enter the required info for your chosen charity. There are so many great causes that could use our help.
Again, a link to the search results in Guidestar would be helpful. If you cannot find your top choice that way and you’re certain it’s a bona fide public charity in the eyes of the IRS, enter as much as you can based on the image from Fidelity above. One recommendation per person, please.
If you only have time to name the charity now, please return by the stroke of midnight Wednesday, 11/21 to fill in all remaining details in a reply to your initial comment. No e-mail, Twitter, or Facebook requests will be honored. I’ll only be looking in the comments section here on this article.
Thank you for your furthering our charitable mission!
[Update 11/21/2018: Our giving quota has been met. Thank you all for your requests!]