If you think the role of ‘philanthropist’ is reserved for people with family names like Knight or Firestone, think again. You don’t have to be among the wealthiest men or women in town to make a financial gift with a lasting impact.
With as little as $5,000, you can create what’s called a ‘donor-advised fund’ through groups like the Akron Community Foundation. Assets from donor-advised funds are pooled with other holdings of community foundations, other nonprofits or even commercial sponsors for the purpose of creating lasting endowments. Each group structures them a little differently and sets different minimums for ‘named’ funds.
The Akron Community Foundation has “over 300 funds that we manage for individuals and families,” Suzanne Allen, vice president of development, says.
Each year, up to 5 percent of the fund’s total value can be donated to charity. Interest earned, typically 8-10 percent based on Akron Community Foundation’s track record, increases their value over time. Donors can add to their funds and their friends can make gifts to help the funds grow. While the foundation handles all the legal and administrative details, donors can recommend which nonprofits will benefit.
The Auburns take the long view
Sandy Auburn established the Sandy K. and Mark S. Auburn Fund with her husband about five years ago. The couple created their fund by having automatic withdrawals taken from Sandy’s paycheck over a two- to three-year period.
As Auburn points out, for most people “the first part of life is oriented toward success and the second part toward significance.” Knowing that their fund will help the local community “not just today, not just tomorrow, but forever” is especially meaningful to the Auburns. “What could be better than that?” she asks.
Eventually, they and their son David will decide together what the focus of their family’s giving will be. For now, they have chosen to grow their fund a little more before pulling out any money for gifts.
The Merklins target their giving
Marc Merklin says he makes regular donations to all kinds of charities and nonprofits. Some come out of his pocket, but some come out of the funds he has created.
In 2002, using a $5,000 community service award he received from his employer, Merklin set up the Marc and Sharon Merklin Family Fund through the Akron Community Foundation. He could have donated the whole amount as a lump sum that year “and it would have done some good,” but by using it to create and grow this fund “it will create an income stream (for ongoing gifts) even beyond our lifetime,” Merklin says.
Merklin receives quarterly statements from the foundation to let him know how much is available for gifting. So far, he’s made grants totaling $1,600 to the Copley-Fairlawn School Music Boosters and the Jewish Community Board of Akron from that fund.
Last year, he and his brother Jim set up the Judith L. Merklin Memorial Fund in their mother’s memory through the Jewish Community Board of Akron. They expect to recommend gifts from that fund to support programming at the Jewish Community Center.
The Vernons have seen their fund grow
In 1993, Dave Vernon founded the M. Catherine and David C. Vernon Fund with $5,000, adding to it over time. To date, he has made $13,000 in grants to the Boy Scouts, The University of Akron, Council on World Affairs, substance abuse treatment and prevention, and regional arts organizations—all causes they care about.
“We start with what’s important to us,” Vernon says, adding that in the world of philanthropy, “we’re just little minnows, we’re not whales ... but we do what we can.”
Donor-advised funds increasingly
While donor-advised funds have been around since the 1930s, they’ve grown in popularity in the last decade. In fact, the number of donor-advised funds being created and the amount of assets they hold are increasing at a far greater rate than all other charitable giving vehicles, according to the National Philanthropic Trust.
Allen says she’s encountered lots of generous givers in our area who had no idea that they could leave a legacy for as little as $5,000 and do it flexibly without the financial or administrative burdens involved in establishing a private foundation.
She loves watching people’s eyes light up when they hear about what other local families have done and consider the possibilities themselves. “We’re kinda like V8,” she says, by helping people realize “I coulda’ done this.”