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Since 1914? Donor Advised Funds—An Old New Trend in Giving

Donor advised funds seemed to explode on the charitable giving scene in just a few short years. Today, the top charities in the country are donor advised funds. By 2015, the donor advised fund world reached $80 billion in assets.

But for all this rapid rise, few seem to remember their history.

At the turn of the 19th century, John D. Rockefeller had become one of the wealthiest men in the world. As part of his strategy, he utilized a variety of trusts and charitable trusts to advance his interests. He ultimately created the Standard Oil Trust, which allowed him to centralize his holdings in 41 states. But the trust met with disfavor under federal anti-trust laws. In addition, some questioned Rockefeller’s use of charitable trusts, seeming to perpetuate family wealth more than they accomplished charitable objectives.

As a result, in 1914, Frederic Goff, a Cleveland lawyer, created the first community trust, the Cleveland Community Foundation. By placing funds in the hands of community trustees, the goal was to encourage philanthropy among the common man and to make sure that giving out into the community actually occurred.

Goff’s innovation caught on and spread to other communities. Today, his innovation has influenced billions of dollars of charitable giving. Donor advised funds typically have a much higher giving percentage than any private foundation.

Goff’s innovation spread as well to commercial providers like Fidelity, Schwab, Vanguard, and others. By 1980, one of the first Christian community foundations was established. In 1982, the National Christian Foundation was established, and in 2000, the Servant Foundation became one of the first stand-alone affiliates.

As wealth transfer continues in this country, the donor advised fund continues to be a vital tool in that transfer.

Related articles:
5 Big Reasons Why Christians Are Using Donor Advised Funds
5 Reasons for Christian Foundations to Switch to Christian Donor Advised Funds
5 Reasons to Select a Christian Donor Advised Fund

About Bill High

Bill is CEO of the Signatry: A Global Christian Foundation. He works with families, individual givers, and financial advisers to share the foundation’s message regarding biblical generosity and charitable giving. He is the co-author with David Green of Giving It All Away and Getting It All Back Again: The Way of Living Generously: www.givingitallawaybook.com. » Learn More

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