Donors who have a passion for a specific program or organization may establish a fund to benefit only that organization or program. Donor Designated Funds are similar to Donor Advised Funds. They differ in that disbursements from the fund are established at the time of the fund’s creation and do not require ongoing action on the part of the original donor:
- The donor makes one or a series of irrevocable gifts to RRCF to establish the fund.
- The donor identifies one or more public charities to be the beneficiary of distributions of the fund’s income (or principal and income) and the desired terms of those disbursements.
- Per the terms of the agreement, regular disbursements are made from the fund and in the event that one of the original beneficiary charities ceases to exist, the foundation will redirect that support to a public charity with a similar mission.
Donor Designated Funds are a good option for donors wishing to establish long-term support of the organization(s) or causes they care about, or to establish a legacy giving vehicle that will exist in perpetuity.
Field of Interest Funds
Perhaps a donor wishes to benefit a broad area, such as the arts, the environment, homelessness, or at-risk kids. Rather than naming a particular organization as the beneficiary, donors would then establish a Field of Interest Fund to address whatever broad area of need they hope to impact in a positive way. This is a good option for donors who care about specific issues and wish for the foundation to address those issues via the most effective means possible.
Oftentimes, donors have a passion for helping others but would prefer to leave the grants open-ended and let the foundation use the fund’s resources toward the area of greatest need. This is a good option for donors who wish to create a philanthropic legacy that will grow and change with the community and the foundation.