Advised Funds

Comparison of Funds

Private foundations are a great community asset and may be an ideal philanthropic option for some donors. For other donors, bigger tax savings, fewer administrative responsibilities and lower operational costs may matter more than autonomy. Whether you want to leave a bequest in your will or be an active donor during your lifetime, there are many advantages to using the CDA Foundation as a vehicle for your charitable giving. As a public-benefit foundation, we offer virtually all the benefits of charitable giving without the requirements involved in establishing a private foundation.

	CDA Foundation Advised Fund	Private Foundation
Start-up costs	No cost to donor	Approximately $5,000-$10,000
Time frame	Immediate	Several months
Tax status	Shares the public charity status with CDA Foundation	Applies to IRS for private foundation status
Minimum contribution	$10,000	None, but smaller foundations may not be cost-effective
Gift acceptance policies and procedures	In place by the CDA Foundation	Must establish all policies
Tax deductibility of gifts	50% AGI for cash gifts; 30% AGI for long-term capital gain; confirm with finance	30% AFI for cash gifts; 20% AGI for long-term capital gains confirm with finance
Administrative concerns (personnel, facility, grant management)	Services provided by the CDA Foundation	Must establish and maintain
Tax returns, state and federal	None	Yes, Federal 990 must be filed
Annual payout requirement	None	5% of net investment income
Annual fees	1%-3%, depending upon the type of fund	Grant-making, administrative and investment support are staffed and financed independently
Investments	Funds are professionally invested and managed through CDA Foundation	Must implement and manage
Donor involvement	Donor recommends grants to qualified nonprofit groups	Donor retains complete control over investments and grant-making, subject to IRS requirements
Privacy	Donors may remain anonymous	Donors may remain anonymous, but IRS form lists officers, directors and trustees
Governance	Not required as an advised fund	Board of directors
Staff	Knowledgeable staff in place and provided by the CDA Foundation	Must employ and manage staff

The CDA Foundation encourages personal philanthropy to address oral health issues and improve the quality of life in California. We recognize that every donor has different needs, values and interests. Some donors are interested in being actively involved in choosing nonprofit organizations or causes to receive support. Others prefer to contribute to a collective fund that benefits the community or focuses on a specific area of interest.

What are advised funds?
An advised fund is a vehicle for an individual, family, organization or business to create a grant making program tailored to their charitable goals. Through an advised fund, one or more advisors work with the CDA Foundation’s staff to make recommendations to the CDA Foundation for charitable organizations to receive support from their fund.

How does an advised fund work?
The individual, organization or group establishes a fund with a defined name, advisors, purpose and parameters. A legal agreement is created between the donor and the CDA Foundation outlining responsibilities and charitable use of the funds. The CDA Foundation invests and manages the assets of the fund in a diversified portfolio. Once the fund is established, the donor receives a tax deduction following IRS guidelines, may add to the fund at any time, recommend distributions from the fund, and receives information from the Foundation about their fund and the charities that have benefited.

How would an advised fund benefit an individual?
In addition to the personal benefits associated with giving to organizations they care about, donors can involve their families and perpetuate charitable values to future generations. As a public benefit foundation, we offer virtually all the benefits of charitable giving without the requirements involved to establish a private foundation.

How would an advised fund benefit a dental society, ethnic society or specialty group?
Establishing a fund with the CDA Foundation permits a group to utilize CDA resources, provides professional financial management of funds, offers professional gift planning advice, assures ethical standards of operation, and can enhance fundraising activities and component community services.

Will we be able to make grant recommendations for use of the funds?
Yes, through you or your advisors, you retain the privilege of making grant recommendations to nonprofit organizations you care about. Advisors can include yourself and spouse, and successor advisors such as your children. For organizations, advisors can be named positions such as president, executive committee, etc. CDA Foundation staff can work with advisors to identify organizations that represent a particular field of interest or geographic area.

Types of Funds
In our commitment to support your giving, the CDA Foundation offers several flexible charitable funds to match your personal approach to giving and charitable planning.

Designated Agency Funds: benefit one or more charitable institution designated by the donor. In some cases, the donor may itself be a nonprofit organization with its own board of directors. These funds permit an organization to utilize the CDA Foundation’s expertise and services while retaining their own identity and charitable purpose.

Donor Advised Funds: allow a donor to contribute assets to a fund at any time and then take an active role in grant making through recommendations to specific charitable projects or organizations. It is easy to support multiple organizations or interests through a donor advised fund.

Field of Interest Funds: donors with a particular area of interest or concern such as dental education, research or children’s oral health often establish field of interest funds. At the donor’s request, the use of the funds is restricted to the specified area.

Unrestricted Funds: are best suited to meet emerging opportunities in the community. Donors place no restrictions on how their funds are used and decisions are left to our Board of Directors. These funds are the most timeless in terms of community impact in addressing areas of greatest needs in California’s communities.

Endowed funds: are permanent legacy funds. Its assets are irrevocably held by the CDA Foundation and are managed to accomplish the designated charitable purposes. Endowed funds are designed to preserve the original gift in perpetuity, so only the annual spendable income is available for distribution.

Scholarship funds: encourage and support students pursuing academic goals. You may designate your scholarship fund for students attending a specific school or studying in a specific field.

How Can I Learn More?
If you are interested in learning more about how you, your organization or group can establish an advised fund, contact the CDA Foundation at foundationinfo@cda.org or call 800.232.7645, ext. 4917.