Giving Compass' Take:
- Rockefeller Philanthropy Advisors provides an overview of the advantages and disadvantages of several giving vehicles to help donors decide which options make sense for them.
- Which of these giving vehicles is best aligned with your goals and preferences? Should all of your giving be funneled through one vehicle?
- Learn more about vehicles for charitable giving.
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As philanthropists’ values and visions evolve, so do their preferences around how they give. Some want to leave a family legacy; some wish for anonymity; some want to involve private sector practices in their approach. These shifts prompt evolution in the sector itself, which means that donors today have a wide range of options for creating the impact they envision.
As you learn about different vehicles for philanthropy, remember that none is an end in itself: the goal is to operate for impact, choosing the best way to achieve your vision. The impact you seek will determine the style of your giving.
Consider how each of these questions explored in our Philanthropy Roadmap guide will affect your choice of giving vehicles:
- What impact do you want to have, and how?
- Will you be working solo, or with others (family members or other philanthropic partners)?
- How public do you want your giving to be?
- What time horizon do you have in mind for your giving?
It can be incredibly fulfilling to personally hand a check to your favorite charity. Feeling closely connected to the mission and the people working to make it happen is very important to some donors. Today, many donors find that they wish to engage with the causes that they’re passionate about in a more formal way. If that’s true for you, it’s worth investigating whether a more established philanthropic vehicle—or combination of them—might provide the flexibility you need in order to achieve your charitable goals. Formal vehicles can create family legacies, or encourage new generations to give in their own way. They can provide avenues for anonymity and support for a multi-pronged approach to impact. They can also offer tax advantages, particularly in terms of donating appreciated securities to charity. Of course, you’ll need to speak with a tax professional about your personal circumstances.
Vehicles discussed:
- Direct Giving
- Private (Grantmaking) Foundation
- Donor-Advised Fund
- Private Operating Foundation
- Fiscal Sponsorship
- Single-Member Not for Profit LLC
- For-Profit LLC
The recent uptick in charitable vehicles, though exciting, can also be perplexing, especially for newer funders. In this guide, we’ll help untangle different approaches for giving, how they work, and how they can function together.