As the creator of a donor advised fund at a community foundation many years ago, I have become irritated by the lack of responsiveness and the increasing management fees. I would like to move the DAF to another nonprofit, including (possibly) the primary recipient of the DAF distributions in recent years. Is it possible to transfer a DAF from a community foundation to another nonprofit organization, presuming the current holder of the DAF agrees to do so? I understand that the community foundation actually owns the assets, which seems to make it highly unlikely that such a transfer will ever happen. —By email.
You are correct that a donor advised fund is owned by the community foundation that holds the fund and is subject to its absolute discretion and ultimate control. In fact, IRS regulations require that statement to be a part of the agreement so that donors can’t claim that they didn’t realize it.
Having said that, however, community foundations are required to continuously raise new funds in order to meet the public support requirements to avoid being classified as private foundations. They have a fundamental economic interest in having good relationships with their donors and avoiding unhappy donors who will discourage others from utilizing their services.
Under the Uniform Prudent Management of Institutional Funds Act, a donor has a right to modify the terms of a gift agreement so long as it does not change the charitable purpose of the gift. (See Ready Reference Page: “New UPMIFA Sets Rules for Management of Charitable Funds”) If the foundation sponsor agrees, the funds could be given to another public charity, either to hold as a donor advised fund or for outright use by the designated recipient of your selection. Talk with the foundation about your dissatisfaction and your desire to move the funds. They may find it in their interest to comply, if only to make it less likely that you will bad mouth their work in the community.
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