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The college students Karen Long met at California State University, East Bay in 2014 were anything but typical. They didn't have families to lean on when they got lonely or had questions about their major, or when they needed money for room and board, tuition or textbooks. Even meals to eat over the holidays were not a given. What they did have, Karen learned, was the Renaissance Scholars Program, which provides college scholarships and academic and emotional support to children exiting the foster care program.
These students' stories of struggle were all too familiar to Karen, who retired in 1999 after 35 years as a high school counselor in the Oakland, California area. "I may not have known these particular students personally," she said, "but I knew their backgrounds…And it was very clear in talking to them that they would not be in college, and certainly not graduating, without the help of this program."
Karen decided to recommend a $5,000 grant each year for five years to the Renaissance Scholars using her donor-advised fund, which she established upon her retirement.
Thanks to the benefits of a donor-advised fund, Karen had nearly $25,000 more to give to charity in the past three years.
A donor-advised fund is a dedicated account for the sole purpose of supporting charitable organizations you care about. When you contribute cash, securities or other assets to a donor-advised fund sponsoring organization like Fidelity Charitable, you are generally eligible to take an immediate tax deduction.
Then you can recommend both grants to charities and investment of the remaining funds to potentially grow the charitable dollars tax-free over time. Ultimately, this can allow even more money for granting to charity.
This $25,000 planned grant was made on top of her usual support to charities she cares about. About $23,000 of the grant came from investment growth on the donor-advised fund account balance over the past three years, as well from tax benefits from contributing mutual fund shares that had appreciated for more than a year. "The fact that I had enough resources with the donor-advised fund to be able to do that was pretty exciting," Karen said.
Giving back is a family value for Karen. She volunteers weekly at a local food bank and uses her donor-advised fund, which she established and has grown mainly through donation of mutual funds each year, to support a number of local education, arts, and public parks programs. She also participates in a giving circle, nicknamed the Fairy Godmothers, which is where she first learned about the Renaissance Scholars Program.
"The idea of being able to provide support to the Renaissance Scholars was just really gratifying," said Karen. She used her donor-advised fund’s pre-scheduling feature, which allows donors to recommend grants to their favorite charities be disbursed at chosen intervals. "I can say exactly what I want to donate and when and have it done automatically," she said. "It’s wonderful."
She said she wouldn’t have been able to provide this support without her donor-advised fund's charitable planning advantages.
Donor-advised fund account growth and the ease of donating long-term appreciated mutual fund shares to Fidelity Charitable meant Karen was able to help support 14 more students.
Helping to send 15 former foster kids to college
University officials were thrilled with her support, too. Karen's support helps provide scholarships and fund community-building activities among Renaissance Scholars, who rely on one another’s shared backgrounds for emotional support. The program includes about 45 students per year and reaches another 20 foster students who qualify for some on-campus aid, such as priority housing and registration. The average cost for scholarships and programming per student is about $1,600 per year.
It's obvious their lives have been changed by the Renaissance program.
"It’s obvious their lives have been changed by the Renaissance program," said Karen, who met many of the scholars she’s helping at an end-of-year awards luncheon. "They were just in tears about the kind of support that they were getting."
Karen is helping more disadvantaged students beat the odds and be successful in college, thanks to her donor-advised fund. Could a donor-advised fund help you to give more?
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