You can create a scholarship…sponsor a park bench…or give “micro-grants” to worthy causes

Do you want more control and/or credit for what happens to your charitable contributions, even if you have just a few hundred or a few thousand dollars to give?

Here’s how…


Join a “giving circle.” In a giving circle, friends or colleagues organize around a common interest, such as environmental conservation or education reform. They pool their resources and meet several times a year to select local charities or community projects for grants. Individual donations typically range from just $25 to $500 per year. Members are expected to take an active role in researching and visiting potential grantees.

Example: Bread For The Journey ( is a giving circle started by a minister and community advocate in Sante Fe, New Mexico, in 1988. It now has local chapters in 20 cities that make what they call “micro-grants,” typically ranging from $300 to $3,000, to recipients that include a Seattle clinic that offers free acupuncture to traumatized US war veterans…and a grassroots organization in Austin, Texas, that provides free transportation for the elderly and cancer patients. Chapter members feel a great sense of control over their charitable giving because they interact closely with the recipients in planning how the money will be used and they witness the benefits and results firsthand.

There currently are several hundred giving circles around the US that have raised a total of more than $100 million in funds. To locate one near you or to learn how to start your own, go to

Tax advantages: Giving circles are typically nonprofit charities with tax-exempt status from the IRS, so you can take a charitable deduction on your income taxes for the amount you give.

Create a scholarship. School funding has taken a big hit since the 2008–2009 recession, and your former college or high school—or the college or high school of a loved one—may be eager to accept a donor-specified gift.

How it works: Call the individual in charge of charitable donations at the school and describe the type of scholarship that you would like to establish. He/she will work with you to create an annual scholarship in your name or in memory of someone, typically for $100 to $1,000 a year or more. For example, if you weren’t a good student in high school, you could start a scholarship for an underperforming high school student that offers money for a tutor. Note: Larger educational institutions may have much higher minimums ($5,000 and up) to create a named scholarship or a donor-specified gift. But even at those schools, you still can donate smaller amounts to already existing scholarships with criteria that align with your philanthropic wishes.


Set up an account at a donor-advised fund. These independent public charities, run by well-known investment companies such as Fidelity, let you grow your money in an investment portfolio and make grants from the portfolio.

How it works: You open a brokerage account at a donor-advised fund, then make a tax-deductible, irrevocable contribution (typically at least $5,000), which means that you can no longer use the money for any purpose other than charitable giving. Your account can be funded with cash…publicly traded securities…mutual fund shares…and/or the cash value of a life insurance policy. You choose from investment portfolios with aggressive, moderate or conservative allocations. You are allowed to decide what grants are made, when and to whom as long as the grants are to IRS-qualified public charities.

Costs: The donor-advised fund handles all the administrative, legal and tax-related tasks for an annual fee that typically is 0.6% of total assets. Additional investment fees range from 0.1% and up annually.

Tax advantages: When you make a contribution to a donor-advised fund, the IRS allows you to take a deduction on your adjusted gross income (AGI) for that amount. Depending on how much cash you donate, you are allowed up to 50% of your AGI. For donations of securities such as stocks, you can take up to 30% of your AGI. Deductions for any contributions exceeding these annual limits may be carried forward for up to five years.

Recommended: Fidelity Charitable Gift Fund (800-262-6039,, the largest donor-advised fund in the US, has made more than $13 billion in grants. For the Calvert Giving Fund (800-248-0337,, your contributions are invested in Calvert’s “socially responsible” mutual funds.

Establish a charitable fund through a community foundation. These are supported by local donors and typically focus on benefiting a specific community.

How it works: There are similar rules, costs and tax advantages as with a donor-advised fund. Typical donations are in the thousands of dollars, but you can contribute as little as $100 to many community foundations. You give directly to the foundation, but the staff typically is willing to consult and work closely with you to determine and address the areas of greatest need in your community and what grants your money should fund. This also gives you the opportunity to network with other donors on charitable issues.

Example: The Cleveland Foundation in Ohio was the first community foundation in the US. In 2011, grants of nearly $80 million were made to local programs such as the Cleveland Shakespeare in the Park festival and scholarships to Montessori schools for children in financial need. There are about 1,000 community foundations across the US today. Find one near you at

Give a donor-designated contribution to your local hospital. How it works: Contact the hospital’s development office. The staff will work with you to fund existing programs or designate specific tax-deductible gifts ranging from a donation to a certain department to purchasing a piece of medical equipment. For example, I had a client who recovered from breast cancer at a teaching hospital. She donated several thousand dollars to fund breast cancer research there.

Give to your local municipality. Visit your municipality’s Web site. You typically can find donation programs under the mayor’s office or a specific department to focus your philanthropy. Your name and donations may be listed online or in printed materials. And in many areas, there are opportunities for even more direct acknowledgment, such as a plaque with your name and an inscription.

Examples: The Central Park Adopt-A-Bench program allows you to adopt a bench for a onetime gift of $7,500. And in Stamford, Connecticut, Mill River Park will put your name on a stepping stone for $500…a bike rack for $2,000…or a carousel horse for $10,000.


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