As we approach the time for those we know (or even us) to go back to school, we at DAFinitive® thought that we could all use a good history lesson. When did donor advised funds become what we know of today?
Although donor-advised funds may seem like a somewhat recent concept, they are more than 90 years old! The first sponsor organization, the New York Community Trust (NYCT), was established in 1924 by eleven local banks in an effort to make grantmaking more effective. According to the Trust’s website, the organization’s first donor, Rosebel G. Stiebel Schiff, established the Theresa E. Bernholz Fund with $1,000 to honor her favorite public school teacher (in 1921, she had organized a 50th anniversary celebration for Miss Bernholz). Grants were awarded to female students from her alma mater. Mrs. Schiff’s teachers had reason to be proud: she was assigned a patent in 1916 for designing a maternity skirt/dress and by 1950 was listed in the US Census as a business owner in the importing industry.
By 1929, the Trust had seventeen funds, whose assets ranged from $1,000 to $2.5 million. These original funds made grants in to both local and international educational institutions, public health and social services. The largest of which was the Laura Spelman Rockefeller Memorial Fund, established after the death of John D. Rockefeller’s wife and is still in existence. Earlier in the decade, The Rockefeller Foundation made the first grant from a private foundation to a community foundation when it gave the NYCT $50,000.
However, in 1931, the first donor-advised fund in the United States was established at the Trust by an electrical engineer and his wife, William S. and Francoise M. Duclos Barstow. Mr. Barstow made his fortune in the utilities industry and was a founder of General Gas & Electric (he later served as a trustee of the Thomas Alva Edison Foundation, as they had worked together).
In the midst of the Great Depression, the couple wanted to distribute their discretionary funds to the unemployed. After his death and the death of their only child, Mrs. Barstow created a second foundation at the Trust, which supported education and social services. The couple, who helped to develop Jupiter Island, FL, also were dedicated to equal rights; a 1939 gift of $150,000 (which would be worth nearly $3 million today) to a hospital in Stuart, FL, had only one requirement- that no one could be refused treatment because of their race.
Although the Trust has no geographical restrictions, they have spearheaded unique projects in their home territory. In 1957, the NYCT sponsored a project by local civic leaders to recognize 20 “Landmarks of New York,” which was organized to raise awareness of New York’s historical and architectural history. Although this did not protect the buildings from demolition, it sometimes inspired the public to advocate for their behalf. The project eventually comprised more than 300 landmarks, and the remaining plaques can still be seen today. In the 1970s, the Trust further expanded to include the Westchester and Long Island Community Foundations.
In addition to assisting individuals’ desire to help others, NYCT has also worked to respond to societal issues. In 1979 during the oil crisis, the Trust established the Energy Conservation Fund to support energy-efficient projects at nonprofit organizations. Five years later, a state government grant allowed for the program to expand throughout New York. It is now known as the Nonprofit Finance Fund.
In 1983, the Trust made the first private grant for HIV research before going further to create the New York City AIDS Fund (which dissolved in 2014). Other notable funds have included the first grant to expand City Meals on Wheels’ services, the Fund for New Citizens (to support undocumented immigrants), the Van Lier Fellowship to support underrepresented artists, the September 11th fund (which distributed grants to individuals, businesses and communities until 2004) and the NYC COVID-19 Response and Impact Fund to aid nonprofit service providers during the early days of the pandemic.
For those that want to establish a DAF today, the minimum contribution is $5,000, with the caveat that the minimum must be maintained for at least five years.
Today, the New York Community Trust is technically comprised of two entities: Community Funds, Inc. and The New York Community Trust. Together, it continues to administer more than 1,200 DAFs out of a total 2,300 individual funds. Many are permanent and accept grant applications throughout the year. As of April 2022, the Trust had assets of $3.2 billion and it gave out $200.5 million last year. Its current areas of interest include poverty, justice, education, health, arts, environment, LGBTQ, elderly, children and teens and civic affairs in the New York region and beyond.
