DonorEdge’s value is in quality and current information which the Community Foundation designates by the “Check Mark-Review” brand to quickly let a donor know this is an accountable and transparent nonprofit. As we work with donors on achieving their philanthropic dreams, we start with educating them on a nonprofit’s program success that aligns with their community goals.

We are very enthused to be working with GuideStar as our technology partner for DonorEdge, being used for donor education work by the Greater Kansas City Community Foundation, the Community Foundation of Middle Tennessee (GivingMatters), the Columbus Foundation (Power Philanthropy), the Greater Houston Community Foundation (DonorHouston) and the Community Foundation of Central Florida.

Boomers do want to be “hands on” and involved in their giving. But I believe that their reasoning is that they want to be more impactful and involved with their giving. I think raising money for your endowment is much more of a “model #3″ activity, while premium service DAFs are the classic “Model #2″. So while figuring out how to work with the hands on attitude of the Boomers is key, the Model #2 concept I outlined lets donors be involved and also recognizes that even the most hands on donor can see that paying for expert assistance can be money well spent.

There is a definite movement afoot to be more “impactful,” strategic and proactive in grantmaking, but we (community foundations) all struggle with the difficulty of raising purely discretionary or unrestricted money from living donors…because it flies in the face of the growing Boomer “hands-on, I want to be in on the decision making” mentality AND because we can’t be perceived of as competing with the very nonprofits we serve with their annual and capital campaigns. I think that’s one major reason why donor advised funds are growing apace.

I think the challenge to community foundations is two-fold: 1) we must lower overhead costs by reducing costs for small funds 2) we must identify a pricing model that includes fee-for-service offerings and an overall fee structure that is progressive for the largest funds.

Plus I’m not advocating an “ad hoc” fee for service, but rather an ongoing advisory role, not a project based role. Most donors have multiple interests and so they can be best served by an organization with the depth to advise them across issue areas.

I agree that Schwab and Fidelity are dominating low cost admin. But I disagree that the other two fields have much competition. Yes there are independent consultants and a handful of firms like Arabella Advisors, but the playing field is still wide open. And while there are groups like Ploughshares, the market for this type of service is still highly immature.

It seems we already have the offerings you discuss, just not packaged the way your are advocating. We have low cost administration (Schwab, Fidelity, and communities foundations). We are experiencing the burgeoning of advisory services in the two flavors you suggest (ad hoc fee for service via philanthropy advisors and via “fund” mode like Ploughshares).

Wouldn’t it be prudent for communities foundations to offer distinct services in each category? If they outsource the administration, then how are they different than the advisory services that already exist?

Some donor advisors definitely see the value in a community foundation’s expertise, and utilize those services to facilitate their grantmaking. But I think an even larger percentage of donors use their funds just like a Schwab or Fidelity account, but still like the idea of being a part of a community foundation. They feel like the fees they pay are being used to benefit the community, and they enjoy the feeling of membership in a group of philanthropists striving towards a common goal — even if their grantmaking may not directly align with the unrestricted giving of the foundation.

I agree that it is foolhardy for a community foundation to try and be all things to all donors, but I do feel that by applying a progressive fee structure, reducing overhead through online interaction, and offering a menu of services to a range of potential clients, the community foundation can still provide added value to even the smallest funds.