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October 22, 2001
Calvert Foundation Launches Donor Advised Fund
    by Mark Thomsen

With a $5,000 minimum, the Calvert Giving Fund enables many investors to reap the multiple benefits of having a donor advised fund.


Today the Calvert Social Investment Foundation introduced the Calvert Giving Fund, a donor advised fund that combines charitable giving with socially responsible investing. Money given to the Calvert Giving Fund is invested in socially responsible mutual fund portfolios managed by Calvert Group, as well as in Community Investment Notes managed by Calvert Foundation. The low $5,000 minimum gives investors donation control and tax-saving opportunities previously available only to more well-to-do investors.

"This is the first donor advised fund to offer a socially responsible mutual fund family and community development investing," said Timothy Freundlich, Director of Strategic Development for Calvert Foundation. "Calvert Giving Funds allow donors to make the world a better place not only when giving, but also by investing to create jobs, build homes and change lives."

A donor advised fund is usually structured like a public charity, and in many ways acts as a private foundation. Individuals or institutions set up accounts by making an irrevocable contribution to the fund, and the donor gets an immediate tax deduction for the amount of the gift. If the gift was made in appreciated securities, the donor gets a double tax benefit: no capital gains taxes, and a tax deduction amounting to the value of the securities at the time of contribution.

The donated funds are then invested and may appreciate tax free, and the donor can make gifts to IRS-approved nonprofit charities at any time. One feature that some donors find important is that with each gift, the donor can choose give anonymously or in his or her own name.

The Calvert Giving Fund leverages Calvert Foundation's research on various charities to offer added value for investors. Through what are called Giving Folios, Calvert Foundation gives investors access to portfolios of nonprofits selected by top grant makers from around the country. The Giving Folios are categorized by issue area; for example, an Environmental Giving Folio might include the names and overall methodologies of a dozen high-performing nonprofit groups working to save the environment.

Mr. Freundlich believes this is one of the features that sets the Calvert Giving Fund apart from other donor advised funds.

"Our commitment is that we are not going to be just another fund firm - grabbing the money, investing it, and leaving people on their own to evaluate charities," said Mr. Freundlich. "We are putting our values on the table too, providing clients with our expertise in the philanthropy market."

Money in the Calvert Giving Fund is invested in up to 12 socially responsible mutual fund portfolios, which are managed by Calvert Group. Money is also invested in Community Investment Notes, which are managed by Calvert Foundation. Investors have three options to allocate Giving Fund assets: a standard allocation, a balanced allocation that has potentially higher appreciation and risk, and a customized allocation.

The Calvert Group is one of the few socially responsible fund families that can offer a variety of asset allocation choices. "This is a highly differentiated vehicle for philanthropists who care about social responsibility, want to invest in communities and who require in-depth information on the nonprofits they support," said Barbara Krumsiek, CEO of The Calvert Group.

According to Mr. Freundlich, in an unrelated development The Vanguard Group recently decided to offer the Vanguard Calvert Social Index Fund (VCSIX) through its Vanguard Charitable Endowment Program's donor advised fund. This would seem to indicate that a growing number of investors want social and environmental impacts not only through their donations, but through their investments as well.

More information on the Calvert Giving Fund, as well as forms to open an account, can be found at www.calvertgiving.com.

 

 
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