Personal Finance & Money Asked by OzarkNathan on July 3, 2021
Is there a mechanism by which you can put aside a lump sum of money (before or after your passing) wherein the money can just sit and earn interest in a safe investment in perpetuity and disbursements to charities of your choosing can be made (also in perpetuity) at regular interval? We’re talking a relatively small sum of money – say $100k for example.
I guess it’s probably too good to be true.
If it doesn’t exist, which of the above mechanisms would come closest with the least hassle and fewest fees?
If you contact the charities you are interested in donating to, they might be willing to accept a restricted endowment. A restricted endowment can restrict the charity's spending of your gift. If you decide to pursue this, you may want to get legal advice on the wording of the instructions you give the charity with your gift. Without knowing your circumstances, the charities involved, etc. I cannot say whether this would be appropriate for you and your goals.
Answered by Charles Fox on July 3, 2021
The Fidelity DAF has a "recurring grant" feature that you can use to make scheduled donations. I assume other DAFs are similar.
Once you die your DAF passes to your beneficiary and they can choose to do whatever they like with it. Also, market risk is very high so there is no way to guarantee the "in perpetuity" part without settling for a very low interest rate. If you invest in equities/bonds then withdrawing ~3-3.5% per year is "probably forever".
Answered by Gabe Moothart on July 3, 2021
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