(Harrisburg, Pa.) - One of the easiest ways to show support for your community, your community foundation and other charities across the nation is to create a donor advised fund, one of the most flexible and powerful tools for businesses interested in philanthropy contributions, at a community foundation.

Resulting in a more thoughtful and more informed donor community, donor advised funds at a community foundation are an attractive way for philanthropists to maximize their donations in terms of the impact on charities and on their own tax bill. Reducing fundraising and administrative costs and assuring that the donors' contributions will be put to best use, the growth of donor advised funds is striking.

"Donor advised funds have big advantages for businesses," said Spencer Nauman, Jr., Partner with Nauman Smith Shissler and Hall, LLP, practicing in corporate, probate/estate planning, taxation and insurance law for more than 40 years. "Not only are donor advised funds not subject to excise taxes and easier and less pricey than setting up a private foundation, but they are also subject to fewer limitations and regulations, meaning they can be set up faster at less cost than private foundations. Additionally, you can start small and increase your fund as you go."

While increased contributions are important, donor advised endowment funds, those from which only income is distributed as grants, are about much more than dollars involved. They help foster a culture of giving. Promoting long-term commitments to supporting worthwhile causes, donor advised endowment funds provide donors the opportunity to sort out their charitable priorities in deciding what matters most and why. Because they grow in value over time, donor advised endowment funds let donors play a role in grants that have a major positive impact on grant recipients.

"Donor advised endowment funds are perpetual," said Mr. Nauman. "A donor's money grows tax-free in investments, and increasing income from the fund can be distributed out over time. That gives the donor more involvement than, for example, writing one check for a lump sum. This way, if the donor doesn't like what a charity is doing with its money or if it finds a more worthy cause, it can advise the community foundation that it stops the flow of money and change recipients."

Nonpermanent donor advised funds, those from which both principal and income can be distributed as grants, are also an alternative to private foundations.

"If a donor is considering establishing a private foundation to carry out charitable interests, the donor may want to consider establishing a nonpermanent donor advised fund at a community foundation instead. These funds offer several advantages over private foundations," explains Mr. Nauman.

Businesses are often inundated with requests for contributions. This can result in an unfocused program of charitable giving and significant administrative expense. Some companies may be unable to budget a consistent flow of charitable dollars.

By establishing a nonpermanent donor advised fund at a community foundation, a business could simplify and focus the giving process, making systematic contributions in the amount of its charitable tax deduction. The community foundation handles the administrative paperwork; investment and grant making at a low cost.

Named for the business donor, a nonpermanent donor advised fund can provide a dependable and committed source for charitable grants even during years when cash flow at the donor's business is tight. In good times, the company can add to its fund, thereby providing flexibility to even out the highs and lows inherent in most business cycles.

Counsel to the Community Foundations for Pennsylvania since 1992 and advising various community foundations in Pennsylvania for many years, Mr. Nauman states, "We should be encouraging and nurturing the growth and innovation of donor advised endowment funds and nonpermanent donor advised funds at community foundations by businesses. They are opening up the world of long-term, family-based, high-quality philanthropy to both large and small business entities with charitable intentions."

Founded in 1871, Nauman, Smith, Shissler & Hall, LLP, is the oldest law firm in continuous existence in Harrisburg. For more information regarding this news release, please contact Karen Gross at (717) 975-2148 or visit the newsroom at www.hersheyphilbin.com.