Alternative Investments for Donor Advised Funds
Alternative investments provide a unique and entrepreneurial opportunity to grow the charitable contributions you have made to a donor advised fund.
Why Alternative Investments?
Many donor advised fund sponsors offer investment opportunities in the public markets to grow a fund’s balance over time.
However, there are often private investment opportunities – called alternative investments – that may offer attractive options, like the opportunity to impact a specific industry or to potentially earn a higher rate of return.
The Signatry is open to partnering with donors and financial advisors who wish to recommend alternative investments for the money that is held in a donor advised fund. We have invested in a wide variety of alternative investments, including opportunities we bring to the table and those introduced to us by donors and advisors.
What are Alternative Investments?
An alternative investment can be any investment opportunity that is not in public stock markets or other public securities. Examples include private equity, venture capital, hedge funds, commodities, and real estate.
In addition to alternative investments, The Signatry also offers biblically responsible investment pools and advisor-managed investment accounts for donor advised funds.
Growth, Impact, and Other Benefits of Alternative Investments
Diversified for sustainable growth: Just as with a personal portfolio, many donors recommend diverse investments for the balance of a donor advised fund. Alternative investments offer the potential for a higher return on investment, which could generate more funding for the causes you want to support in the future.
Impact investing today: Some of our alternative investments are impact-driven businesses that work to solve big problems with a for-profit model. From social enterprise to innovative medical research and more, alternative investing in a donor advised fund means your charitable contributions can make an impact now, generate a return, and make a greater impact for a nonprofit in the future.
Based on the recommendations of our donors, The Signatry has invested in a variety of values-aligned, mission driven enterprises that are tackling some of the world’s greatest problems. Some of these include businesses that:
- Generate economic development in the developing world through a lease-to-own motorcycle taxi program
- Offer cashback rewards that can be directed to nonprofit organizations
- Develop non-invasive diagnostic tests for cancers and other diseases
How does it work?
Step 1: Set up a donor advised fund with The Signatry.
Our team only reviews alternative investment recommendations from current donors to The Signatry. Start here to open and contribute to a donor advised fund.
Start Here
Step 2: Submit a recommendation
Contact our team to recommend an alternative investment for a donor advised fund. We will follow up with a request for information about the potential investment, the amount required to invest, and your relationship to the opportunity.
If you would like to learn more about the alternative investment opportunities we have pre-vetted for qualified donor advised funds, please contact our Donor Care team.
Step 3: Due diligence and legal review
Our team will work with you and the organization offering the investment opportunity to gather documentation for due diligence. This step typically lasts a few weeks, but it can be longer or shorter depending on when we receive information.
As a tax-exempt charity with federal and state reporting obligations, The Signatry’s due diligence requirements are different from those of an individual investor.
Step 4: Invest
Once the investment is approved, we will invest the approved amount from the donor advised fund. Any returns will occur on a timeline unique to the particular investment.
FAQs
What pre-vetted alternative investment opportunities does The Signatry offer?
Our pre-vetted alternative investment opportunities are open for qualified donor advised funds for set investment windows. As such, our offerings change over time.
Please contact our team if you are interested in learning more. Some of the organizations we have previously invested in include:
- A venture capital studio
- A real estate firm
Can I submit an alternative investment recommendation form before I establish a donor advised fund with The Signatry?
No. You must set up a donor advised fund and contribute to the fund before making investment recommendations.
What documents does The Signatry need to conduct your due diligence?
Our team reviews a variety of alternative investment recommendations; the required documents vary based on the nature of the opportunity. Once you submit an alternative investment recommendation form, our team will let you know what documents are needed.
Common requirements include:
- Formation and governance documents
- Subscription agreement
- Financials and tax reporting document
I am a financial advisor who manages an advisor managed account (AMA) at The Signatry. Can I recommend alternative investments?
Yes. Please include the name of the donor advised fund on your recommendation form, and our team will contact you about the details.
I already have an alternative investment in my personal portfolio. Can I donate it?
Yes, you can donate an existing alternative investment just like you can donate other nonliquid assets. Learn more about nonliquid charitable giving here.
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