Large private foundations in trust or corporate form became a favorite method of charitable giving among the wealthiest American individuals and families early in the 20th century. Examples include the Carnegie (1905), Rockefeller (1913), and Ford (1936) foundations. Today there are roughly 84,000 foundations filing with the IRS, with about $628 billion in assets. In 2006, investor Warren Buffett pledged $31 billion to the Bill and Melinda Gates Foundation Trust, a harbinger of mega-gifts and bequests to come via the Giving Pledge. Even after giving away more than $45 billion since its founding in 2000, the Gates Foundation reported assets of more than $50 billion in 2017.
A new tool for charitable gift planning was introduced in 1914 with the founding of America’s first community foundation in Cleveland, Ohio by attorney Frederick Harris Goff and the Cleveland Trust Company. The Cleveland Foundation and many subsequent community foundations were organized as trusts; others are in the form of charitable corporations.
By using a variance power (cy pres), public charitable foundations give donors the security of knowing that endowed gifts and bequests whose original purposes become outdated will remain useful to meet the needs of people in a particular geographic area. There are now more than 400 community foundations in the U.S.
Community foundations and Jewish Federations popularized field-of-interest funds and supporting organizations, and were among the first nonprofits to offer donor- advised funds (DAFs) in the 1930s. According to the National Philanthropic Trust, in 2017 there were more than 463,000 individual donor-advised funds in the U.S., with assets totaling $110 billion. Grants from DAFs to qualified charities provided
$19 billion in 2017. Fidelity Charitable alone received about $7.8 billion in gifts in 2018, and granted more than $5.2 billion to charities. The TCJA has made DAFs even more popular, since they can be funded when the donor can use a charitable deduction, and the DAF can make grants at a later time.