Citing high participation and some internal rejiggering, the Fidelity Charitable Gift Fund announced Thursday it plans to cut administrative fees by 40% or more.
The fund uses fees to verify the status of charitable organizations, as well as the processing or grants and contributions.
"The mission of the Gift Fund always has been to increase the level of charitable giving across the United States," said David Guinta, president of the fund.
Established in 1991, the Gift Fund has $3.5 billion under management. Since its inception, the fund has issues $5.8 billion in grants to more than 95,000 not-for-profit agencies.
Starting in July, the fund will reduce the fees levied on Giving Account balances from 1.00% to 0.60%. The minimum annual administrative fee will remain $100.
Accounts with balances greater than $500,000 will see fees drop even further, fund representatives announced.
"Sometimes we're able to encourage more giving through program and service enhancements," said Guinta. "In this instance, a combination of operational efficiencies and our recent record growth have allowed us to reduce fees and enable donors to give even more to the charities they support."
Reduced investment management fees from 0.42% to 0.18% on the Money Market Index, and from 0.10% to 0.07% on the Total Market Index, which affect about 40% of all Giving Accounts, further contribute to the cost reduction.
The new rates mean an $80 annual savings in fees for accounts with $20,000 balances, and $300 less each year for accounts with $75,000.
"Donor-advised funds are part of a fundamental shift in philanthropy toward more strategic and thoughtful giving by a broad spectrum of donors -a shift that we believe will continue to result in more dollars flowing to the nation's charities," said Guinta.
