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Financial Planning > Charitable Giving

Boost for Charities? Vanguard Drops Costs of Donor-Advised Accounts

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In an effort to make more money available for philanthropic giving, investment costs for Vanguard Charitable’s 7,700 donor-advised accounts are dropping between 25% and more than 60% per year, the organization announced Tuesday.

“We’ve dramatically reduced the costs and increased the value of Vanguard Charitable investment pools by collaborating with Vanguard on improved pricing,” the program’s president, Ben Pierce, said in the statement. “With reduced costs of investing, we project that our donors could be able to support their favorite charities with more than a million grant dollars in the first year alone.”

Effective July 1, the investment costs for Vanguard Charitable pools will drop from between 0.07% and 0.28% to an estimated range of between 0.06% and 0.21% a year.

The announcement gave this example: The annual investment costs for a $100,000 donor-advised account that is fully invested in the organization’s Gift Preservation Pool will drop from $240 to an estimated $110 per year, a decrease of approximately 54%. (All Vanguard Charitable accounts also pay a separate administrative fee each year; this will remain unchanged.)

Vanguard Charitable currently offers nine investment pool choices, with costs of their underlying funds expected to fall. In addition, larger Vanguard Charitable accounts also have access to a pool fully invested in The Investment Fund for Foundations’ Multi-Asset Fund, an actively managed option that is normally available only to universities, endowments and other nonprofit organizations.


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