Last Tuesday would have been Grace Adrain’s sixth birthday.
Instead of a day marked with a family celebration around an illuminated birthday cake, Grace’s family was presenting $100 checks to local children’s charity funds.
The money, which comes from a fund in Grace’s name, is a way for family and friends to remember the artistic little girl who died last spring of a rare form of streptococcal disease.
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In the days after her death, close to 300 people donated more than $50,000 in Grace’s name. Lorne Adrain, a financial planner and author, and his wife Ann Hood, a critically acclaimed novelist, put the money into the Gracie Annabelle Fund for the Arts, which will be used to help fund programs each year.
“The outpouring of support was amazing after her death,” said Adrain. “The purpose of the fund is to support children’s art programs”
Now every year, Grace’s brother Sam and sister Ariane, with a little help from their parents, decide what children’s art programs they want to support with a $100 check.
“I wanted to give the kids some ideas, so I have gotten some information about creative arts programs in Rhode Island,” Adrain said. “The kids only have the option of spending the interest. That protects the principal but also allows the children to decide where they want the money to go.
“We will do this every year on her birthday,” Adrain said. “This fund will get bigger every year and for the rest of their lives and thereafter her brother and sister will be able to remember her this way.”
It’s called a donor-advised fund. It can be created by any individual, family, group or business organizations as a way to remain actively involved in the grant making process well after making a donation.
“Donor advised funds allow people to donate money, get the charitable tax break, but take however long they need to decide who gets the money,” said Rick Schwartz, director of communications for the Rhode Island Foundation, which helps people create these funds with a minimum donation of $10,000.
A financial tool being used since the early 1970s, donor funds have always been attractive to a wide audience.
“Theoretically it’s a parking place for charitable funds,” Adrain said. “If you had $10,000, but only knew where you wanted $5,000 of it to go, you can create a donor advised fund, get the tax credit and make the gift at any time.”
Adrain knows all about it. The donor-advised fund he set up in Grace’s name is the fourth one he has created through the Rhode Island Foundation. The other three, set up with book royalties, support Special Olympics athletes, needy children in Rhode Island, and community leadership initiatives.
“I can advise the foundation on how I want that fund used,” he said. “I give them the money and tell them where it should be spent. I also get an annual statement that tells me what allocations I have made and what is left.”
The convenience is one thing that has made donor advised funds more popular in recent years.
“The concept is wonderful for people that don’t have the assets to set up their own private foundation,” said Janet Marcantonio, president of the Certified Financial Planners Association of Rhode Island. “It is not all that unlike private foundations and it’s a way to get children and families involved in the philanthropic process.”
