• Give back to your community by investing your money in donor-advised grants.heap of the american money image by Maksim Pasko from Fotolia.com
  
  If you're looking for philanthropic opportunities, donor-advised grants may be the simplest and most accessible solution. These grants give individuals an easier way to give back to their communities and require less money to create than a family foundation, plus donors still have input into how the money is allocated. In the September 2009 "Kiplinger's Personal Finance" article "Start Your Own Charity," associate editor Thomas M. Anderson says donor-advised funds offer better tax advantages and require less money to operate than a foundation. And, he adds, with a donor-advised fund you avoid the annual excise tax imposed on family foundations.
  
  

Grants Administered Through a Community Foundation

• Most states have a community foundation that works with individuals and nonprofit groups to provide funding opportunities. Donor-advised grants administered through a community foundation usually have a local focus. For example, they may offer grants to arts programs in a specific city or county, or to social service programs across the state. For donors, these funds are convenient because you can start one with a lower minimum contribution than those administered through major financial institutions. And they give donors a stronger connection to their communities because they're giving to people within their own city or state. This arrangement also benefits grant applicants, as they're mostly competing against other applicants from their region.
  
  

Grants Administered Through a Financial Services Firm

• Many of the major financial services firms offer donor-advised funds, but they often cost more to set up than funds administered through nonprofit groups. In his "Kiplinger's" article, Anderson says the difference could be around $5,000 for a grant through a financial firm as opposed to around $1,000 for a grant administered through a community foundation. However, they may be more convenient for some donors, who may have other financial accounts with these providers, which include the Fidelity Charitable Gift Fund, the Schwab Charitable Fund and the Vanguard Charitable Endowment Program.
  
  

Grants Administered Through a Nonprofit Group

• Many nonprofit groups, such as churches and universities, offer donor-advised funds, where you can designate what aspect of the institution your money will fund. At a university, for example, you may set up a scholarship fund for students meeting specific criteria, such as studying a particular subject or coming from a certain city or high school. And at a church, you may set up a fund designated for community outreach programs or church maintenance and improvements, for example. You can ask individual churches, universities or other nonprofit groups if they regularly set up donor-advised grants or would be willing to do so.