"It is every man's obligation to put back into the world at least the equivalent of what he takes out of it." - Albert Einstein

FAQ Frequently Asked Questions

What is a Donor Advised Fund?

A donor advised fund is a charitable giving vehicle wherein an individual, family or corporation makes an irrevocable, tax-deductible contribution of personal assets to a charity and at any time thereafter can recommend grant distributions to qualified charitable organizations.

What is the difference between Donor Advised Funds and Private Foundations?

Starting a private foundation can involve substantial start up costs and administrative expanses, such as the yearly filling of a Form 990-PF. But one of the most important differences is that Donor Advised Funds receive more favorable tax treatment than a private foundation. Donor Advised Funds allow donors to take a federal income tax deduction up to 50% of adjusted gross income (AGI) for cash contributions and up to 30% of adjusted gross income (AGI) for appreciated securities; versus 30% of AGI for cash contributions and 20% of AGI for appreciated securities for a private foundation. Donor Advised Funds also offer the ability to recommend grants anonymously, if desired. It is also possible to convert a foundation over to a donor advised fund to simplify on going maintenance and record keeping.

Why contribute to a Donor Advised Fund rather than directly to a charity?

Donor Advised Funds provide a number of benefits that direct donations to a charity may not, including:

Ability to accept and process appreciated securities an which the donor does not have to pay capital gains tax.
Variety of investment options allowing the contribution to potentially grow over time.
Capacity to receive one block of securities that can benefit multiple charities.
Creation of a legacy versus providing a one time gift.
Separation of tax planning and charitable giving, donor receives tax deduction when contribution is made, but grants to charity can be made later.
Simplicity, a single contribution can benefit multiple charities while only requiring one tax substantiation letter.

Who should be listed as the donor?

The donor is the person or persons responsible for making the contribution(s) to the Donor Advised Fund. If the contributions are from joint ownership, then multiple donors can be listed. If the donor wants non-contributors to have grant making rights to the account, they should name those individuals as account advisors.

What is an account advisor?

An account advisor is named by the donor to recommend grants from the account. An account advisor is usually a spouse, child or relative.

What is an account successor?

An account successor is the person identified by the donor to take over the account after the donor's death. Multiple successors can be named to an account and, depending on the donor's wishes, the account can be split equally among the successors, or they can share the responsibilities. Successors can name future successors to take over the account in the event of their own death, essentially leaving a legacy from one generation to the next and so on.

What is a charitable beneficiary?

A charitable beneficiary is a charitable organization(s) identified by the donor to receive either all of the remaining assets of the account or 5% of the account annually upon the death of all the original donors. This is done as an alternative to naming an account successor(s).

Can an account be named after someone other than the donor?

Yes, donors can choose any name for the account. However, it is recommended the name reflect the donor's name and/or the main purpose of the account such as "The Jones Family Foundation." Notably, each grant has the ability to be recognized by either donor name, account name, anonymously or by special acknowledgment (for example, In memory of, In Honor of).

When is contribution a considered a charitable donation?

A contribution is complete when the asset is out of the donor's control. The time frame varies depending on the type of asset and when it's transferred to the account. The process usually takes less than two weeks.

What is the minimum to establish a Donor Advised Fund?

The lowest Donor Advised Fund we work with has a minimum of $10,000. We're independent financial advisors and work with many different Donor Advised Funds and can help you select the funds that most closely match your requirements.

What types of assets can be contributed?

Cash, mutual funds, bonds, most publicly traded securities and real estate on a case by case basis. Please give us a call to help review your holdings to determine if they are appropriate for use in a Donor Advised Fund. If for any reason a fund can not accept a contribution, it will be returned to the donor's account of origin.

Can I contribute foreign stocks?

Yes, if they're traded on domestic stock exchanges. If they're not, please contact us prior to donation so we can have the security properly reviewed by a Donor Advised Fund.

What type of asset is best to contribute?

Appreciated securities that have been held for more than one year make the most effective contributions. You can avoid the capital gains tax on the securities and can deduct the total value of the contribution from your federal income taxes, up to 30% of adjusted gross income. Unused deductions can be carried forward for 5 years. Because of these advantages, you are able to give more to the causes you support.

What charities and nonprofits can grants be made to?

Grants can be made to charitable organizations that are tax exempt under Internal Revenue Code Section 501 (c ) (3 ) and public charities under Internal Revenue Code Section 509(a ). Grants can be made to private operating foundations but cannot be made to private no-operating foundations. Most established religious organizations and educational institutions are not listed as 501 (c )(3 ) nonprofits but are nevertheless tax-exempt charitable organizations.

How many grants can be made in a year?

There is no limit to the number of grants made out of an account. Most Donor Advised funds have a minimum grant amount that can be as low as $500.

The information contained on this site is for educational purposes only. It is not intended to be professional tax or legal advice; consult the appropriate professional regarding your specific situations.