Donor Advised Fund

The Fund For Philanthropy, a donor advised fund

TFFP is an independent IRS recognized 501(c)3 nonprofit organization founded by Tony Suber. We are committed to providing exceptional donor services, in ways that will surpass your expectations.

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.

A DAF works like a charitable bank account. You make an initial contribution to establish a fund, using gifts of cash, and/or appreciated publicly traded securities, and/or closely-held stock. The funds deposited into your individual account are carefully invested by TFFP’s Investment & Acceptance Committee, and the net income is credited to the your personalized DAF, similar to a mutual fund.

As a donor advisor, you can recommend charitable contributions from your DAF to non-profit organizations of your choice throughout the year. Contributing to a DAF allows you to enjoy the tax advantages, while minimizing the detailed administration and regulation of the gifting process.

Frequently Asked Questions

What is a donor-advised fund?

A donor-advised fund (DAF) is a charitable giving vehicle, which allows an individual, family or corporation to make an irrevocable, tax-deductible contribution of personal assets to a public charity, and at any time afterward, to recommend grants to qualified charitable organizations. Donor-advised funds are administered through a public charity that pools donors’ contributions, invests them according to the donors’ investment selection and makes grants to charitable organizations upon the recommendations of donors.

What is the difference between this fund and starting my own private foundation?

Starting a private foundation can involve substantial startup costs and administrative expenses, such as the yearly filing of a Form 990-PF. One of the most important differences, however, is that TFFP receives more favorable tax treatment than a private foundation. Donor-advised funds allow donors to take an income tax deduction up to 50% of adjusted gross income (AGI) for cash donations and up to 30% of AGI for appreciated securities; versus 30% for cash donations and 20% for appreciated securities, respectively, for a private foundation. Donor-advised funds also offer the ability to recommend grants anonymously.

Major benefits of a DAF include:

> Ease of set-up and administration
> One centralized fund for all of your charitable giving
> Immediate income tax deduction for amounts donated to the fund
> No capital gains taxes on appreciated assets donated
> Satisfaction from supporting your favorite charities with an account that you can personalize by name and pass on to your children
> None of the administration responsibility or annual excise taxes associated with a private foundation

Who can open a donor-advised fund account?

An individual, family, trust, municipality, corporation, private foundation and other entities can open a donor-advised fund account.

What is the account minimum to open a new account?

The minimum to open an account is $25,000.

Is there an additional contribution minimum?

No.

How quickly can I create a donor-advised fund account?

At TFFP, it takes less than a day. Once you execute a Giving Fund Agreement and submit a Giving Fund Application, your account is established and ready to receive contributions.

How do gifts of closely-held stock work?

Closely-held stock can be an excellent charitable gift and, for the maximum tax benefit, is contributed before any liquidation event including retirement, selling a business, taking a company public or merging with another business. Closely-held stock is widely considered one of the most complex types of assets to give.

Who should be listed as the donor?

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

Can an account be named after someone besides the donor?

Yes, the donor can choose any name for the account. However, we recommend the name reflect the donor’s name and/or the main purpose of the account, such as “The Smith Educational Fund” or “The Smith Educational Foundation.”

Can my DAF be named “Foundation”?

Yes

Can my children be involved with my donor-advised fund account?

Yes. You can name them as an advisor or successor advisor to your account. They can legally assume these roles as soon as they are 18 years old.

How quickly are contributions processed?

Publicly traded stocks are usually liquidated on the same or next market day after TFFP receives them. Cash contributions and securities, after they’re liquidated, are invested as quickly as possible.

What is an account advisor?

Any person named by the donor, and granted access to the account for making gift recommendations. Usually a spouse or child of mature age is named as an advisor to the account.

What is a successor?

The 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 successors to take over in the event of their death.

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.

How often may donors contribute to their account?

As often as they would like. Some people like to add to their accounts right after recommending grants. Others make regular contributions to build up the account for future grant making. The flexibility of the fund lets donors determine their giving timetable.

Can donors transfer assets from another donor-advised fund?

Yes, generally donor-advised fund programs allow donors to transfer funds from one program to another. Donors simply recommend a grant from their existing donor-advised fund account to their TFFP account. The grant should be to TFFP in care of the donor’s account in TFFP. When the grant is received, the funds will be credited toward the donor’s account. The account transfer does not result in a charitable contribution deduction because the donor has already received a tax deduction for the original contribution to a donor-advised fund.

What types of assets can be contributed?

Cash, mutual funds and publicly traded securities are eligible. For other securities, such as restricted securities, art, real estate, or other hard-to-value assets, TFFP should be contacted at 404.825.9529 because the transfer might take longer and involve additional costs and special instructions.

Are additional contributions to the account tax deductible?

Yes. Donors will be eligible for an itemized income tax deduction for a charitable contribution on the date the contribution is made to the fund. This deduction is subject to the deductibility limitations set by law. Donors may want to consult a tax advisor to review their personal situation. Donors will receive a consolidated statement of annual contributions and granting activity at the end of each fiscal year.

How is the tax-deductible amount determined?

The value of the contribution is based on the date it arrives in TFFP contribution receipt account. For contributions of securities, the value of the donor-advised fund account may be different than the determined value of the contributions. This difference is due to market fluctuations and liquidation costs.

How quickly are contributions processed?

Publicly traded stocks are usually liquidated on the same or next market day after TFFP receives them. Cash contributions and securities, after they’re liquidated, are invested as quickly as possible.

Where does the income from the investment vehicles go?

Income from the investment vehicles is reinvested and may potentially increase the value of the account. The income is neither taxed to the donor nor is deductible as an additional charitable contribution.

What is the last day this year donors can still make a contribution to receive the tax benefit?

For cash, donors must be able to show that the contribution left their possession as an irrevocable transfer to TFFP before the end of the calendar year. For restricted or non-publicly traded securities, the last day to initiate the asset transfer is close of business on the last business day of November. For publicly traded mutual funds, the last day to initiate the asset transfer is close of business December 14. For publicly traded stocks and bonds, the last day to initiate the asset transfer is close of business on the last business day of December.

Do donors file the contribution receipt with their taxes at the end of the year?

Donors will receive a Form 8283 for noncash charitable contributions to file with their tax returns at the end of the year. It’s important however, that they verify the documentation on the form since they’ll be held liable for incorrect information. Donors should also consult with their tax advisor.

What are the costs associated with the fund?

Each account is subject to an administration fee, which is paid to TFFP, to cover administrative expenses. Please download a copy of the Giving Fund Agreement for fee schedule details.