Donor Advised Funds
A donor advised fund lets donors recommend charitable grants from its income
and principal. It is very useful for donors who wish to take a charitable deduction
one year and make distributions over several years; who have a block of appreciated
stock from which they may wish to make multiple gifts; or for donors whose interests
may change from year to year. The Foundation has offered Donor Advised Funds since
1982 in partnership with local financial institutions, years before many of the
commercial gift funds began offering them. Donors have found that the convenience
and flexibility of the donor advised fund facilitates their charitable giving.
- Open a donor advised fund with a contribution valued at $10,000 or more.
- Name the fund.
- Work with the Foundation’s staff to publicize the fund as desired.
- Take a tax deduction at the time the gift is made.
- Periodically suggest grants from the fund for charitable purposes.
- Add to the fund at any time.
- Provide the services of its professional staff to the donor.
- Manage the fund, oversee its investment, and maintain fund records.
- Process distributions from the fund.
- File federal and state tax returns and provide an annual independent audit.
- Report the fund in its annual report and issue financial reports to the donor.
To comply with federal tax requirements, the Foundation’s governing Board
cannot be literally "bound" by suggestions from the donor.Grant suggestions may
be made only for organizations recognized by the Internal Revenue Service as tax-exempt
public charities (public institutions such as schools and municipalities, and religious
institutions such as churches are qualifying charitable purposes). U.S. tax low does not
permit the use of charitable dollars for services rendered to you or for gifts that you
have received in exchange for a donation. One example is the purchase of "memberships"
to museums and public television stations. Another is tickets to benefit dinners or
galas. In addition, the Foundation can not fulfill pledges of financial support you
have already made. Gifts to individuals, including scholarships, can not be made
through donor advised funds, due to legal restrictions. The Foundation has more
detailed guidelines on advised funds available for interested donors.
An individual or organization which places a fund in the Community Foundation gives up
control of these funds. They are no longer assets of the individual or the organization;
but instead, fall under the ultimate authority of the Foundation’s Board of Governors.
Although the funds will be permanently committed to the purposes outlined at the time of
the fund’s establishment, the individual or organization cannot be directly involved in
management of the asset or its investment.
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