A donor-advised fund is a charitable giving vehicle wherein an individual, family, or corporation makes an irrevocable, tax-deductible contribution of assets to the Foundation and at any time thereafter can recommend grant distributions to qualified charitable organizations. To download a pdf of this information, simply click here.
A private foundation requires substantial start up costs and ongoing expenses, such as the yearly filing of a tax return. 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 ongoing maintenance and record keeping.
- Variety of investment options allow the contribution to potentially grow over time.
- Creation of a legacy versus providing a one-time gift.
- Ease of use allows tax-deduction for your gift when contribution is made but donor can make grants to specific charities in the future when they are ready.
- Simplicity, a single contribution can benefit multiple charities.
Yes, if the balance maintained is equal to or more than $100,000.
An account advisor is named by the donor to recommend grants from the account. An account advisor may be the donor or his/her spouse, child or relative, financial advisor or anyone that the donor trusts to make decisions that reflect the donor’s wishes.
An account successor is the person identified by the donor to take over the account upon the donor’s death, incapacitation, or the donor’s wishes. 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.
Yes, donors can choose any name for the account. However, the name commonly reflects the family name or the purpose of the fund. 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).
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 a week.
The Southeast Virginia Community Foundation has established a $5,000 minimum.
Cash, mutual funds, bonds, most publicly traded securities and even real estate and tangible personal property on a case-by-case basis.
Yes, but only if they are traded on domestic stock exchanges.
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 non-operating foundations. Most established religious organizations and educational institutions are not listed as 501(c)(3) nonprofits but are nevertheless tax-exempt charitable organizations.
There is no limit to the number of grants made out of an account. Donor Advised Funds at the Southeast Virginia Community Foundation have a minimum grant distribution of $500.