The Fund For Philanthropy

FAQs

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.
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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 The Fund For Philanthropy (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

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Who can open a donor-advised fund account?

An individual, family, trust, municipality, corporation, foundation and many other entities can open a donor advised fund account.
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What is the account minimum to open a new account?

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

Is there an additional contribution minimum?

No.
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How quickly can I create a donor advised fund account?

At TFFP, it takes less than a day. Once you execute a TFFP Fund Agreement and submit a TFFP Fund Application, your account is established and ready to receive contributions.
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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.
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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.
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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.”
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Can my DAF be named “… Foundation”?

Yes
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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.
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How quickly are contributions processed?

Publicly traded stocks are usually liquidated on the same or next market day after The Fund For Philanthropy receives them. Cash contributions and securities, after they’re liquidated, are invested as quickly as possible.
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Is the TFFP website secure for credit card processing?

Yes. TFFP is PCI Compliant. Our Compliance Certificate is on file for your review.

 

 

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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.
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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.
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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.
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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.
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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 The Fund For Philanthropy in care of the donor’s account in The Fund For Philanthropy. 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.
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What types of assets can be contributed?

Cash, mutual funds and publicly traded securities are eligible. For other securities, such as restricted securities, or illiquid assets such as 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. TFFP has a wide range of expertise in transferring contributed assets, as such we are better equipped to handle your needs.
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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 tax-deductible 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.
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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. Always consult with your independent attorney, tax advisor, investment manager, and insurance agent for recommendations and before changing or implementing any financial, tax, or estate planning strategy.
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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.
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Where does the income from the investment vehicles go?

Income from the investment vehicles is reinvested and may potentially increase the value of the donor advised fund account. The income is neither taxed to the donor nor is deductible as an additional charitable contribution.
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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 The Fund for Philanthropy 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.
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Do donors file the contribution receipt with their taxes at the end of the year?

Donors will receive a Form 8283 for non-cash 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 attorney and/or advisor.
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What are the costs associated with the fund?

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