Donor Advised Fund - Woodbury Foundation

Donor Advised

Fund

Create a Legacy

Through a Named Fund

When you launch a fund through WCF, it’s like running your own nonprofit, only the foundation will take care of accounting, legal, and fundraising tasks. There are several options to fit the scope and direction you’re going for! A Donor Advised Fund (DAF) allows interested donors the opportunity to create a philanthropic fund from which they may make recommendations to the Foundation Board of Directors on distributions made from the fund for charitable purposes. These funds are simple to establish with a simple Investment Fund Agreement that is executed between the Foundation and the donor. Donor advised funds may be named funds. Donor Advised Funds are non-endowed.

How can I establish to a Donor Advised Fund?

Donor Advised funds require an initial contribution of $2,500 or more. Initial and subsequent contributions to a DAF may be made by check, credit card, appreciated stock or publicly traded securities as well as other forms of real property, subject to the Foundation’s Gift Acceptance Policy. Contributions made to a DAF are generally tax deductible at the time the contribution is made regardless of when distributions from the DAF are made. However, it is suggested that all donors consult with their professional advisor regarding their individual situation, prior establishing a fund.

What is a Donor Advised Fund going to cost me?

Fees are always kept to a minimum in order to maximize the impact in the community created by distributions from funds held by the Foundation. The fee is assessed based on the average daily balance for the quarter or a minimum of $37.50 ($150 annually), whichever is greater, as follows::

up to $250,000, 0.375% (1.5% annually)
$250,001 to $500,000, 0.3125% (1.25% annually)
above $500,000, 0.25% (1.0% annually)

The fund is assessed any applicable investment management fees (which are netted out of investment returns reported by the Foundation). Current investment fees are available by contacting the Foundation office.

How are Funds invested?

When the WCF and the donor are developing the Investment Agreement, the donor will be asked to examine a standard description of types of investment portfolios (for example, conservative, balanced, growth or aggressive growth with an Investment Firm) which the donor feels best matches their risk tolerance and this will then be documented in the Agreement.

The assets in your Fund are pooled with assets of other donors who have the same risk tolerance, and perhaps, other funds that the WCF holds for future investment purposes. Fund holders will receive a quarterly and a total calendar year statement of your fund’s activity and performance as part of the pooled fund’s activity and performance. You can also access your fund through the Foundation’s donor portal at any time to view the fund status and request donations from the fund.

How do I recommend a donation?

In the Fund Agreement that is executed between the donor and WCF, you will be asked to designate one or more representatives besides yourself (typically a spouse and/or children) who will be designated to make recommendations on distributions to one or more charitable organizations. The Foundation will verify that each grant is being made to a tax-exempt charitable organization. Please note, IRS rules require final decisions on distributions be made by the Foundation and any recommendations made by designated representatives are not binding until approved by the Foundation. The Foundation, upon completion of its due diligence, will make every effort to support donor recommendations. Recommendations are made by the donor completing a Grant or Donation Distribution Request Form found on the Foundation’s donor portal and submitting it to the Foundation for its consideration. Donors or designated representatives will continue to make distribution recommendations as long as the fund legally exists, meets minimum balance requirements, or until they relinquish authority to make recommendations. Donations must be no less than $250.

How can I plan for the continued use of proceeds from my fund?

Distributions from donor advised funds will be made in accordance with the schedule agreed upon at the time the Fund is opened and/or changed in discussions with the Foundation. Additionally, the Fund must have a balance of $5,000 plus the amount to be donated at the time the donation is made from the account. While requests can be made at any time, it is recommended that donors choose quarterly, semi-annually, or annually in order to allow charitable organizations the opportunity to plan for distributions. Recommendations made to the Foundation will be considered in a timely fashion and distributions sent out within 15 business days. Distributions may take longer to process depending on the process of completing due diligence on the recommendation.

Can I make a distribution at any time?

I opened my fund and want to make a distribution immediately; can I do that?

It all depends on which type of DAF was opened. Endowed funds are generally able to make distributions within one to two years following inception based upon the performance of the fund. Please remember that endowed funds may only use the income generated from the fund’s investment, in most cases. Non-endowed funds may make distributions immediately upon inception assuming that the distribution is being made to a qualified public charity or government unit and does not exceed the value of the Fund at the time of the distribution.

Thank you for considering establishing a fun with the Woodbury Community Foundation!