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On behalf of those we serve, as well as our staff and volunteers, thank you for your contribution to SafePlace.
On behalf of FINCA’s nearly 500,000 clients worldwide, I thank you for your generous donation. Your contribution will help ensure that FINCA meets its ambitious goals.
FAQs
Rights and Obligations
1. As a Donor, what say does my client have over his Donor-Advised Fund?
The role of a Donor-Advisor is to advise how, when and where charitable distributions are to be made. Donor-Advisors may also advise how the assets of a Donor-Advised Fund are to be invested among the Foundation’s available investment vehicles.
It is important to note that, as a matter of law, contributions to any Donor-Advised Fund are completed gifts and the ultimate decision-making authority resides with the Board of Directors of that organization. The Significance Foundation strives to honor the advice of its Donors at all times except when the advice is contrary to IRS regulations or the Foundation’s policies.
2. What does it mean to advise a distribution?
As required by the IRS, contributions to the Significance Foundation are irrevocable, completed gifts. Upon donating assets to a Donor-Advised Fund, your client relinquishes all interests in and control of the donated cash and property, except the opportunity to advise the Fund. Your clients’ rights include the rights to advise charitable distributions and general investment strategies. In this context, “advise” is synonymous with “recommend” and “suggest.” It is important to note that the applicable laws do not allow Donor-Advisors to have a right to direct the funds of a Donor-Advised Fund in any fashion – effectively, a Donor-Advisor may suggest distributions, but technically cannot demand that they be made. Your clients’ contributions to their Donor-Advised Funds are completed gifts and ultimate decision-making authority concerning investments and distributions is required to rest with the Board of Directors of the Significance Foundation.
3. How long will my clients’ relationships with the Significance Foundation continue?
All Donor-Advised Funds will remain active for generations, as long as there is a balance in the Fund and your client or his designee maintains regular activity. Should your client choose to close his Donor-Advised Fund, the remaining funds in the account must be fully distributed to a qualified Section 501(c)(3) Public Charity or to the unrestricted fund of the Significance Foundation.
4. Can my client create new charitable programs and/or Public Charities and advise that his donations be applied there?
Yes. The Significance Foundation has a track record of success in developing new Section 501(c)(3) Public Charities through the Foundation’s incubation services. Under IRS regulations, there are limitations that may or may not make such gifts allowable. The Significance Foundation works with its Donors to ensure the greatest level of compliant flexibility in such matters.
5. Will funds that my clients contribute ever be gifted to a charity of which they do not approve?
No. As long as the Donor-Advised Fund remains active and the advised distributions are compliant from a regulatory perspective, it is the policy of the Significance Foundation that gifts from Donor-Advised Funds will only be made upon the advice of its Donors or that of their Successor Advisors in the future.
6. When my client dies, does his Donor-Advised Fund become part of his estate?
No. Because contributions to Donor-Advised Funds are completed gifts at the time that they are made to the Significance Foundation, they immediately become the property of the Significance Foundation at that time and will not be a part of your client’s estate.
Your client may ensure that his charitable goals continue to be pursued by naming Successor-Advisors to the fund. Successor-Advisors assume the role of advising gifts and investment strategies for the Fund after your client’s passing.
7. Will my client receive any income from the investments within his Donor-Advised Fund?
No. All earnings from investments of the assets within Donor-Advised Funds are credited to the Fund and increase its charitable giving power. However, federal and state laws prohibit distributing any of the Fund’s income or assets to your client or your client’s family.
8. What happens if new laws regarding Donor-Advised Funds are passed? How will I be notified of the impact on my clients and their Donor-Advised Funds?
The Significance Foundation closely monitors all legislative activity impacting Donor-Advised Funds. Should there be any changes that impact the Donor-Advised Fund format of charitable giving, the Significance Foundation will immediately update its policies and notify its Donors and their Financial Advisors in writing.
9. How does the Significance Foundation stay up to date on legislation and regulations affecting Donor-Advised Funds?
The Significance Foundation retains the services of nationally recognized tax-exempt organization professionals, including Webster, Chamberlain & Bean – the leading law firm in the United States specializing in services to non-profit organizations. Additionally, Significance Foundation staff regularly attends and makes presentations to related professional conferences and seminars.
Getting Started
10. What types of assets can my clients contribute to their Donor-Advised Funds?
Gifts of cash are the most common contributions to a Donor-Advised Fund. However, your client may also donate appreciated assets such as stocks, interests in real estate, IRA assets, life insurance policies, and annuity policies. All substantial gifts other than cash or market-listed and traded securities must have a current appraisal by a qualified professional appraiser and must have the prior consent of the Board of Directors.
11. What are the tax advantages to making contributions to a Donor-Advised Fund?
The Significance Foundation is a Section 501(c)(3) Public Charity and provides the highest levels of deductibility possible.
- Gifts of cash are deductible up to 50% of the Donor’s Adjusted Gross Income (AGI).
- The present fair market value of gifts of non-cash assets are deductible up to 30% of the Donor’s AGI.
12. What should my client name his Donor-Advised Fund?
Donors may recommend any name for their fund that will not be confused with that of any other charitable fund or entity. Your client may want to include his name or the general purpose of the fund – for instance, The John and Jane Jones Fund, The John and Jane Jones Fund for Education, or The Jones Education Fund.
13. How often will my client receive statements relating to his Fund?
Statements of activity are mailed on a quarterly basis. Your clients’ statements will include all contributions to the Fund, distributions from the Fund, and investment activity. Your clients will also receive letters of confirmation after each requested gift is made.
14. How often will I receive statements relating to the Donor-Advised Funds of my clients?
Statements of activity are mailed on a quarterly basis. You will receive concurrent copies of each of your clients’ statements provided that the clients have completed a Permission to Share Information Form.
15. When can my clients make new contributions to their Donor-Advised Funds?
New contributions to a Donor-Advised Fund can be made at any time throughout the year – including up to December 31st. A receipt will be issued outlining the date, amount, and purpose of the gift that your clients can use to substantiate the gifts for tax purposes.
16. How are the funds in my clients’ Donor-Advised Funds invested?
The Significance Foundation offers three independent investment strategies with a range of options. Presently, the Significance Foundation invests in United States Treasury Bills, which provide the greatest level of stability and security, and offers two actively managed stock portfolio options. The Significance Foundation retains the services of two independent investment firms: Miller-Russell & Associates, Inc., and Advanced Equities Financial Corp. Each investment firm practices modern-portfolio theory. Donor-Advisors may recommend an investment strategy at the time a Fund is created and may make changes as solicited by the Foundation annually.
17. What are the annual administrative fees for my clients’ Donor-Advised Funds?
To cover the costs of the administration of each Donor-Advised Fund, the Significance Foundation charges an annual administration fee. The fee schedule is based on the value of liquid assets held on September 30 of each year in each Fund. The schedule assesses 1% of the first $250,000 in assets, ½% of the next $250,000 and ¼% of the next $500,000. No fees are assessed on the value of assets beyond the first $1,000,000 of value. Thus, the maximum annual administrative fee is $5,000. There is minimum assessment of $550 charged to smaller Funds.
Giving
18. How do my clients make a recommendation for a gift from their Donor-Advised Fund?
Your clients may make a Distribution Request the online form. Once completed, the form can be submitted by fax, email or regular mail. Your client may elect to make the gift on a one-time basis or request that the gift be repeated monthly, quarterly or annually.
19. Who can receive a grant from a Donor-Advised Fund?
Grants can be made to domestic Section 501(c)(3) public charities as defined by Section 509(a) of the Code. A searchable list of most approved charitable, religious and educational organizations is available through GuideStar.org.
20. Does the Significance Foundation have a list of approved charities?
No, the Significance Foundation does not attempt to maintain a list of approved charities. However, a highly comprehensive, searchable list of domestic charitable, religious and educational organizations approved by the IRS as Section 501(c)(3) public charities, as defined by Section 509(a), can be accessed through GuideStar.org, although some charities that have tax exemption under a “group determination letter” are not included. In addition, governmental units, churches, and many charitable affiliated units of churches are not included in the Guidestar listings but generally are eligible recipients if their public charity status can be confirmed. If your client has a particular cause in mind but are unsure of exactly which charity will serve his intent, your Significance Foundation Donor-relations specialist can assist you.
21. How long does it take to process a Distribution Requests?
Requests are normally processed within ten business days.
22. How will my client know that his request has been fulfilled?
Upon distribution of the funds, your client will receive a letter of confirmation or, if he prefers, an email notification, that the request has been fulfilled, as well as a copy of the letter that accompanied the gift. In the event that the request cannot be fulfilled, your client will receive a notification letter detailing why the gift could not be made and offering suggestions for alternatives to assist your client in fulfilling his charitable goals.
23. My client prefers that his charitable activities remain anonymous. How can Significance Foundation protect his privacy?
The Significance Foundation is able to protect your client’s privacy and security through anonymous gifting. Privacy helps to reduce unsolicited grant requests and pressure from development professionals. All pre-gift due diligence is executed with your client’s privacy in mind and, at your client’s request, any and all public acknowledgement may be made without reference to him.
24. Is my client limited in the number of Distribution Requests he can make each year?
No. The Significance Foundation allows its Donor-Advisors to make an unlimited number of Distribution Requests each year.
25. Is there a minimum amount for each Distribution Request?
Yes, the minimum Distribution Request is $100.
26. Are there certain Distribution Requests that cannot be fulfilled?
Yes. The IRS will not allow gifts from a Donor-Advised Fund to be used to fulfill a personal pledge, support lobbying or political activities or campaigns, secure charitable event tickets, memberships, etc., or to provide any significant benefit to the Donor or other disqualified persons. Additionally, gifts to organizations that are not recognized as exempt or to organizations based outside the United States normally cannot be made.
27. Can my client advise gifts for charitable events or fund-raisers?
No. Gifts for charitable dinners, memberships or other events requiring tickets or admission are not allowed. Distributions from Donor-Advised Funds must be made for “exclusively” charitable purposes under federal tax law. Any distribution that provides access by a Donor or a person related to the Donor to any personal benefits, such as a dinner, a personal membership, or any other significant personal enjoyment is considered to violate the federal restrictions.
Still have a question? Feel free to contact a Donor Relations Specialist at (888) 488-1288 or contact us today.
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