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FAQs
Find the answer to the most common questions about Donor-Advised Funds and the Significance Foundation. If you don’t see the answer to your question, feel free to call a Donor Relations Specialist at (888) 488-1288.
1. As a Donor, what say do I have over my Donor-Advised Fund?
Your role as a Donor-Advisor is to advise how, when and where charitable distributions are to be made. You may also advise how the assets of your 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, your contributions to the Significance Foundation are irrevocable, completed gifts. Upon donating assets to your Donor-Advised Fund, you relinquish all interests in and control of the donated cash and property, except the opportunity to advise the Fund. Your 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 you to have a right to direct the funds of your Donor-Advised Fund in any fashion – effectively, you may suggest distributions, but you technically cannot demand that they be made. Your contributions to your Donor-Advised Fund 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 relationship with the Significance Foundation continue?
Your Donor-Advised Fund will remain active for generations, as long as there is a balance in your Fund and you or your designee maintain regular activity. Should you choose to close your Donor-Advised Fund, the remaining funds in your 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 I create new charitable programs and/or Public Charities and advise that my 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 I contribute ever be gifted to a charity of which I do not approve?
No. As long as your 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 your Donor-Advised Fund will only be made upon your advice or that of your successor advisors in the future.
6. When I die, does my Donor-Advised Fund become part of my estate?
No. Because your contributions to your Donor-Advised Fund 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 estate.
You may ensure that your 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 your Fund after your passing.
7. Will I receive any income from the investments within my Donor-Advised Fund?
No. All earnings from investments of the assets within your Donor-Advised Fund are credited to the Fund and increase its charitable giving power. However, federal and state laws prohibit distributing any of your Fund’s income or assets to you or your family.
8. What happens if new laws regarding Donor-Advised Funds are passed? How will I be notified of the impact on my Donor-Advised Fund?
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 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.
10. How often will I receive statements relating to my Fund?
Statements of activity are mailed on a quarterly basis. Your statement will include all contributions to your Fund, distributions from your Fund, and investment activity. You will also receive letters of confirmation after each requested gift is made.
11. How are the funds in my Donor-Advised Fund 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. Donors and Donor-Advisors may recommend an investment strategy at the time a Fund is created and may make changes as solicited by the Foundation annually.
12. What are the annual administrative fees for my Donor-Advised Fund?
To cover the costs of the administration of your 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
13. How do I make a recommendation for a gift from my Donor-Advised Fund?
You may make a Distribution Request using a downloadable form. Once completed, the form can be submitted by fax, email or regular mail. You may elect to make the gift on a one-time basis or request that the gift be repeated monthly, quarterly or annually.
14. Who can receive a grant from my 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.
15. 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 you have a particular cause in mind but are unsure of exactly which charity will serve your intent, your Significance Foundation Donor-relations specialist can assist you.
16. How long does it take to process my Distribution Requests?
Requests are normally processed within ten business days.
17. How will I know that my request has been fulfilled?
Upon distribution of the funds, you will receive a confirmation or, if you prefer, 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 your request cannot be fulfilled, you will receive a notification letter detailing why the gift could not be made and offering suggestions for alternatives to assist you in fulfilling your charitable goals.
18. I prefer that my charitable activities remain anonymous. How can Significance Foundation protect my privacy?
The Significance Foundation is able to protect your 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 privacy in mind and, at your request, any and all public acknowledgement may be made without reference to you.
19. Is there a minimum amount for each Distribution Request?
Yes, the minimum Distribution Request is $100.
20. 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.
21. Can I 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 online.
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