Frequently Asked Questions about Donor-Advised Funds (DAFs)

Donor-Advised Funds

Is there a minimum fund balance that I must maintain?

Yes. All funds must maintain a minimum balance of $1,000 to remain active.

Can I access my donor-advised fund account online?

Yes. We will provide you with a user ID and password to securely access your foundation online. Your personal information is only accessible to you and United Charitable. If you approve, your advisor can also be granted access to your fund account. If you happen to forget your password, you can reset it online. However, if you forget your user ID, please call us at 571-620-3000 and we will be happy to assist you.

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.
Can my donor-advised fund account be named after someone other than me?

Yes. You can choose any name for your donor-advised fund account. Most donors choose a name that reflects the main purpose of the account such as “The Smith Family Educational Foundation.” Some donors select a name that memorializes a loved one, e.g., “The Jane Williams Cancer Foundation.” Another option is to name the foundation after your philanthropic goal, e.g., “The Thomas Johnson Scholarship Fund.”

Can my donor-advised fund account have multiple successors?

Yes. Your account assets can be split between multiple successor funds. Or, you can have your successors share in the advising responsibilities. Also, your successor advisors can name their own successor advisors. At United Charitable, there are several ways that your donor-advised fund account can exist in perpetuity.

How are the assets in my donor-advised fund account invested?

At United Charitable, we believe that a donor-advised fund is an integral part of your personal financial plan. You are free to work with your financial professional to create a customized, United Charitable-approved investment plan that meets your philanthropic goals.

How much do I need to open a donor-advised fund account?

United Charitable's DAF application fee is $500. We have no minimum donation amount required to open the DAF account. To create an investment account within your DAF, you must make a contribution of $25,000 or more. Once your account is established, you can make subsequent contributions of any amount.

How quickly can I create a donor-advised fund account?

At United Charitable, it takes less than a day. Once you submit a completed donor application, your account is established and ready to receive contributions.

What happens to my donor-advised fund account if there are no successors?

You can designate one or more charitable organizations as account beneficiaries. Or, you can distribute the account's assets to one or more charitable organizations. If you don't select either option, United Charitable can annually distribute 5% of your account's balance to the charitable organizations that have previously received grants. If you have not recommended grants, the donor-advised fund account's entire balance will be transferred to the United Charitable Gives Foundation.

What types of fees are charged to my donor-advised fund account?
Charitable administration fees are charged. These fees cover grantmaking, recordkeeping, annual audits, tax filing, quarterly statements, insurance and various other operating expenses. Please see our DAF Fee Schedule for more information.
Which is better — a donor-advised fund or a private foundation?

A donor-advised fund can effectively function as a family foundation. A donor-advised fund offers much of the flexibility and appeal of a private family foundation without many of the regulations, requirements, and overhead expenses. For a more detailed comparison of a donor-advised fund and a private foundation, please click here.

Who can open a DAF account?

Individuals, families, companies, foundations, and other entities can begin a donor-advised fund account by contributing assets.

How do I establish a donor-advised fund at United Charitable?

To establish a donor-advised fund at United Charitable, a donating individual or organization completes the Application to Begin a Donor-Advised Fund and makes a tax-deductible donation of cash, securities, or other financial instruments. They surrender ownership of anything they put into the foundation, but retain advisory privileges over how their account is invested, and how it distributes money to charities.

What is the meaning of a donor-advised fund?

The Pension Protection Act of 2006 defined a donor-advised fund as a fund or account—

“(i) which is separately identified by reference to contributions of a donor or donors,
“(ii) which is owned and controlled by a sponsoring organization, and
“(iii) with respect to which a donor (or any person appointed or designated by such donor) has, or reasonably expects to have, advisory privileges with respect to the distribution or investment of amounts held in such fund or account by reason of the donor’s status as a donor.”

In short, that means that a donor-advised fund or “foundation” is a charitable giving vehicle administered by a public charity (like United Charitable) created to easily manage charitable donations on behalf of individuals, families, or organizations.

Contributions

At what point is a contribution considered a charitable donation?

A contribution becomes a donation when the asset is “out of the donor’s control.” This is determined by the type of asset you contribute, when and how it is transferred to your United Charitable donor-advised fund account.

Can friends and family members make contributions to my donor-advised fund?

Yes. Anyone can make a tax-deductible contribution to your donor-advised fund account at United Charitable.

Can I contribute assets from my IRA to my donor-advised fund?

You may name your donor-advised fund as the charitable beneficiary of all or part of an IRA. You should consult with your tax advisor or attorney to determine how this affects your tax liability and filing needs.

How often can I make contributions to my donor-advised fund account?

You may contribute any amount at any time. Many donors like to add to their donor-advised fund accounts at the end of the year to maximize their tax savings. Others prefer to make regular contributions and allow the assets to grow for future grantmaking.

Is there a minimum contribution required to open a donor-advised fund account?

United Charitable's DAF application fee is $500 (this is considered a tax-deductible donation). We have no minimum donation amount required to open the DAF account, however the account needs to maintain a balance of $1,000 annually. To create an investment account within your DAF, you must make a contribution of $25,000 or more. Once your account is established, you can make subsequent contributions of any amount. 

What happens to my contribution after it is accepted by United Charitable?

If the funds are less than $25,000, the account is held in cash. Once your fund account reaches $25,000 or more, we invest it, according to your recommendations.

What types of assets can I contribute to my donor-advised fund account?

United Charitable accepts a wide range of assets. These include:

  • Cash 
  • Publicly traded securities including stocks, bonds, mutual foundation shares 
  • Restricted and controlled stock 
  • Privately-held stock 
  • Real estate 
  • LLCs and Family Limited Partnerships 
  • Proceeds from life insurance or from a full-paid policy 
  • Private foundation grants or terminations 
  • Bequests 
  • Named beneficiary of charitable remainder trust 
  • Named beneficiary of an IRA, 401(k), or other retirement account 
  • Tangible personal property

United Charitable strongly encourages you to consult with your tax advisor or attorney before making a charitable contribution. If you have a question about donating an asset not listed here, please call us at 571-620-3003 and we’ll be happy to discuss it with you.

Will I get a receipt for my contributions?

Yes. United Charitable provides you with a written confirmation of your contribution(s). This confirmation serves as a receipt for your taxes. With a donor-advised fund account, you can immediately deduct the full amount of your contribution. Therefore, grants you recommend from your donor-advised fund account are not tax deductible.

Taxes

Can the income accrued in my donor-advised fund account be deducted as an additional charitable donation?
No. Only contributions made to United Charitable are tax deductible. Growth inside your donor-advised fund account is not eligible for an additional deduction.
Do I file my contribution receipt with my taxes at the end of the year?
For any non-cash contribution, you will receive an IRS Form 8283 to file with your tax statement at the end of the year. It is extremely important to review the information on this form since it is your responsibility to submit correct information to the IRS.
Does my tax deduction depend on the type of asset I contribute?
Yes. Here are some general guidelines:
  • Check/wire: Your charitable deduction is the amount of your cash contribution.
  • Publicly-traded securities: If you have owned your donated securities for more than one year, your charitable deduction is the fair market value of those securities, determined by an average of high and low on the date you contribute them.
  • Securities that are not publicly traded: If you have owned your donated securities for more than one year, your charitable deduction is the fair market value of those securities, determined by you in a reasonable manner on the date you contribute them. The IRS may require you to obtain a qualified independent appraisal.
  • Real Estate: For contributions of real estate, your charitable deduction is the fair market value of that real estate, determined by a reasonable manner on the date you contribute it. The IRS may require you to obtain a qualified independent appraisal.
How are capital gains treated for gifts of appreciated securities?
Since United Charitable is a charity, we do not pay capital gains tax when we sell gifted securities. Therefore, you pay no capital gains tax on securities you contribute to your donor-advised fund account.
What are the limitations on charitable deductions?

Under the Internal Revenue Code, deductions for charitable contributions are subject to certain "percentage limitations." That means you can deduct a stated percentage of your adjusted gross income ("AGI") in the year you take the deduction. Contributions in excess of these percentage limitations may be carried forward for additional years.

United Charitable is a 501(c)(3) public charity. Therefore, percentage limitations that apply are the most favorable charitable deductions available. Deductions for contributions of long-term capital gain property—such as appreciated securities held for more than one year—are limited to 30% of AGI. Deductions for all other contributions —including contributions of cash—may be taken up to 50% of AGI. Your ability to take itemized deductions may be subject to certain other limitations. Please contact your tax advisor to evaluate your tax deductibility limits.

Why is the net amount in my donor-advised fund account different from the amount of my charitable deduction?
This difference is due to market fluctuations and liquidation costs. United Charitable asks that you consult your tax advisor to determine your charitable tax deduction.

Grants

Are there any other specific types of grants that United Charitable cannot make?

United Charitable cannot make grants to private non-operating foundations. Also, United Charitable cannot make grants to individuals or to satisfy a pre-existing pledge. Grants cannot be made to political candidates or parties. Grants cannot be used for any personal benefit, such as tuition, dues, membership fees, or any goods purchased at a charitable auction.

Can I create a scholarship program within my donor-advised fund?

Yes, with United Charitable's prior approval. After we review and approve your plan, a donor-advised fund may award a scholarship, fellowship, and other awards based on IRS guidelines. United Charitable will provide assistance in designing such programs.

Can I make an anonymous grant from my donor-advised fund account?
Yes. You may also recommend a grant in someone's honor or memory.
Can I recommend a grant from my donor-advised fund account to any U.S.-based charity or nonprofit organization?

United Charitable can make grants to charitable organizations that are tax-exempt under Internal Revenue Code (IRC) Section 501(c)(3) and public charities under IRS Section 509(a). United Charitable can also make grants to private operating foundations. United Charitable cannot make grants to private non-operating foundations. If you have a special grant request, please contact a member of United Charitable's staff.

Can I recommend a grant from my donor-advised fund account to attend a charity event?

No. The most common reason for denying a grant is a donor's desire to use that grant for table sponsorship or event tickets. When you make your initial contribution to a donor-advised foundation, your contribution is 100% tax deductible because you do not receive any goods or services in exchange for that contribution. Charitable events and galas provide their attendees with benefits that aren't tax deductible — such as food, drinks, entertainment, and/or door prizes. Therefore, grants recommended for these purposes cannot be approved.

Can I recommend grants from my donor-advised fund account to international organizations?

Yes. United Charitable is one of the few donor-advised fund providers that makes international grants. These grants require additional due diligence to determine if the foreign charity is eligible. International grants also require additional monitoring. As a result, United Charitable charges additional fees for these types of grants. These additional fees are charged to your donor-advised fund account when you recommend the grant.

Can I recommend grants to individuals and families facing hardships, emergencies, or medical distress?
Sometimes. A fund at United Charitable may make grants to individuals under certain conditions. United Charitable will first determine that such gifts comply with IRS requirements.
Can I run a program and/or conduct charitable activities within my donor-advised fund at United Charitable, and be reimbursed for expenses?

No. A donor may engage in such activities privately, but may not use donor-advised fund funds to support them. If you are interested in actually conducting a charitable program, please call us at 571-620-3003 to inquire about fiscal sponsorship. We have entirely separate operating rules and regulations governing fiscally sponsored programs.

How many grants can I recommend in a year?
There is no limit to the number of grants you can recommend in a year.
How quickly are my grants processed?

United Charitable's grant requests are processed daily. You can provide us with written requests using our Disbursement Request Form. If you use your secure account login to access your donor-advised fund online, you may recommend a grant to be disbursed immediately.

Is a fee charged for each grant I recommend?

No. United Charitable does not charge a per-grant fee. United Charitable does charge additional fees for international and non-501(c)(3) grants, as well as for grants that are requested with next-day delivery.

What is the minimum amount for an United Charitable grant?
United Charitable's minimum grant is $50.
Will my grant check be printed with the name of my fund on it?

Yes. Your fund will be identified on the top line of the upper left-hand side of the check. The accompanying letter will also recognize the name of your fund. If you choose to make the gift anonymously, your fund name will not be printed on the check or the accompanying letter.