What is the American Gift Fund?
The American Gift Fund (AGF) is an independent 501(c)3 public charity sponsoring a donor advised fund program. Donors make irrevocable charitable contributions to AGF while maintaining the right to recommend grants to qualified organizations. AGF was founded by the predecessors of RBC Trust Company (Delaware) Ltd. (RBCT) in 1998 and is governed by an independent Board of Directors. RBCT serves as Trustee and provides certain administrative and investment management services pursuant to a written agreement. RBCT is a wholly owned subsidiary of City National Bank, an RBC Company. RBCT utilizes the investment management and other services of various providers, including RBC Wealth Management, City National Bank, and City National Rochdale, affiliates of RBCT. Additional information may be found at: www.giftfund.org
What is a donor-advised fund?
A donor-advised fund (DAF) is a simple and tax-efficient charitable giving vehicle. DAFs allow donors to contribute cash, securities, or other assets which may be eligible for an immediate tax deduction, then recommend grants to other eligible charities over time. Internal Revenue Code 4966(d) (2) defines a “donor-advised fund” as:
- A fund or account owned and controlled by a sponsoring organization [AGF],
- Which is separately identified by reference to contributions of the donor or donors, and
- Where the donor (or a person appointed or designated by the donor) has or reasonably expects to have advisory privileges over the distribution or investments of the assets. All three prongs of the definition must be met in order for a fund or account to be treated as a donor-advised fund.
How does a donor advised fund help me continue my legacy of giving?
The American Gift Fund offers multiple ways to help support a legacy of giving. A donor has the opportunity to designate individuals as Successor Donor Advisor(s) (SDA) or to recommend specific charities to receive future grants. A SDA is nominated to act as Donor Advisor (DA) once all current DA(s) either decide not to serve or are otherwise unable to serve due to incapacity, disability, or death.
Is there a minimum account balance I must maintain?
American Gift Fund accounts must maintain a minimum of $500.00.
What are your fees?
The fee structure consists of two parts: charitable administration and investment management.
- Charitable Administration: covers general operating expenses including grant processing, technology (AGF website, Donor Grant Portal), accounting and legal, recordkeeping, office, and employees.
- Investment Management: Investment advisory fee.
For AGF’s current fee schedule please visit www.giftfund.org. Select ‘Set up a Donor Advised Fund’, select ‘Disclosures’.
If your DAF is currently being managed by RBC WM, please read the below to gain more insight about your statement.
AGF statements reflect two accounts – 1) Shadow account 2) Cash account. The shadow account is a list of transactions that is sent to AGF by data aggregation and mirrors the RBC WM account. The cash account is utilized for cash distributions to charities and payment of fees to RBC Trust.
Any time there is a charity distribution or AGF fee, etc., the transaction is debited from the Shadow account, and then credited to the Cash account and then it is either distributed to a charity or fees are paid to RBC Trust. The total on the summary page for withdrawals is for both accounts.
Where can I find my 1099?
Donor(s) do not receive a 1099, they only need their tax substitution letter which can be found on the grant portal under the ‘My Documents’ tab, starting with the naming convention ‘CL’.
How do I open an account?
To open an account, visit www.giftfund.org. Select the tab, ‘Set up a Donor Advised Fund.’
- ‘Establish a DAF online’ is an online application.
- ‘Establish a DAF-PDF form’ is a document that can be downloaded, populated, and returned to email@example.com for processing.
Can I submit an application online?
Yes, visit www.giftfund.org and select ‘Set up a Donor Advised Fund / Establish a DAF Online.’
How quickly do I need to fund my new account?
Accounts should be funded within 60 days. If you need additional time to fund the account, please email firstname.lastname@example.org.
Can I contribute directly from my IRA to satisfy my Required Minimum Distribution (RMD) or donate my Qualified Charitable Distribution (QCD)?
A DAF may be named as the beneficiary of an IRA and receive assets from an IRA at the death of the IRA owner. A DAF is not permitted to receive assets from an IRA as part of a Qualified Charitable Distribution (QCD) during the lifetime of the IRA owner.
Currently, QCDs (Qualified Charitable Distribution) cannot be made to donor-advised fund sponsors, private foundations nor supporting organizations, though these are categorized as charities. Donors should check with their tax advisor before making a gift to ensure the organization is qualified to accept QCDs.
Where can I find my contribution letter (tax substantiation letter)?
Log on to www.giftfund.org and select the ‘My Documents’ tab. Contribution Letters start with CL. (Example: CL_2022_04_22)
How do you calculate the value of contributions made to a DAF?
Current IRS regulations dictate how contributions of various assets are determined for tax deductibility purposes. More information can be found within IRS Publication 561 (www.irs.gov/publications/p561).
For example: Fair Market Value for publicly traded securities within an active market is determined by multiplying the number of shares contributed by the average of the high and low prices for the day on which the shares are received by American Gift Fund. This is the figure that is used for tax-deduction purposes.
American Gift Fund follows IRS substantiation and disclosure requirements on issued contribution letters per IRS Publication 1771.
Who can be appointed as a Successor Donor Advisor (SDA) on a DAF?
Any individual that is 18 years or older. Children under the age of 18 may be named as SDA during the DAF establishment process, but my not actually be appointed into such role until they reach the age of 18. DAFs may have up to two SDAs appointed; however, current Donor Advisors may change SDAs at any time as requested. Reminder, a Donor Advisor cannot appoint their Financial Advisor managing the DAF to also be their SDA.
How can I update the Successors Donor Advisor(s) on an account?
Log on to the ‘Donor-Advised Grant Portal’ at www.giftfund.org and select ‘My Donor Advised Fund’, select ‘Update My Succession Plan’.
Can my Accountant/CPA have access to the American Gift Fund account?
Normally the accountant/CPA will need a copy of the contribution letter, also known as a substantiation letter, a copy of which is located on the portal within the ‘My Documents’ tab. Donor Advisors, Financial Advisors and Client Associates can easily download and forward a copy to your tax advisor.
- How do I make grant recommendations once my account is funded?
Is there a minimum grant recommendation amount?
Yes, the minimum grant recommendation amount is $250.00.
What organizations qualify for grant recommendations?
The American Gift Fund is a cause-neutral organization and can generally issue grants to organizations that are eligible to receive charitable contributions as a public charity described in Internal Revenue Code sec. 509(a), a private operating foundation described in IRC. 4942(j), or one classified with the same deductibility limitations as defined by the Internal Revenue Code.
How do I check to see if an organization qualifies for a grant?
To verify if a charity qualifies, click the below link to the IRS Website and search for the organization by Organization Name or Employer Identification Number (EIN).
Click on the Organization Name to open the Publication 78 Data. If the ‘Deductibility Code’ equals PC, POF, SO, SONFI or SOUNK, then the organization is a 501(c)3 qualified organization and should qualify for a grant from an American Gift Fund account.
Can I specify the purpose of my grant?
Yes, in addition to choosing the recipient charity, donor advisors may also recommend a specific purpose to allocate the donated funds. While there are some purposes that are not permissible, common allowable purposes that can be selected during the grant recommendation process include but are not limited to: general (unrestricted), in memory of, in honor of, and specific program or department.
Can I recommend a grant in honor of someone?
Yes, a grant recommendation is a terrific way to honor or memorialize someone. When submitting your grant recommendation, select ‘In Memory of’ or ‘In Honor of’ from the drop-down menu in the ‘Purpose of Grant’ field. Once you make a selection, you will be able to add a special note with the information of the individual you are honoring or memorializing.
Can I support fundraising efforts of those participating in a walk/run/bike ride with my donor advised fund?
Yes, under certain conditions you can support these types of fundraising efforts. Please note when submitting your grant recommendation, you will need to select ‘Other’ for the grant purpose and type ‘race’ or, ‘run’, or ‘walk’ in the pop-up box and enter the participant’s name and other relevant information such as race name and number (i.e., Bike to the Bay-Participant – Jane Doe #123456).
To help expedite processing, you may further specify within the ‘Special Instructions’ section that "the grant is not connected to a legally enforceable pledge or financial obligation and that you will not be receiving directly or indirectly, a more than incidental benefit."
Can I use my donor advised fund to pay an invoice?
As this would not be considered a charitable purpose, Donor Advised Funds may not be used to specifically satisfy or pay invoices. IRS Section 4967 imposes an excise tax on the advice that a person described in § 4967(d) provides regarding a distribution from a DAF that results in such person, or any other person described in § 4967(d) receiving, directly or indirectly, a more than incidental benefit.
Can I recommend a grant for a charitable gala or fundraising event?
You may recommend a grant for general support/recognition for the event; however, grants intended to pay any portion of the cost of attendance to a charitable event(s) cannot be made from a Donor Advised Fund (DAF). This includes bifurcated or “split” gifts* where a donor pays for the non-tax-deductible portion of the admission fee out of pocket, and then recommends the tax-deductible portion from their Giving Account.
The full admission fee the charity requires in connection with attendance to the event, including the tax deductible and non-tax-deductible portions, must be paid out of pocket and separate from any DAF grants. If a donor has paid the full admission fee to attend and also intends to recommend a grant beyond the expense of admission and they will not be receiving goods, services or any other directly or indirect more than incidental benefits, donors may recommend a grant in the following manner:
Log in to the ‘Donor-Advised Grant Portal’ at www.giftfund.org, select ‘Make a Grant’. Within the ‘Purpose of Grant’ select ‘Other’. A pop-up box will appear where you can populate the name of the gala or event. Then, within the ‘Comments or instructions for this grant’ section enter the following: “This is an unrestricted donation to the organization where no benefits are being received in return.”
If you are not attending the event, please indicate this by stating in the comments section, “This is an unrestricted donation to the organization where no benefits are being received in return as I [your name(s)] will not be in attendance of this event.”
*For more information regarding bifurcated payments for tickets or event attendance from donor-advised funds, see IRS Notice 2017-73.
Can I support a political party?
Current IRS regulations do not allow grants for lobbying, political contributions, or political campaign activities from Donor Advised Funds.
Can I support a pledge?
Current IRS regulations do not allow Donor Advised Funds to satisfy legally binding pledges.
*For more information regarding pledges/commitments from donor-advised funds, see IRS Notice 2017-73.
Can I recommend a grant to support a tuition payment or scholarship?
Current IRS regulations do not allow Donor Advised Funds to satisfy tuition payments of a specific individual(s) chosen by the donor(s) or related third party. This includes, but is not limited to, grants for school tuition and other required fees, such as enrollment fees and deposits, fundraising obligations where the school considers the payment a non-deductible tuition payment.
You may recommend a grant for the purpose of supporting a scholarship program established at and administered by a qualified public charity, so long as, the recipient of the scholarship is not related to the recommending donor and does not satisfy a financial obligation of the recommending donor(s) or related third parties.
*See IRS Notice 2017-73 for additional information.
Can I recommend a grant to cover the cost of membership to a charitable organization?
You may recommend a grant for this purpose as long as the organization confirms that its membership fee is 100% tax-deductible and that membership benefits do not incur more than an incidental benefit.
*See IRS Notice 2017-73 for additional information.
Can I recommend a grant to an individual?
Current IRS regulations do not permit grants to be disbursed to individuals as they would cause more than an incidental benefit and may result in excise tax.
Will you disclose the identities of all donor advisors to the receiving charity?
Yes, we identify all the donor advisors in the grant letter to the receiving charity unless anonymity is requested in the grant recommendation. Anonymity may be selected for each grant recommendation and is requested by selecting the field ‘Please check here if you do not wish your identity to be disclosed to the charity’ during the grant recommendation process. By choosing to not disclose your identity to the receiving charity, none of the donor advisors will be identified in the grant letter.
Are there required distributions to public charities within a specified timeline?
DAF account balances do not need to be distributed within a specified timeline.
Is there a fee per grant recommendation?
The American Gift Fund does not charge a fee per grant recommendation.
Is there a limit to the number of grant recommendations I can submit during the year?
You are welcome to submit recommendations at your convenience throughout the year. Individual recommendations must meet the minimum of $250.00 and your account balance must stay above the minimum of $500.00.
Can I set up a recurring grant if I want to give to the same charity regularly?
Yes, if you plan to give to a charity regularly, when you submit your first grant recommendation to the charity you can select the frequency of the grant. You can also choose how many times you would like the grant disbursed or choose to have it disbursed continuously. You can stop recurring grants recommendations at any time by contacting the AGF team. The charity must maintain eligibility to receive grant donations on all disbursements.
If I establish a DAF in December, how soon can I submit grant recommendations?
Accounts opened in December will be able to submit grant recommendations beginning January 15th of the following year.
How do I check the status of my grant recommendation?
Log on to the ‘Donor-Advised Grant Portal’ at www.giftfund.org and select the ‘Grant History’ tab. You will see a status for each grant submitted.
Where can I view the grant letters that accompany the donation checks?
Log on to the ‘Donor-Advised Grant Portal’ at www.giftfund.org and select the ‘My Documents’ tab. You may view and download a copy of your grant letter(s) at any time. The most recent grant letters sent to organizations will be found at the top of this page.
Can you send a copy of the grant letter to a third party?
Once the check is mailed, a copy of the grant letter will be available on the ‘My Documents’ tab for you to easily download. You are welcome to download and forward a copy to a third party.
Are the grant recommendations I submit tax deductible?
Contributions made to the American Gift Fund may qualify for an immediate tax deduction. However, submitting grant recommendation(s) do not qualify for any additional tax deduction benefits.
THE INFORMATION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT INTENDED TO PROVIDE SPECIFIC FINANCIAL, INVESTMENT, TAX, LEGAL, ACCOUNTING OR OTHER ADVICE FOR YOU, AND SHOULD NOT BE RELIED UPON IN THAT REGARD. YOU SHOULD NOT ACT OR RELY ON THE INFORMATION WITHOUT SEEKING THE ADVICE OF A PROFESSIONAL. YOUR ADVISOR CAN HELP TO ENSURE THAT YOUR OWN CIRCUMSTANCES HAVE BEEN PROPERLY CONSIDERED AND THAT ACTION IS TAKEN ON THE LATEST AVAILABLE INFORMATION.