Donor Advised Fund FAQs
- What is a Donor Advised Fund?
- How does it work?
- Are there tax advantages?
- How are the assets managed?
- How does the fund help organizations I am interested in?
- Who receives the investment earnings?
- Can I set up the fund in any name I want?
- How is a Foundation DAF different from other DAFs?
- What are the fees?
- How can I access online information about a fund?
- I’ve got a busy schedule. How will a DAF help me?
- Are these funds only for the rich?
- Should I have my professional advisor talk to you about this?
- How often are grants processed?
- What types of payments are not eligible for grants from the fund?
- What are the grant guidelines?
- Are there any rules requiring me to grant a certain amount from my Donor Advised Fund within a specific timeframe?
What is a Donor Advised Fund?
A Donor Advised Fund (DAF) is a fund you establish and name at the Jewish Community Foundation. You, or anyone you designate, can recommend grants from the fund to your favorite charitable organizations in the general or Jewish community.
How does it work?
Transfer assets of any kind (cash, securities, closely-held stock, businesses, insurance, real estate, among others) into the fund. You recommend the charitable organizations to receive grants on your time schedule. The Foundation processes the grants, maintains the records and provides you with simple receipts and statements for tax reporting purposes.
Are there tax advantages?
Each time you deposit assets into your fund, you may receive an immediate charitable tax deduction for the maximum allowable for gifts to a public charity. For gifts of long-term appreciated property, you may avoid paying capital gains tax.
How are the assets managed?
You may choose one of the Foundation’s five investment pool options. The investment earnings are credited to the DAF, giving you more to contribute to the community. The Foundation’s Investment Committee, which consists of seasoned professionals and investors, oversees the pools with the Foundation’s Investment Consultant, Slocum.
How does the fund help organizations I am interested in?
Your grants reflect your interests and priorities. Since 1967, Foundation DAFs have granted over $1 billion to address Jewish and general needs locally, nationally and abroad.
Who receives the investment earnings?
All investment earnings are credited to the donor advised fund, giving you more to give away to the community.
Can I set up the fund in any name I want?
Yes. You select the name of the fund. Use your own name or another name that is meaningful to you. The fund can also be anonymous.
How is a Foundation DAF different from other DAFs?
Our experience and expertise in Jewish and general community philanthropy makes your philanthropic experience easy, relevant, fulfilling and sustaining. The Foundation staff research organizations that match your areas of concern and evaluate programs and organizations on an ongoing basis.
What are the fees?
The Fund will be charged an annual fee of 1.5% of the Fund balance, payable monthly, to cover the cost of administration, with a minimum annual fee of $300, charged at $25 per month. For higher balances, a sliding fee scale is used. These fees are subject to change at any time by JCF’s Board of Directors.
In addition to the services provided to administer your DAF, the fee supports youth philanthropy initiatives, the Endowment Leadership Institute and Governance Leadership Institute for local Jewish non-profits, the Book of Life and other important community programming. Please log-in to your fund online, through the JCFConnect box on the upper right, for full details.
How can I access online information about a fund?
The Foundation offers 24-hour online access to information about individual Donor Advised Funds through our website. This information is confidential and only available to those who have established a DAF.
I’ve got a busy schedule. How will a DAF help me?
Simplified recordkeeping as well as centralized donation and grant-making reduce your time involved in philanthropy. You can add to your fund and recommend grants from the fund at your convenience, avoiding the year-end pressure of making multiple charitable gifts. You may recommend as many grants as you wish throughout the year.
Are these funds only for the rich?
That is a common misconception. A DAF can be established with as little as $1,800 and there is no minimum balance requirement. The minimum amount for a grant is $100. Sixty percent of the Foundation’s awarded grants are between $100 and $1,000.
Should I have my professional advisor talk to you about this?
Although Foundation DAFs are very easy for donors to handle directly, if you prefer to have us work with your accountant, attorney or other professional advisor, we would be happy to do so.
How often are grants processed?
Grants are processed weekly. Grant recommendations are due by Sunday at midnight with checks to organizations mailed the following Friday.
What types of payments are not eligible for grants from the fund?
The Foundation cannot honor the following recommendations from a donor advised fund:
- Legally Binding Pledges: By law, the Foundation cannot honor legally binding pledges that you have made to an organization since this is considered a personal obligation. The Foundation can honor solicitation requests.
- Tuition: No form of tuition, or the enrollment fees for extracurricular activities, can be paid from the fund.
- Non-deductible Portion of Membership or Tickets: The Foundation can only distribute the charitable portion of memberships and tickets to events from your fund. We will gladly include your personal check for the non-deductible portion with our check and letter sent to the organization.
- Grant Intended for the Benefit of One Named Individual: The Foundation cannot honor recommendations for grants that will benefit one named individual. Grants can be designated for funds being raised by a particular individual for an event.
What are the grant guidelines?
The Jewish Community Foundation of San Diego’s (JCF’s) mission is to promote philanthropy through meaningful partnerships with donors and community organizations in achieving charitable goals; to increase current and future support for a vibrant and secure Jewish and general community in San Diego, Israel and around the world. JCF’s core values include Tzedakah (justice), Dor l’dor (generation to generation), Kavod (respect), Torah (learning) and Derech Eretz (way of the land).
Grants from JCF donor advised funds reflect the diverse interests, priorities and passions of our fund advisors. Acting as a conduit for our donors’ philanthropy, grants from JCF donor advised funds do not necessarily reflect an endorsement of any one particular organization or its views. JCF researches all organizations to ensure their nonprofit tax status is current with the IRS. Donors who have supported an organization within the past 24 months will be advised if that organization’s nonprofit status has been designated as inactive or revoked.
JCF also researches the mission and programs of grantees to verify that the organization’s mission aligns with JCF’s broad charitable guidelines. If it is unclear whether the mission and/or programs align with JCF guidelines, they will be referred to the Endowments and Grants committee for final review.
The JCF does not fund organizations that through their mission or activities:
- engage in active and/or express anti-Semitism, bigotry, violence or terrorist activities;
- actively seek to proselytize Jews away from Judaism; or
- expressly seek the destruction of the State of Israel
Are there any rules requiring me to grant a certain amount from my Donor Advised Fund within a specific timeframe?
Currently, there are no rules, or state or federal regulations, that require donor advised funds to grant a minimum amount during a specific period. However, we are aware of ongoing discussions at both the state and federal levels to impose minimum granting requirements on donor advised fundholders.
- Potential future regulation: One commonly considered potential regulation would hold donor advised funds to the same requirements as private foundations which are required to grant out 5% of their principal annually. Analogously, donor advised fundholders may be required to grant 5% of the average balance in their fund each year or based on an average balance calculated over several years. We do expect any new regulations to provide ample notice to permit donors to plan and implement their grants thoughtfully.
- JCF encourages active granting: At JCF, we actively encourage donors to make grants to support causes that are meaningful to them. JCF provides granting information and opportunities to donors regularly. Staff at JCF are also always available to consult with donors on their grantmaking, to help articulate philanthropic plans and strategies, provide research, and arrange site visits and meetings with potential grantees, etc.
- How to prepare: While there are currently no governmental regulations, JCF will contact you if we see that you have not made a grant in more than one year. After three years, we will make every effort to contact you to encourage you to make a grant; however, if we are unable to reach you, we reserve the right to make a grant on your behalf based on your granting history.
- Long-term impact: If you are building up the balance of your donor advised fund to enable you to make a larger grant for greater impact at some point in the future, we suggest that you invest your donor advised fund assets in one of our longer-term investment pools. These pools are designed to enable you to grant 5% of your assets annually, adjusted for inflation. JCF will work with you on an individual basis to help you both comply with existing and new regulations and meet your short and long-term philanthropic goals.