A donor-advised fund is a charitable giving vehicle sponsored by a public charity, such as Fiduciary Trust Charitable. The donor generally receives an immediate income tax deduction for contributions to the fund and can recommend that grants be made from the account to IRS-qualified charities at any time. Contributions to the donor-advised fund can be made in the current and future years, and grants can be made from the fund to qualified charities in the current and future years. The fund can generally be invested in a manner consistent with the donor’s philanthropic goals and investment preferences, provided they are aligned with the sponsoring charity’s policies. Once the donor gifts assets to the fund, the donor no longer has legal control of them.
Fiduciary Trust Company (FTC) manages donor-advised funds sponsored by Fiduciary Trust Charitable (FT Charitable), an independent 501(c)(3) public charity. FTC provides investment and administrative services for FT Charitable’s donor-advised funds, which are referred to as “Charitable Gift Funds.”
Our goal in working with donors is to enable them to best achieve their charitable giving objectives, including minimizing taxes, maximizing the value of the assets available for charitable grants, and, in some cases, engaging other generations of family members. We accomplish this through our four-step process:
- Identify Your Priorities: A Fiduciary Trust Company officer will work with you to understand your philanthropic and other goals, as well as your investment preferences.
- Create a Charitable Plan: Based on your needs and preferences, and our investment, and tax, estate, and philanthropic planning expertise, we’ll assess your charitable giving options, including determining whether the Charitable Gift Fund (CGF) is the best vehicle for you. Assuming the CGF is appropriate, we’ll establish a specific charitable plan for the fund. As part of this phase, you will also designate “Charitable Advisors,” which can be yourself, family members, or others, who can make grant and investment recommendations.
- Implement: Once the CGF is funded, your Fiduciary Trust Company officer will manage the investment portfolio, and we will validate that Charitable Advisor(s)’ grant recommendations meet IRS and FT Charitable requirements. Then we will distribute funds to the appropriate charities, considering how the Charitable Advisor(s) would like the gifts to be acknowledged.
- Engage and Review: We will engage you and the Charitable Advisors on a regular basis to keep you updated on the account performance and balance. We’ll also continuously monitor the markets and investment performance and make periodic adjustments as needed.
Benefits of Our Donor-Advised Fund Program
Philanthropic initiatives can be accomplished through several channels, so why choose an FT Charitable donor-advised fund with Fiduciary Trust Company (FTC) as the advisor? Key benefits include:
- Immediate income tax deduction for contributions, subject to IRS limits
- No capital gains tax on appreciated securities donated to the charitable gift fund if they’ve been held for more than one year
- No tax on income or capital gains on investments in the fund
Tailored Investment Approach
- Tailored investment strategy considers donor preferences and fund objectives
- Investment strategy leverages FTC’s expertise
- Investments are selected from a broad universe of investment options
Flexibility and Convenience
- Contributions can be made to a specific donor-advised fund at any time, by anyone, including individuals, trusts and private foundations
- The donor can designate “charitable advisors” to request current or future grants, including beyond the donor’s lifetime
- The donor or their charitable advisor(s) can request a grant to any IRS-qualified public charity at any time
- Grants may be anonymous, if the donor desires, or given in the fund name the donor requests
Personal Service and Philanthropic Guidance
- Relationships are managed by the same FTC officer as a client’s FTC accounts
- Support and guidance is provided by the officer in establishing charitable giving objectives and timeline (although we do not recommend or formally evaluate specific charities)
- By designating family members as charitable advisors, the family can come together on a long-term basis to make charitable grant recommendations, instilling values and strengthening family bonds. FTC can support this through organizing periodic meetings to discuss recommendations and progress.
- Typically significantly lower cost than establishing a private foundation
- FTC and FT Charitable have some of the most competitive fees in the industry
Note: For the standard program, a $250,000 minimum deposit is required to open a Charitable Gift Fund; The Charitable Supporters program has a $50,000 minimum deposit to open a Charitable Gift Fund, with more standardized investment options and basic philanthropic guidance. There is no minimum balance required to maintain an account.
The content on this page is as of the date published and subject to change at any time. Nothing contained herein is intended to constitute investment, legal, tax or accounting advice, and clients should discuss any proposed arrangement or transaction with their investment, legal or tax advisers.