Contributions to Donor-Advised Funds
Contributions to donor-advised funds at the Community Foundation are gifts to a public charity and eligible for the maximum tax deduction allowed by law. The Community Foundation accepts gifts of cash, publicly traded securities, private business interests (closely held stock, limited liability company interests, limited partnership interests), and real estate. Contributions are subject to the review and approval by the Community Foundation prior to acceptance and are irrevocable once accepted. The Community Foundation does not provide legal, tax or financial advice, so the Community Foundation encourages donors to consult with their own professional advisors prior to making a contribution.
Contributions of Non-Cash Assets
The general policy of the Community Foundation is to sell all contributed property as soon as practical after receipt to minimize market risk. For non-publicly traded securities or other assets for which no readily liquid market exists, the Community Foundation will exercise discretion as to the timing and price of sales. Any costs incurred by the Community Foundation necessary for the disposition of securities and other assets and for the management of such assets prior to disposition will be an expense of the donor-advised fund. Should sufficient liquidity not be available in the donor-advised fund to cover any expenses, taxes or liabilities due as a result of the fund’s ownership of a non-cash asset, the donor of such asset(s) agrees to contribute additional liquid assets to the donor-advised fund as necessary to fully and timely cover such obligations.
Grants from Donor-Advised Funds
Through a donor-advised fund, Fund Advisors can enjoy supporting any 501(c)(3) public charity in the United States, including governmental, educational and religious institutions. Fund Advisors may suggest grants directly to international organizations for an additional fee that covers the additional due diligence required of international grants. The IRS does not allow the Community Foundation to make distributions to private non-operating foundations, to individuals or to pay fundraising expenses. Rest assured that the Community Foundation will exercise due diligence to make sure grants from donor-advised funds are given to organizations that have met IRS requirements.
Additional information about specific granting guidelines can be found at growyourgiving.org/grant-guidelines.
Because contributions to donor-advised funds are eligible for a charitable tax deduction, grants subsequently made from
donor-advised funds are not tax deductible.
Fund Activity and Fund Statements
The Community Foundation is responsible for ensuring donor-advised funds are used for charitable grantmaking and do not confer any private benefit on the donor or any other person. The Community Foundation monitors the use of donor-advised funds to ensure their activity leads to charitable distributions. The Community Foundation does not have a minimum amount for grants or maximum frequency of grants. Fund Advisors can suggest grants in any amount and as often as they like. The Community Foundation periodically checks in on donor-advised funds that are not being used to ensure the Community Foundation understands Fund Advisors’ plans for their funds. Fund statements showing gift, grant and investment activity for a donor-advised fund are available through the online donor portal.
Role of Fund Advisors for Donor-Advised Funds
Fund Advisors are adult individuals initially designated by the Founder(s). They have online access to fund information and advisory privileges regarding all fund-related matters, except for those that pertain to Founder limitations. Fund Advisors may make recommendations for grants, investments and other donor-advised fund related matters, which include adding or removing Fund Advisors, Authorized Parties and Successor Advisors; changing the fund name or approval requirement for fund-related matters; adding or removing a named charity to receive distributions in the future; or changing the distribution percentages for the named charities. Fund Advisors act independently unless specified otherwise in the fund’s agreement or other fund documentation. If majority action is required and only two Fund Advisors are serving, they must act by unanimous consent. The Community Foundation is happy to work with generations of Fund Advisors.
Role of a Successor Advisor for Donor-Advised Funds
Successor Advisors are individuals who advise the donor-advised fund when Fund Advisors are no longer willing or able to do so. Successor Advisors do not access fund information and cannot exercise advisory privileges until the fund transitions, and they begin serving in the Fund Advisor role.
Role of a Founder for Donor-Advised Funds
A Founder is an individual or entity that establishes a donor-advised fund. Founders have online access to fund information and have the ability to add, modify or remove Founder limitations for the donor-advised fund, such as a spending policy or defined charitable focus for the fund. However, these limitations are uncommon for donor-advised funds. Any Founder limitation must be agreed upon by all living and able Founders and is subject to review and approval by the Community Foundation.
Role of an Authorized Party for Donor-Advised Funds
An Authorized Party is an individual who has online access to fund information but generally has no advisory privileges for the donor-advised fund unless given permission. A Fund Advisor can add or remove an Authorized Party and give them permission to communicate grant requests and/or make investment changes on behalf of the Fund Advisors. An Authorized Party’s relationship to a Fund Advisor is typically: a professional advisor (a financial advisor who is not currently managing the assets in the fund, an attorney, an accountant, etc.), an administrative assistant, a family member or friend.
Role of an Investment Manager for Donor-Advised Funds
An Investment Manager is an investment professional who manages the investment of assets in a donor-advised fund’s Financial Advisor Managed Account. An Investment Manager has online access to fund information but has no advisory privileges, unless given permission to communicate grants on behalf of the Fund Advisors. In accordance with IRS rules, an Investment Manager cannot be (i) a donor to the Fund, (ii) a Fund Advisor, (iii) a Successor Advisor, (iv) a family member of a donor, Fund Advisor or Successor Advisor (defined as that person’s spouse, ancestors, children, grandchildren, great-grandchildren, siblings and the spouses of children, grandchildren, great-grandchildren, siblings) and (v) any entity where more than 35% of the entity is owned/controlled by any of these persons.
Naming a Donor-Advised Fund
While most funds elect to use their name or a family name followed by “fund,” “foundation” or “giving account” when naming their donor-advised fund, you are not required to include an individual’s name. Some funds use an inspirational phrase in the fund name instead. The fund name must include a descriptor, like fund or foundation, to clearly show the grant is not coming from a personal account or trust. Fund Advisors can change the name of the fund at any point.
Investment of a Donor-Advised Fund
A Fund Advisor (or Authorized Party with permission to change investments on behalf of the Fund Advisors) may recommend that a donor-advised fund be invested separately in a Financial Advisor Managed Account on the Investment Manager’s platform or in the Community Foundation’s investment pools. If the Community Foundation does not receive an investment recommendation for a fund, assets will be held in the Community Foundation’s Money Market Pool.
Confidentiality and Privacy Policy
The Community Foundation holds all information concerning funds in strict confidence. The Community Foundation will only release information with the Fund Advisor(s)’ permission, or if a government agency or court has the legal authority to request the information. All personal data collected on this form is subject to the Community Foundation’s privacy policy, which can be found at growyourgiving.org/privacy-policy.
Bequests and Beneficiary Designations
The Community Foundation can carry out donors’ charitable goals beyond their lifetimes. To name a donor-advised fund at the Community Foundation as a beneficiary of a will, trust, life insurance policy or retirement plan account, the following language may be helpful in completing estate planning documents or beneficiary designation forms: After describing what the donor wants to leave to their fund (i.e., a percentage of the estate/trust/account or a specific dollar amount), please note that it will pass “to the Greater Kansas City Community Foundation (EIN 43-1152398) for the following component fund: [name of the fund].”
Fundraising
The Community Foundation cannot sponsor or reimburse expenses for any fundraising activities or any other events intended to benefit any donor-advised fund, and will not be responsible for the collection of any amounts from any benefit, ball, banquet, athletic event or third-party online fundraising page. The Community Foundation will only be responsible for the proper disbursement of funds actually received. Any advertising, promotional or other materials must be consistent with this policy.
Additional information about fundraising can be found at growyourgiving.org/fundraising-guidelines
Honoring Donor Intent/Variance Power
The Community Foundation carries out a donor’s charitable intent through a donor-advised fund. In rare circumstances, the Community Foundation may determine that the donor’s charitable purposes may have become unnecessary, obsolete, incapable of fulfillment, impractical or inconsistent with the community’s charitable needs. In that case, the Community Foundation may need to exercise its variance power to change the charitable purpose of the fund. In doing so, the Community Foundation will strive to make distributions that are consistent with the donor’s charitable interests.
Additional Detail on These Policies
Please see the Procedures for the Establishment and Operation of Funds and relevant sections of the Bylaws of the Greater Kansas City Community Foundation, available at growyourgiving.org/procedures.
