1. What is a donor-advised fund?
A donor-advised fund is an account owned, controlled and administered by The Associated, but identified with the donor(s) who created it and through which the donor(s) (or any person designated as a “donor advisor”) can recommend grants to charity.
2. How do I establish a donor-advised fund?
With a fully deductible gift of $10,000 or more in cash, securities or other assets, you can create a fund in your name or in the name of a loved one. A simple agreement allows you and those you designate to recommend grants from your fund on your own timetable.
3. Who can be a donor advisor to my fund and does that person have the same privileges as I do?
Donor advisors are limited to the donor, donor’s spouse and direct family members. Unless we are told otherwise, recommendations will be accepted from any named donor advisor to a fund. Donors who create the fund have the right to name successor donor advisors to your fund.
4. How long does a donor advisor serve?
Donor advisors may serve as long as you wish (or until they are incapable of serving).
5. May I have more than one donor advisor? For example, can I name all of my children as donor advisors?
Yes, you can name as many donor advisors as you want, provided they are over 18 years old. However, to prevent confusion, if you name more than three (3) donor advisors to your fund, The Associated may require a single designee to act on behalf of the fund.
6. What happens to my fund when the last donor advisor stops serving?
When there are no remaining donor advisors, the balance in the fund will be made part of The Associated’s unrestricted endowment unless you have designated otherwise.
7. How do I recommend a grant be made from my fund?
Grant recommendations must be submitted in writing or electronically, signed by you or another donor advisor to the fund. The recommendation may be sent by mail, fax, scanned and sent by e-mail, or submitted electronically (you must have a signed electronic recommendation authorization form on file for your electronic submission to be accepted). Someone other than a donor advisor (such as your child or grandchild) may suggest a grant to a charity from your fund, in which case a donor advisor must sign or submit the grant recommendation form. We will be happy to acknowledge that it was your child or grandchild who suggested the grant in the letter to the receiving charity.
All grant recommendations should be sent to:
The Associated: Jewish Community Federation of Baltimore
101 West Mount Royal Avenue | Baltimore, MD 21201
8. To whom may I recommend grants?
You may recommend grants to any public charity (not just Jewish organizations) whose mission does not conflict with that of The Associated. A public charity is a tax-exempt organization recognized by the Internal Revenue Service under IRC §501(c)(3). That includes charities that operate within the United States as well as those that work with charities in foreign countries, such as the American Jewish Joint Distribution Committee and so-called “friends of” organizations. The Associated reserves the right to refuse a recommendation for a grant to a charity whose mission or programs are in conflict with The Associated’s principles (e.g., grants to anti-Semitic groups).
9. Is there a minimum amount for a grant?
Yes, the minimum amount of a distribution from a fund is $100.
10. Are there other restrictions on who may receive grants?
Grants cannot be made to an individual, for any reason. Grants to reimburse any individual for expenses, regardless of the reason, are not allowed. Grants for a scholarship to a specific student are also prohibited. You may use your fund to recommend grants to a public charity for a scholarship program, provided you and your family have little or no control over the scholarship awarding process.
Grants cannot be made to organizations or corporations that are not public charities. Reimbursements to any vendor for expenses related to operating a fund are prohibited. We cannot distribute money to vendors for the purchase of tangible property, even if it will be gifted to a public charity (e.g., a check made payable to a sporting goods store to purchase gym equipment for a school). If you wish to make a gift of tangible property to charity through your fund, please contact us, and we will work with you to find an appropriate way to do this.
11. Can a grant be made to sponsor or purchase tickets for a special function (e.g. gala, golf tournament, bridge tournament, awards dinner, etc.) that supports a charitable organization?
Maybe. We may not approve a recommendation if the grant will provide more than an incidental benefit to you, your family or others who attend the function. Unfortunately the term “incidental benefit” has not been precisely defined by the IRS. Basically, the intent of the law is to prevent you, your family and others from receiving economic benefits in return for the grants made from your fund.
Recommendations for a grant to a charity hosting a special function may be approved if both you and the recipient charity promise no tickets or services will be provided by the charity or accepted by you or someone else.
However, in light of potential penalties under the law, we will not approve a recommendation for a grant to a charity for a special function if a portion of the grant would pay for an economic benefit (e.g., dinner, greens fees, prizes and/or entertainment) to you or others attending the function, even if you offer to pay for the value of the benefit that you receive (i.e., the cost to provide you the dinner, greens fees, prizes or entertainment).
Please Note: An exception in the law to this rule is that grants to synagogues for High Holiday tickets or to other religious institutions for membership are permitted.
12. Can a grant be made to pay membership fees for a charitable organization?
While we may approve grants for membership in synagogues, which may include High Holiday tickets, or other religious institutions, generally we may not approve grants to charitable organizations in exchange for membership benefits. That is because most memberships in charitable organizations (i.e., cultural or educational institutions) offer tangible benefits to you or your family. Examples of prohibited membership benefits include, but are not limited to: free or reduced price admission, if others pay regular rates; special or early access to exhibits or events; and/or other privileges such as gift shop or café discounts and free parking. We may make a grant to support a charity that offers membership if the grant is not made in exchange for membership.
13. May I see a list of charities that have received grants?
Yes. As part of our compliance process, The Associated maintains a List of Approved Organizations, which consists of charities that have received grants and have been vetted to ensure they are public charities.
Please note: The List is for informational purposes only and does not ensure that any recommendation for a grant to a charity on the List will be approved.
14. How long does it take for grant recommendations to be processed?
If the charity is on the List of Approved Organizations, a recommendation will take approximately two (2) weeks to approve and process. If the recommended grantee is new to us, it may take longer
15. What happens if you reject my recommendation?
You will receive a written explanation of why your recommendation was rejected. We will try, where possible, to recommend an alternative organization that could receive a grant.
16. Can I make a recommendation for a grant to pay a pledge that I made to The Associated or to another charity?
No. If the recommended purpose of the grant is to satisfy a legally enforceable personal pledge or obligation, it may not be approved. Since the assets in your fund legally belong to The Associated, we may not use those assets to pay donations you have personally promised to pay. However, to avoid this dilemma, instead of making a pledge, you should tell the asking charity that you will recommend that a grant be made from your fund.
The Associated stickers (see text below) can be affixed to a pledge card for this situation.
THIS IS NOT A PLEDGE. I am pleased, however, to recommend that a grant of $___________ be made from the donor-advised fund that I have established with The Associated Jewish Charities of Baltimore
17. Am I required to recommend a certain amount in grants from my fund?
No. However, The Associated does require that at least 5% of the aggregate total market value of all of its donor-advised funds be distributed to charity each year. If the past is any indication, this requirement will be easily surpassed. In the past several years, the program as a whole has distributed in excess of 10% of the total value of the program each year.
However, in the unlikely event that distributions in any given year do not exceed 5%, then The Associated has the right, but not the obligation, to pull money from all funds, starting with those which have been inactive for more than 24 months.
18. Do I have to make grants every year?
No. However, if no grants have been recommended by the donor advisor(s) for a period of 24 months, a fund may be terminated (at the discretion of The Associated). If the balance of such a dormant fund has been less than $5,000 during that period, then The Associated shall terminate the fund, provided that the donor advisor(s) be notified at least 30 days prior to such termination.
19. Is there a minimum balance that must be maintained by my fund?
Yes. A grant recommendation will not be considered if the Fund value has fallen below $5,000, or if the recommended grant amount would bring the fund balance below $2,000.
20. Are there any fees charged for maintaining my fund?
Yes. The Associated charges an administrative fee to cover its costs of operating and developing all endowments, donor-advised funds, and supporting foundations, including, but not limited to, accounting, tax reporting, grants administration, and other administrative costs and services. The fee is charged in accordance with the following schedule:
Fund balance under $10,000 = $100
Between $10,000 and $1 million =1.00%
Next $4 million = 0.25%
Amount over $5 million = 0.10%
Additional direct costs for custody of the investments and investment consulting services are approximately 0.10%.
21. How do I get up-to-date financial information related to my fund?
You will receive a quarterly financial statement, which includes an investment report and other timely information related to your philanthropy, approximately six (6) weeks after the close of each quarter. You also can call The Center for Funds & Foundations at 410-369-9339 to speak to a professional regarding your fund. For the most recent quarterly investment report, click here.