Giving That Grows. Legacies That Last.

Transcription

1 Giving That Grows. Legacies That Last. Donor Advised Fund Program Description & Appication

2 We make a iving by what we get, we make a ife by what we give. Winston Churchi

3 The Sharing of Vaues: What is Your Legacy? There are many paths to charitabe giving. Each individua and famiy must seect the course that seems best for their particuar needs. In recent years, donor advised funds (DAFs) have grown to be the most popuar charitabe giving vehice in the U.S, having been proven as a simpe, practica and tax effective means for donors to achieve their charitabe wishes. American Endowment Foundation (AEF), the nation s eading independent non-profit sponsoring organization of donor advised funds, was founded in 1993 by Phi Tobin and Tom Tobin. Since its inception, AEF has been dedicated to fostering the growth of charitabe giving by making it more attractive and enjoyabe for donors to give through an independent donor advised fund program. AEF s vision and mission in the service of each of our donors is to be a trusted eader, a vaued resource and a respectfu partner in their goas for charitabe good. What is a Donor Advised Fund? A donor advised fund is a charitabe investment account that provides a simpe, fexibe and efficient way to manage your charitabe giving. You and your famiy can enjoy immediate and maximum tax advantages, make grants on a fexibe time tabe, buid your charitabe egacy, and increase your phianthropic funds for grant making

4 AEF s Unique Independence American Endowment Foundation is distinguished from most other sponsors of donor advised funds by the fact that we are whoy independent. We offer a neutra patform for investment fexibiity and grant making, as we as administrative expertise geared to personaized charitabe management. Note that: AEF is not affiiated with any financia institution, brokerage firm, mutua fund company or other charity. AEF accrues no benefits from brokerage services, commissions, finder fees, or product saes. AEF does not se financia products or services. AEF does not provide financia, tax or ega advice. Offering More Freedom and Fexibiity AEF makes grants to recipient charities across the country and the word, offering donors the most fexibiity when seecting causes to support.* Many other donor advised fund sponsors pace imits on what kinds of assets donors can contribute or imit donor grants to a specific range of recipient organizations or geographic ocations. AEF offers maximum fexibiity in the types of assets donors can contribute, the investment decisions donors and their advisors desire, and the range of charities donors can support. AEF traditionay reies upon participation and investment recommendations of your financia advisor(s) with regard to investments in your AEF Donor Advised Fund. Many donors find that their AEF DAF integrates we with other financia panning strategies, such as beneficiary of a testamentary gift, ife insurance or quaified retirement pan; as remainderman of a charitabe remainder trust; or as income beneficiary of a charitabe ead trust. *Pease note that some grants to charities based overseas may require that an AEF partner organization engage in equivaency determination which may resut in additiona fees

5 Donor Advised Fund Program Description Purpose The foowing sections describe poicies, rues and reguations of an American Endowment Foundation Donor Advised Fund. An appication is aso incuded. Pubic Charity Status American Endowment Foundation (AEF) is cassified as a 501(c)(3) pubic charity under the Interna Revenue Code. As such, contributions to AEF offer immediate and maximum tax benefits. In this word it is not what we take up, but what we give up, that makes us rich. Henry Ward Beecher Eigibe Donors AEF accepts contributions from individuas, famiies, companies, pubic charities, estates, trusts, and private foundations. A donor advised fund is not intended as a too for fundraising. Contribution Acceptance Information The minimum initia contribution is $10,000. Additiona contributions of at east $1,000 may be made at any time. Acceptabe asset types incude traditiona, compex, and aternative assets such as: Cash Marketabe securities Life insurance poicies Cosey hed stock Rea estate (not subject to a mortgage) Note that IRS requires donors to obtain, at their own expense, an independent quaified appraisa of contributed assets other than cash or marketabe securities. Before accepting a contribution, AEF reviews each asset, and may ask for additiona information. Assets that carry unusua potentia iabiity may be rejected. Any donor who has questions about the acceptabiity of an intended contribution shoud contact AEF prior to arranging for transfer of the assets. Upon receipt and acceptance of a contribution, AEF sends the donor an acknowedgement etter containing a the information necessary to document the contribution for tax purposes

6 Fund Maintenance An AEF Donor Advised Fund is subject to a $5,000 minimum baance. If the baance fas beow $5,000, the donor may be asked to arrange a contribution to restore the baance to the minimum, or recommend a iquidating grant to cose out the fund. Naming the Fund Most donors name their AEF Donor Advised Fund after themseves or famiy members, for exampe: The John and Jennifer Smith Fund, or The Jones Famiy Charitabe Fund. Others name their funds for a purpose, such as: The Hometown Chidren s Heath Fund. Donor-Advisor Each AEF Donor Advised Fund must have at east one person serving as initia donor of the fund (for married donors, typicay both spouses are identified). In situations where the origina donor envisions an advisory committee, a spokesperson for the committee shoud be identified. The donor is entited to advise AEF concerning certain aspects of the fund. These incude: Submitting grant recommendations Fund investments Liquidation strategies Naming a Successor Advisor, or seecting another disposition pan Succession/Fund Disposition Pan The donor may specify a disposition pan for their AEF Donor Advised Fund. The death of the initia donor, or another event if so specified, triggers the enactment of the fund s disposition pan. Many donors choose a disposition pan that aows the fund to continue, by either naming a Successor Advisor of the fund, or naming charitabe organizations to receive annua distributions from the fund. Another option is to terminate the fund, and name charitabe organizations that wi receive iquidated distributions. Others choose to submit a more customized disposition pan. Donors shoud discuss compicated disposition pans with AEF to avoid confusion or potentia probems

7 Investments AEF s investment objective is the prudent management of assets to provide a ong-term tota rate of return that maintains and even enhances AEF donors grant making power. In recognition that donors share this objective, AEF s investment poicy is fexibe to accommodate a variety of donor strategies, perspectives and grant making objectives. The donor may recommend a financia professiona to work with AEF in investing the assets of his or her AEF Donor Advised Fund. For iquidity purposes, up to 1.0% of the assets of each donor s fund wi be hed by AEF in a pooed Liquidity Account. This is not an additiona fee. AEF wi track each fund s individua ownership of this poo and credit reated earnings on the Liquidity Account to your fund. Statements AEF provides a Donor Advised Fund statement to donors on a quartery basis. Information contained in the statement incudes: A summary of the fund s financia status A record of contributions to the fund A record of grants made from the fund Grant Recommendation Timing Donors may submit grant recommendations at any time. Some donors choose to deay recommending grants for a period of time, intending to aow the fund s baance to grow. However, each fund must eventuay make grants. Accordingy, AEF wi contact the donor if the fund has made no grants in the preceding 36-month period. Let us abor to make the heart grow arger as we become oder, as a spreading oak gives more sheter. Richard Jefferies

8 Grants to Charitabe Organizations Grants wi ony be made to U.S. charitabe organizations that are tax-exempt pubic charities, foreign charities through an approved intermediary and vetting process, or to government entities (e.g. state universities, pubic schoo systems, and park systems) for charitabe purposes. Non-operating private foundations are not eigibe to receive grants. AEF ony approves grants that are used excusivey in furtherance of charitabe purposes. Per IRS reguations reated to donor advised funds, donors, donor advisors, and reated persons may be subject to excise taxes and other penaties if they receive more than an incidenta benefit from a donor advised fund (IRC 4967). A benefit is more than incidenta if, as a resut of a distribution from a DAF, such person receives a benefit that woud have reduced or eiminated a charitabe contribution deduction if the benefit was received as part of the transaction. Some exampes the IRS may consider prohibited are: Exampes of Non-incidenta Benefits (Not OK) Meas Certain dues or membership fees Goods bought at charitabe auctions or tickets for charitabe events that entite the attendees to any materia benefit Preferentia access/seating not avaiabe to the genera pubic Satisfying a egay binding pedge from a donor advised fund account Exampes of Incidenta Benefits (Generay OK) Coffee mugs Key chains Caendars Posters Intangibe reigious benefits Other impermissibe private benefits incude grants for schoo tuition or schoarships sent directy to individuas. Aso, grants may not be used for obbying, poitica contributions, to support poitica campaign activities, or any other non-charitabe purpose

9 Grant Procedure After a fund is estabished, the donor may submit grant recommendations through AEF s onine fund access too which is avaiabe through AEF s website: Aternativey, AEF can provide the donor with a suppy of Grant Recommendation Forms, which can be faxed, emaied or maied back to AEF. The minimum grant amount is $250. AEF reviews each grant recommendation. Upon approving a recommendation, AEF iquidates fund investments, prepares a check, and sends it to the charitabe organization. A etter attributing the grant in the name of the fund accompanies the check. A copy of this etter is aso sent to the donor. (If the donor prefers anonymity, grants can be sent without identification of the fund and/or donor.) Grants are processed on an ongoing basis. Normay, AEF distributes checks within seven days of receiving a Grant Recommendation Form, though internationa grants may take onger. If AEF experiences a probem approving a particuar grant recommendation, the donor wi be contacted in a timey manner to discuss the matter. Administrative Fee AEF charges each Fund a tiered administrative fee. Contact your financia advisor for detais. Investment Charges Professiona investment management fees, commissions, transaction expenses, etc. are charged directy to the reevant funds. These charges are typicay reated to the seection of investment options

10 Other Considerations Athough the AEF Donor Advised Fund program provides the donor a great dea of atitude in taioring a fund to meet their individua needs, it must be understood that: Funds wi be operated excusivey for charitabe purposes and per IRS rues. Any non-charitabe distribution from a fund, for exampe, a grant resuting in the donor or famiy member receiving more than an incidenta benefit, coud resut in federa tax penaties to the donor and AEF. Funds wi be administered in accordance with the provisions of this Program Description and the terms and conditions of AEF s Artices of Incorporation and Code of Reguations. Each Fund wi be treated as a component fund of American Endowment Foundation. Contributions, once received and accepted by AEF, become the property of AEF and cannot be returned to the donor. AEF s Board of Directors has the right to modify any restriction on any fund if it determines such restriction becomes, in effect, unnecessary, incapabe of fufiment, or inconsistent with charitabe need. A recommendations from the donor concerning grants, investments or administration of any fund are advisory ony. AEF s Board of Directors is free to accept or reject, in whoe or in part, a such recommendations. AEF reserves the right to modify the Donor Advised Fund program. A grant wi not be made to satisfy any donor financia obigation, such as an enforceabe pedge, in which the donor has made a egay binding obigation

11 This exampe form is for iustrative purposes ony. When you are ready to submit an appication, it must be competed onine at: Name of Donor Advised Fund (e.g. Smith Famiy Charitabe Fund) Donor Advised Fund Appication 5700 Darrow Road, Suite 118, Hudson, Ohio Donor-Advisor(s) This person(s) may advise AEF concerning grants, investments, and Fund disposition issues. Donor-Advisor Mr./Mrs./Ms./Dr. First Name: M.I.: Last Name: Suffix (Jr., Sr., etc.): Date of Birth: Phone: Emai: Street Address: City: State: Zip Code: Spouse or Domestic Partner Check here to add Spouse or Domestic Partner to Fund. Mr./Mrs./Ms./Dr. First Name: M.I.: Last Name: Suffix (Jr., Sr., etc.): Date of Birth: Phone: Emai: How Woud You Like to Be Recognized When Grant Letters are Sent from your Donor Advised Fund? (e.g. Mr. and Mrs. John Smith, Joan and John Smith, etc.) Additiona Donor-Advisor This person may advise AEF concerning grants, investments and Fund disposition issues. This person wi have independent onine access to the Fund and wi receive communication separate from the Donor-Advisor(s) regarding the Fund. Check here to add additiona contact information. Mr./Mrs./Ms./Dr. First Name: M.I.: Last Name: Suffix (Jr., Sr., etc.): Date of Birth: Phone: Emai: Street Address: City: State: Zip Code: How Woud You Like to Be Recognized When Grant Letters are Sent from your Donor Advised Fund? (e.g. Mr. and Mrs. John Smith, Joan and John Smith, etc.)

12 Anticipated Contribution ($10,000 minimum vaue required) $ (Pease describe the assets comprising the initia contribution to estabish the Fund, incuding approximate vaue) Anticipated Future Contributions $ (e.g. IRA beneficiary, ife insurance proceeds, CRT remainder interest, etc.) Investments Check here if no Financia Professiona. The American Endowment Foundation Deveopment Team wi contact you for further discussion. The Donor-Advisor may recommend a Financia Professiona to work with American Endowment Foundation concerning the investments of this Fund. Is this the first Donor Advised Fund that the Financia Professiona has opened at American Endowment Foundation? Yes No Mr./Mrs./Ms./Dr. First Name: M.I.: Last Name: Suffix (Jr., Sr., etc.): Emai: Phone: Fax: Job Tite: Company: Street Address: City: State: Zip Code: Check here if you need to add any additiona Financia Professionas, Associates, or other Staff Members. Mr./Mrs./Ms./Dr. First Name: M.I.: Last Name: Suffix (Jr., Sr., etc.): Emai: Fax: Job Tite: Phone: Are You Acting as a: RIA Broker for this fund? Are You: Discretionary NonDiscretionary Which financia custodian wi you be using?

13 Succession/Disposition Pan Choose 1 of the 5 options avaiabe I wish to choose a Disposition Pan. Successor Advisor - You may name one or severa persons to succeed you as Successor Advisor of this Fund. If more than one individua is isted beow, pease determine who is the Primary and Contingent Successor Advisor or if they have Equa responsibiity. If there are more than two persons, pease indicate if they are a Committee and who is the Spokesperson and who is a Member. The Successor Advisor repaces the origina Donor-Advisor after the donor does not want to serve, is incapacitated or deceased. The duties of a Successor Advisor incude making additiona contributions, make grant requests, recommend investment advisors and suggest investment strategies. The successor advisor assumes the roe after both the Donor-Advisor and Spouse/Domestic Partner ceases to serve. Successor Advisor # 1 Mr./Mrs./Ms./Dr. First Name: M.I.: Last Name: Suffix (Jr., Sr., etc.): Reation to Donor-Advisor: Date of Birth: Street Address: City: State: Zip: Phone: Emai: Primary - The immediate next person to assume the roe of Advisor to the Fund. Contingent - If the Primary Advisor ceases or is unabe to serve, the Contingent Advisor is the next person to service as advisor to the Fund. Equa - Mutipe Successor(s) who wi work together as Advisor(s) to the Donor Advised Fund. Committee Spokesperson - One person who wi recommend grants to AEF on behaf of the Donor Advised Fund. This person wi work with Committee Members associated with the Donor Advised Fund, but ony the Spokesperson can recommend grants on behafof the Committee. Committee Member - Person associated with the Donor Advised Fund who works with other members and the Committee Spokesperson to discuss grant recommendations

14 Additiona Successor Advisors (if needed) Successor Advisor # 2 Mr./Mrs./Ms./Dr. First Name: M.I.: Last Name: Suffix (Jr., Sr., etc.): Reation to Donor-Advisor: Date of Birth: Street Address: City: State: Zip: Phone: Emai: Primary Contingent Equa Committee Spokesperson Committee Member Successor Advisor # 3 Mr./Mrs./Ms./Dr. First Name: M.I.: Last Name: Suffix (Jr., Sr., etc.): Reation to Donor-Advisor: Date of Birth: Street Address: City: State: Zip: Phone: Emai: Primary Contingent Equa Committee Spokesperson Committee Member Successor Advisor # 4 Mr./Mrs./Ms./Dr. First Name: M.I.: Last Name: Suffix (Jr., Sr., etc.): Reation to Donor-Advisor: Date of Birth: Street Address: City: State: Zip: Phone: Emai: Primary Contingent Equa Committee Spokesperson Committee Member

15 Disposition Options The foowing 4 options are aternatives to the Donor-Advisor(s) naming a Successor Advisor of the Fund. Upon notification of the death of the Donor-Advisor(s), American Endowment Foundation wi enact the seected disposition pan. Pease discuss compicated disposition pans with AEF to avoid confusion or potentia probems. If you have not named a Successor Advisor, seect one of the foowing pans. 2 I (we) recommend the Fund to continue on, making grants annuay to the foowing charitabe organizations: 3 I (we) recommend the Fund to terminate, and the proceeds be granted to the foowing charitabe organizations: 4 I (we) recommend the Fund to continue, with AEF s Board of Directors, using its discretion, awarding grants to worthy charitabe organizations in the foowing fied of interest and/or community (pease describe): 5 I (we) recommend the foowing customized disposition pan for this Fund:

16 Acknowedgement & Signature I, as Donor-Advisor, authorize the Financia Professiona(s) associated with my Fund to submit grant recommendations on my behaf. Yes No (initia here) I understand that my Fund may be charged a fee by the Financia Professiona that I have seected that is separate from AEF s administrative fees. Signature (seect one): I hereby irrevocaby give the property described in this appication and forthcoming attachments to American Endowment Foundation, to estabish a Donor Advised Fund (i.e. for current gifts). I intend, through a future transfer of property to American Endowment Foundation, to estabish a Donor Advised Fund. This expression is not to be considered a pedge (i.e. primariy for testamentary gifts). I intend to recommend a distribution of assets from another charitabe organization to American Endowment Foundation, to estabish a Donor Advised Fund (i.e. for transfers from other Donor Advised Fund programs). I intend that the person described above as Donor-Advisor wi periodicay recommend grants from this Fund for charitabe purposes. I understand that AEF s Board of Directors, in its soe discretion, is free to accept or reject any recommendations. I aso understand that AEF s Board of Directors is empowered to modify any restriction reated to this Fund, if in its judgment such restriction becomes, in effect, unnecessary, incapabe of fufiment, or inconsistent with charitabe needs. I have read the Donor Advised Fund Program Description, and agree to its terms and (initia here) conditions. I understand that grants from this Fund may not be used to satisfy pedges. I understand that AEF s Board of Directors reserves the right to modify the Donor Advised Fund Program, as it deems necessary. I hereby certify that to the best of my knowedge a information presented in connection with this appication is accurate, and I wi notify AEF prompty of any changes. Donor-Advisor Signature Date Spouse or Domestic Partner Signature Date Additiona Donor-Advisor Signature Date

17 The Gift of a Lifetime: Your Enduring Legacy However you buid your charitabe egacy here at American Endowment Foundation, you have the specia satisfaction that comes with knowing you have done your part to make your word a itte better. Or, more simpy put, that your ife s efforts have made a difference. FOR MORE INFORMATION CONTACT: American Endowment Foundation 5700 Darrow Road, Suite 118 Hudson, Ohio To-free Phone Fax AEF s Empoyer ID Number: American Endowment Foundation is registered in a states, and the District of Coumbia, where such registration is required. A copy of such record is avaiabe upon request.

18 5700 Darrow Road, Suite 118 Hudson, Ohio To-free Phone Fax