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How a Donor
Advised Fund Works
The
procedure is designed to be easy. If you have questions, the experienced
staff of American Endowment Foundation is available to guide you through
every step of the process. To establish a Donor Advised Fund at AEF:
1. Download and print out a Program
Description and Application, or contact us to have it mailed
to you.
2. Complete
the simple Application.
3. Contribute
assets to your Fund. AEF will accept as little as
$10,000 as an initial contribution.
When we receive your completed application, we will contact you or your
professional advisor to arrange transfer of the assets you intend to give
and to arrange the Fund’s investment program.
4. When we accept your contribution, we send you a letter acknowledging
your gift, and you receive a supply of grant recommendation forms.
You retain the right to advise AEF in administering the affairs of your
Fund. Your role is that of an advisor (hence the name donor advised fund).
This concept of advice is key to your Fund’s superior tax treatment
by the IRS. Consider the following:
- Contributions, once received and accepted by AEF, are irrevocable.
- All recommendations
from you are advisory. IRS regulations common to all donor advised funds
requires that the sponsoring charity (in this case, AEF) must have final
say on all recommendations.
- The Donor
Advised Fund must be operated exclusively for charitable purposes.
- AEF can
only consider grants to US-based, tax-exempt, public charities or to
qualified governmental organizations.
- AEF will
contact you immediately regarding grant recommendations that do not
comply with tax regulations.
Fees
AEF
incurs expenses in operating your Donor Advised Fund. These include Donor
services, phone support, mailed notices, statements and communications,
grants administration, and online services. To cover the costs associated
with these services, the Fund assesses an account administrative fee,
outlined below:
| Asset
Value |
Fee |
| First
$500,000 |
1.00% |
| Next
$500,000 |
.75% |
| Next
$1,500,000 |
.50% |
| Over
$2,500,000 |
.25% |
Fees are
charged directly to a Fund and not charged to the donor.
Getting
started
AEF lets you structure your giving over time - A Donor Advised
Fund can start with a minimum contribution of $10,000. This allows you
to get started at low threshold, understand how our program works, and
then, as appropriate, contribute more.
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