Investment Management

At AEF, donors can recommend their existing trusted investment advisor to tailor asset allocation in a Fund.

Concentrated or illiquid holdings may make it difficult to gift smaller amounts to a number of charities. Smaller charities are often not equipped to handle gifts of securities or illiquid assets.

Donors can avoid the year-end pressures associated with gifting to smaller charities (an immediate and maximum tax benefit when contribution is given to AEF).

A Fund can be used to distribute grants over time to ensure accountability from the recipient charity.

• Gift acceptance privacy - The Donor Advised Fund allows a donor to make a contribution, and then support multiple charitable interests. Active members in a community or who live in more than one community may not want more privacy in their contributions and in their grant-making.
• Administration privacy - An AEF Donor Advised Fund offers maximum privacy. In comparison, private foundations offer little privacy and no anonymity. With the advent of the Internet, information is more available than ever. Today, anyone with a computer can access Guidestar to gain information on any private foundation. Since all of the information is pulled from a foundation’s 990-PF (or in some instances the actual scanned 990-PF is available), anyone can see the asset balance, the directors, contact information, administrative fees paid, every grant that is made (organization name and amount), investment management fees (holdings are sometimes included), and trustee compensation.
• Investment privacy - Donors may want privacy in the investments of a Fund.
• Grant-making privacy - Donors may want to make grants without public recognition.
• Grant-making anonymity - Donors may be concerned about unsolicited grant requests or they may want to protect a child from special attention. Charitable giving can be quite personal, and donors may want their grants to remain anonymous.

Maximize Tax Deduction and Valuation

Provide immediate and maximum tax benefits of giving. See Tax Benefits

• In the beginning or on occasion, the trustees of a private foundation may have difficulty deciding on a sufficient number of grants to meet the annual 5% payout requirement. A solution is to create a Donor Advised Fund at AEF, and to contribute all or part of the current year's income to that Fund. The private foundation's contribution to AEF is a "qualifying distribution" that counts towards the payout requirement. The client and fellow trustees can take their time and consider the grants they will recommend from the Fund while forming their philanthropic plan.
• Optimize for tax advantaged gifting.
• Facilitate "anonymous" grant-making.

Private foundations have a number of financial and administrative disadvantages when compared to a Donor Advised Fund. These drawbacks include greater investment restrictions, mandatory distribution and reporting responsibilities, fewer tax benefits and the sometimes-heavy burden of personally administering a private foundation. see Comparison

AEF is a public charity into which a private foundation may distribute all of its assets.

The first step in the termination process is the establishment of a Fund at AEF into which the private foundation's assets will be distributed. Second, AEF will work with you and your client to take the necessary steps to terminate the private foundation -- whether it is in trust or corporate form -- and arrange for the transfer of assets to the new Fund at AEF.

1) Name AEF as the Charitable Remainderman that becomes the lasting legacy of giving for continued family involvement.

2) A Donor Advised Fund can ease the pressure of deciding the ultimate charitable recipients.

3) A Donor Advised Fund can be the overflow, when the client no longer needs the income.

4) A Donor may prefer to accelerate a CRT into a Donor Advised Fund and give sooner.

Name AEF as the Charitable Beneficiary of a CLT. The Fund becomes the lasting legacy for continued family involvement.

By designating AEF as the beneficiary of a life insurance contract, donors can make a significantly larger charitable gift than may be possible out of their current assets. If a donor makes AEF the owner of the contract, he/she can deduct the premiums as they are paid. Or, if the donor would rather retain the right to change beneficiaries on the contract and doesn't care about deducting the premium, donor's can simply name AEF as partial, sole or contingent beneficiary.

Retirement plan assets when left to children, are subject to both estate tax and income tax (called Income in Respect to Decedent tax) Without proper planning, up to 76% of your clients retirement assets can be lost to taxes.

Gifts of these assets will not be taxed if they are paid directly to AEF as beneficiary. Donors can designate all or a certain percentage of their retirement assets to go to AEF.

Under current law, if your client wants to make a gift of retirement assets to charity, he or she must first withdraw the assets, recognize the distribution for income tax purposes, contribute the funds to charity, and then claim an income tax charitable deduction to mitigate the income tax liability. Note: there may be penalties for early withdrawal of any retirement assets.