At American Endowment Foundation (AEF), we allow grants to be recommended to 501(c)3 non-profit organizations or similar such entities such as churches , religious organizations, and governmental institutions. The following guidelines provide direction on how grants from a donor advised fund can and cannot be used:
Minimum Grant Amount
AEF has set a minimum grant amount of $250.
A grant must be used exclusively for charitable purposes. Donors and their family members cannot receive anything beyond an incidental benefit from the charitable organization to which they made a grant.
Charitable Events, Galas and Ticket Purchase (Bifurcated Grants)
Grants from a DAF cannot be used to pay any portion of a donation split into tax deductible and non-tax deductible portions. AEF will not approve the recommendation if the receipt of any benefit (such as attendance at a charitable event) is contingent upon the grant from the DAF as part of a larger donation. The IRS considers the relief of the donor’s obligation to pay full price of a ticket/admission to a charity sponsored event a direct benefit that is more than incidental. A donor may make a grant to support or sponsor a charitable event or gala and receive acknowledgement for that support. However, if in exchange for the grant, the charity offers a ticket to the event (or any benefit), and the value of that ticket is more than incidental, the donor must decline it.
Grants may not be used to satisfy the cost of a membership if the membership offers more than incidental benefits to the donor.
Benefitting an Individual (Missionary Grants)
Grants from a DAF cannot be used to benefit an individual, either directly or indirectly, except support grants for missionaries and scholarships. If a donor recommends a grant to an eligible charity to support the missionary work of an individual, AEF will contact the donor to ascertain if the named individual is a relative. If the named individual is a relative, the grant recommendation will not be approved. If the missionary is of no relation to the donor, the grant will be approved with a special statement added to the letter. Relatives will be interpreted as the donor and the donor’s spouse, ancestors, children, grandchildren, great grandchildren, brothers, sisters and spouses of any of these persons.
Donors may recommend a grant for a scholarship administered by an eligible charity or school. The donor may indicate the grant is for the recipient of the named scholarship but not designate the specific individual. The grant check will be made payable to the organization sponsoring the scholarship for the benefit of the scholarship fund. The donor and other members of the donor’s family may participate on the independent scholarship selection committee but may not represent the majority of the committee.
Donors may recommend a grant for a fundraising campaign for a charitable cause (i.e., walking or biking fundraisers for a charitable organization) where an individual is responsible for the fundraising but does not receive more than incidental benefit from the fundraising. Grants from a donor advised fund to support a “GoFundMe” or similar online giving portal will be denied if the intended recipient is a specific person, or the intended recipient is not a 501(c)3 organization or similar entity such as a church, religious organization or governmental institution.
Donors may recommend a grant to fulfill a pledge to a charitable organization provided that AEF makes no reference to the existence of the pledge when making the grant, the donor does not receive any benefit that is more than incidental on account of the grant, and the donor does not attempt to claim a charitable deduction with respect to the grant.
Grants Sent Directly to Charitable Organizations
All checks will be issued and sent by AEF directly to the charitable organization. Donors may request any check be sent via USPS Priority Mail or overnight delivery, with the fees charged to their donor advised fund. Donors may not deliver grant checks. AEF will continue to advance and implement electronic money transfers of grants to get grant dollars to charities more quickly and efficiently.
Request for Grant Funds
Once a grant is approved, AEF will contact the financial advisor investing the account with a request for distribution. The financial advisor will raise the requested cash amount and send it to AEF.
Secure Online Portal
AEF offers a password protected online portal. Individuals with granting privilages will have access to their DAF from the portal site. Grants should be submitted using the online portal to increase efficiency and reduce processing time. Grant history and other useful information may be found on the site. Grant requests will not be taken on the phone.
AEF will review granting history and contact donors who have not made any grant recommendations for the past 36 months or have not submitted a long-term granting strategy to AEF.
For additional information on any topic, please contact Donor Services.