Donor-advised Funds (DAFs)

A charitable giving vehicle administered by a public charity to manage charitable donations. A donor opens an account in the Fund and contributes cash, securities or other assets. The donor surrenders ownership of the donated assets, but retains certain advisory privileges which may include how the account is invested and how grants are made to charities.

Tax and Financial Information
A donor is eligible for a charitable income tax deduction when a gift is made to the DAF. Depending on the donor’s circumstances, gifts may be eligible for the same charitable income tax benefits as gifts to other charities. The donor must receive a gift receipt from the DAF to document the gift for tax purposes.

There is no additional charitable income tax deduction when a grant is made from a DAF to another charity. However, the donor should acquire a contemporaneous acknowledgement from the charity confirming that no goods or services were provided as a result of the grant.

A donor may recommend grants to any qualified charity within any restrictions imposed by the Fund. Because the donor received a full-value tax deduction for the gift to the DAF, the donor may not receive any goods or services from the charity receiving a grant from the Fund.

For the same reason as above, grants from a DAF may not go to certain split-interest gifts, such as charitable gift annuities, charitable remainder trusts, and pooled life income funds.

If gifts in a DAF grow through investment, that growth will be tax-free. Any growth must also be granted to charities. A DAF may charge fees for management and investment services connected to a Fund.

Other Important Information

When opening a DAF account, the donor will sign an agreement with the Fund. As part of the agreement, the donor retains certain advisory privileges. This may include the ability to advise on the investment of the account, and make requests for grants to other charities. It may also include the ability to name additional advisors and successor advisors.

The Fund may also place restrictions on grants, including minimum grant size, minimum or maximum numbers or dollars of grants per year, and restricting the range of eligible charities for grants.

A DAF may receive a large gift in one year, and generate a full-value income tax deduction in that year, and then allow an easy process for grants to be made to charities over a number of subsequent years.

A DAF may be useful to accept gifts of hard-to-value or complex assets before grants are made to other charities.

In some instances a donor may name a successor advisor to the Fund. This allows the involvement of family members and may pass a DAF account on to a second generation.

Pledges may not be made to a charity by a donor and then fulfilled by grants from a DAF.

Donor-advised Fund Grants to Clarkson University

Clarkson University currently does not offer a donor-advised fund, but the University is eligible to receive grants from other Funds. Information you may need to request a grant to Clarkson:

Clarkson University
8 Clarkson Ave, Box 5522
Potsdam, NY 13699
Contact: Annie Clarkson Society, or call 315-268-7978
Federal ID Number: 15-0543659
Clarkson has 501(c)(3) charity status

Grants from donor-advised funds are not always clearly identified when Clarkson receives them. It is useful for a donor to advise Clarkson using the contact information above when a grant request is made.

Grants may be made for annual, unrestricted gifts to the Clarkson Fund.

Grants may be restricted to other purposes at the University.

Grants may be made to endowments at the University.

As an estate gift, Clarkson may be named as the final beneficiary of a DAF when it terminates.

You can contact the Annie Clarkson Society for more information.

Follow us on Twitter @annieclarkson

This web page does not provide legal or financial advice, nor is it a comprehensive review of the topic. You should consult your legal and financial advisors and Clarkson University before making or planning your gift.