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Re: Donor-advised funds
Old 05-17-2007, 08:46 PM   #21
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Re: Donor-advised funds

We set up the donor-advised fund (20 minutes on the website, another day to process the data) and moved $5000 (the minimum) of Tweedy shares to the fund's international index (another 20 minutes of making sure we didn't accidentally transfer 500,000 Tweedy shares, another overnight data-processing delay).

Now that we have the account minimum and the tax deduction, we can decide at our leisure what grants to hand out. Future donations to the DAF can also be made in much smaller (less painful) amounts.

Our donated shares in Fidelity's international index have already gained $6.50. This could satisfy all my testosterone-poisoned stock-picking urges.

Guess I'll convert a bit more of the IRA this year...
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Re: Donor-advised funds
Old 05-18-2007, 11:16 AM   #22
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Re: Donor-advised funds

hi nords,

congrats! that sounds simple.

Does your fidelity rep give you suggestions on who to give or do you just direct the gifts to the charity of your choice (ie can you give to any 501c3)?

I have heard some community foundation based DAF's do offer that service - ie giving the donors some ideas or help finding charities to donate to, but not sure how the financial people do it...

i've been considering reaching out to more firms and foundations that have DAF's to let them know about the org i work for...but want to make sure it's worth my time!
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Re: Donor-advised funds
Old 05-18-2007, 12:20 PM   #23
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Re: Donor-advised funds

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Originally Posted by bright eyed
hi nords,
congrats! that sounds simple.
Does your fidelity rep give you suggestions on who to give or do you just direct the gifts to the charity of your choice (ie can you give to any 501c3)?
If your non-profit is a 501(c)3 with a tax ID number then they're probably in Fidelity's database. Some organizations may not have the same name on their website that's on their tax returns-- in the case of the first organization that we've decided to donate to I actually had to look up their IRS Form 990 and enter their tax ID number into Fidelity's search tool. Fidelity will also take your request for donations to other groups and, once they satisfy themselves that they won't get in trouble with the IRS, they'll probably approve that too. I believe they specifically decline to donate to non-U.S.-registered organizations.

It's all online. I haven't even spoken to the rep. But if desired you can dump your donation into their general pool from which they'll make their own charitable donations to whomever Fidelity deems worthy. That way you can get the tax deduction without even having to worry about who to donate it to!

I don't know how well it'll work to reach out to firms & foundations. In Fidelity's case you'll probably have to take them on a dinner cruise with midgets and... well... never mind. When I was treasurer of a non-profit the only money we got from firms & foundations was largely in exchange for free advertising sponsorships & contests, and that usually only happened if one of their employees was an enthusiastic member of our organization. Anonymous contributions only came from certain individuals.

The biggest advantages that we see to DAFs is (1) anonymous donations and (2) immediate tax deductions now, donations at our leisure. It handles both sides of the Mars/Venus differences.

My spouse rarely pipes up with a "You know, we should do this!" financial suggestion. But when she does (every five years or so) I've learned that they're worth listening to... of course right now she's channeling Dolly Levi and enjoying life. Or at least she will when she's done with this week's Reserve gig!
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Re: Donor-advised funds
Old 05-18-2007, 12:30 PM   #24
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Re: Donor-advised funds

thanks for the info Nords - very helpful!

well, I can at least make sure we are in the database!!!

i don't think a cruise w/ little people (eh hm) would be good for our image!

we do get a few donations from people's DAF's...

gracias...!
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Old 06-17-2007, 09:59 AM   #25
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Just in case anyone reads through this post for info on a Donor-advised Fund selection process, Vanguard will add 4 new single-fund pool investment options in their DAF effective July 2, 2007:

100% Prime Money Market Fund (0.29% exp ratio)
100% Total Bond Market Index Fund (0.20%)
100% Total Stock Market Index Fund (0.19%)
100% Total International Stock Index Fund (0.32%)


You also have to add Vanguard Charitable's 0.57% fee onto the above for the 'total cost' (still below most competitors for total cost).
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Old 12-21-2007, 06:56 PM   #26
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Let's revive this thread for my sake. I'm thinking of opening one w/VG, especially since my money is already there. If I'm planning to give the money away anyway, won't need to rely on it for the future, and I'll probably have higher earnings this year than in 2008, any particular reason I shouldn't open one? I've complete the forms, will put in the minimum of $25,000 (which is sort of high), and plan on sending them next Monday at the latest... but I have this weekend to reconsider. :confused: From speaking to the rep., I should have enough time to get it in so that it'll be reflected for 2007. Thanks in advance for your help!
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Old 12-21-2007, 08:16 PM   #27
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Originally Posted by retiringby50 View Post
Let's revive this thread for my sake. I'm thinking of opening one w/VG, especially since my money is already there. If I'm planning to give the money away anyway, won't need to rely on it for the future, and I'll probably have higher earnings this year than in 2008, any particular reason I shouldn't open one? I've complete the forms, will put in the minimum of $25,000 (which is sort of high), and plan on sending them next Monday at the latest... but I have this weekend to reconsider. :confused: From speaking to the rep., I should have enough time to get it in so that it'll be reflected for 2007. Thanks in advance for your help!
Congratulations for making this decision!

As far as everything 'being with Vanguard' - it's a completely separate entity (for tax purposes), so don't think you'll qualify or other gain some advantage. I don't even think you can 'link' your Vanguard Charitable account with your other Vanguard accounts, so it will all be a separate thing.

I haven't revisited the DAF issue lately, even though I should, since I am going to put more money in this year for tax bracket reasons. I was toying with the idea of putting one in Schwab's DAF, since they had a wider selection of investment options and comparable/lower fees than Vanguard (didn't hear about Schwab's option until after I opened up my account with Vanguard).

As far as any reasons "not to" (assuming you've made the decision to make charitable contributions to some charities), the only reason I can think of might be tax bracket reasons -if you think you'll have higher incomes in the future and/or see income tax brackets and rates creep up (my prediction), you might want to consider splitting up your contribution and going with another firm with a lower minimum (put in some in 2007, some in 2008/9).

As a side note-the literature I received from Vanguard Charitable earlier in the year has a deadline that's already passed if you want to transfer funds from a Vanguard mutual fund/stock to a Vanguard Charitable Fund account. You can still send in the paperwork by 12/31/07 (postmark date) if you are mailing a check with your account paperwork, but if you're intending to transfer money from a mutual fund to Vanguard Charitable, I believe the deadline for that date has passed.
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Old 12-21-2007, 09:48 PM   #28
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As far as any reasons "not to" (assuming you've made the decision to make charitable contributions to some charities), ...

You can still send in the paperwork by 12/31/07 (postmark date) if you are mailing a check with your account paperwork, but if you're intending to transfer money from a mutual fund to Vanguard Charitable, I believe the deadline for that date has passed.
Yes, part of the decision was knowing that if I decided not to research other organizations, I would just give to my church, which is a 501(c) (or whatever the correct designation is), which I would give to on a regular basis anyway.

The rep I spoke to, who sounded pretty knowledgeable, said that my fund transfer info needs to be received by 12/27 in order to be processed by 12/31, or like you said, I could send in a check from another place. I forgot to ask if I could send in a check from my Vanguard money market though! Although I was planning to do a fund transfer, I'm going to write a check from a liquid CD just to be safe! I will probably add more money in the future (again, church contributions anyway), so I'll keep the "higher tax bracket" in mind. I'll check back during the weekend to see if there are more answers.
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Old 12-22-2007, 05:03 PM   #29
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... any particular reason I shouldn't open one? I've complete the forms, will put in the minimum of $25,000 (which is sort of high)...
Geez, is your AGI big enough to take that high a deduction?!? I wonder how many potential philanthropists are put off by that requirement.

I'm surprised that Vanguard even bothers with a DAF-- it's a very high-maintenance, high-touch service that requires a lot of effort for little (if any) reward. Fidelity's DAF website is almost completely separate from their regular website, probably so that donors don't accidentally put a six-figure trade into the DAF by mistake. But if you could pay the same amount of expenses (zero) to have the DAF account with either Vanguard or Fidelity, and if Fidelity's minimum was only $5000, which would you choose?
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Old 12-22-2007, 05:20 PM   #30
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I'm surprised that Vanguard even bothers with a DAF-- it's a very high-maintenance, high-touch service that requires a lot of effort for little (if any) reward.
The reason why VG, Fidelity, Merrill Lynch and other brokerages have gotten into the DAF business is to in effect compete with community foundations that have been growing in large numbers across the US over the past two decades. I attended a conference a few years ago where there was a panel discussion on this issue with participants from both sides. Very interesting perspectives. Basically, the community fdn people of course would like your $$ to stay in the area, benefiting your local community; the brokerage people see these enormous sums being peeled off into the community foundations and since they want to keep your assets in their pool under their management, they are willing to do the DAF stuff as a tradeoff.
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Old 12-22-2007, 11:11 PM   #31
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Geez, is your AGI big enough to take that high a deduction?!? I wonder how many potential philanthropists are put off by that requirement.

But if you could pay the same amount of expenses (zero) to have the DAF account with either Vanguard or Fidelity, and if Fidelity's minimum was only $5000, which would you choose?
With the $25,000, I think my contributions in 2007 is equal to at least 25% of my income. So if I put in less (like $10K), it wouldn't be to my benefit, right? Ugh, the taxes part always messes me up!

The main reason I was going with VG is that I already have all their literature and really want to do this for 2008. I guess I better take a look at the Fidelity info as well. Thanks.
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