Donor-Advised Fund

[RunningBum]

I'm now in that "Gulp" time where the money is out of Vanguard, and my VG charitable account is closed (as they said it would be if I moved all money out), but not yet in my Fidelity charitable account. The Fido rep warned me that there would be a brief period of a few days where I wouldn't see it. It's just a little unsettling.

Also, if it matters to you, know that your VG account will be closed if you empty it, so make copies of any statement/donations that you'd like to save. The only important ones for taxes are the contributions to the account, which is what you can deduct on schedule A. Any distributions are not events that affect your taxes in any way, but you might want to keep track of where your distributions (what you'd think of as donations) have gone, to avoid any doubling or missed donations.

 

[Rosie]

Everything you wrote happened with me, too.

On Fri 1/19 I submitted the grant request to VG Charitable to send the entire balance to Fido Charitable.

On Mon 1/22 my VGC acct showed that the status of the grant request was pending.

On Wed 1/25 I received an email from VGC notifying me that the grant confirmation statement was available in my account. I logged on and ... my account was already closed!

I was very surprised at just how quickly VG Charitable closed my account. I guess they didn't take too kindly to having all the money transferred to a competing DAF. I had saved copies of all my statements, and the grant request, so I wasn't too concerned. Just a little miffed.

Then the wait. I was starting to get antsy, but happily the money finally appeared in my FidoC account this morning (Tues 1/30). Saved me from making phone calls!

The transfer ended up taking 7 business days, in line with what I was told to expect.

Thanks for all your advice RB!

 

[RunningBum]

The money just showed up in my Fidelity Charitable account today too. I may not have checked yesterday. Now I can set up the investment options.

 

[nvestysly]

I realize this thread on Donor Advised Funds is quite old but it seems the most likely place to ask my questions...

1) I'll check with our attorney regarding estate planning documents but it sounds like several people have used their DAF as the recipient of all, or part, of their financial assets upon death. Comments?

2) If we establish a DAF we will be using Fidelity. Anyone have a reason that is not a good idea?

3) Is there and advantage or disadvantage to naming the DAF something generic? That is, not using your real names? Does Fidelity allow generic names?

4) I saw reference to waiving DAF account fees for Fidelity PAS (Portfolio Advisory Services) clients? I'm not certain what PAS status is or how one achieves that. Is Preferred Client a similar status?

Thanks in advance. If moderators want me to start a new thread I'll do that since this one is quite old.

 

[MBAustin]

I realize this thread on Donor Advised Funds is quite old but it seems the most likely place to ask my questions...

Thanks in advance. If moderators want me to start a new thread I'll do that since this one is quite old.

Your questions are good ones and this is a perfect example of when bumping an old thread is appropriate.

 

[JoeWras]

1) Yes, we did that. The nice thing is you can change the distribution plan within the DAF anytime instead of re-writing a will or trust. As a matter of fact, it is time for us to do so. You can also have the DAF give out the proceeds over time instead of one lump sum. This actually works better for charities and avoids them getting one time drunk.

I can't tell you how well it works since I won't know either when I'm dead.

2) Fidelity Charitable is fine. We are using Vanguard Charitable since it is easier to link accounts to donate to the DAF. However, Vanguard has a higher "entry amount" and also requires each distribution to be a minimum of $500. Fidelity is less. There may be a difference in fees because of this.

3) Can't speak to Fidelity, but Vanguard Charitable allows flexibility. We chose to use our names to make it clear to the executor of our estate where this goes and that it is us. I see that as the main advantage. Each time we distribute, there are options to hide that information or fully expose it as we wish.

4) Can't answer.

There are ongoing fees in both V.C. and F.C. V.C. bases them on the balance. Read the fine print. There are also low balance fees and forced distributions if you go too low or never distribute. V.C. initiates this action after 30 months of no granting.

This is one area it pays to read the fine print.

 

[euro]

I haven't re-read the whole thread so it may have already been mentioned, but I wanted to throw Schwab Charitable into the mix for consideration. Fidelity and Vanguard are very fine, but I ended up going with Schwab based on minimum amounts for initial setup and gift awards as well as some expense numbers. Again, all are perfectly fine, but you may want to compare them and pick the one that best suits your needs.

 

[RunningBum]

1. I haven't. Someone else becomes the manager of the DAF so I'd rather bequeath directly. Also, a tIRA s more efficient to donate upon death because they don't have to pay taxes. The DAF funds' tax break has already been recognized.

2. None i know of.

3. Fido allows anonymous distributions, so I put my name on the DAF for when i want it know,and choose the anon option when i don't.

4. Don't know

 

[nvestysly]

Thanks for the replies. The members of this forum are some of the most informed, thoughtful people I've encountered on the internet.

Other than question 2) Is a Fidelity DAF a bad idea? I think I'm on the right track and will likely create an account with them.

Here are some comments related to the other questions I asked of Fidelity telephone reps or garnered from their web site:

1) Yes, DAF's can be incorporated into estate planning documents. Fido mentioned they have a number of accounts that are set up today and remain dormant for some period of time before becoming active at end of life. While this is not the recommended practice, Fido does allow an account to remain dormant if they are notified of such. Otherwise, an active account while living can easily be turned into an estate type of account in one of several ways that seem suitable to DW and myself.

2) Except for the .6% fee I like Fido as it will make the transition of appreciated assets very easy for us.

3) Almost any name is acceptable but Fido reserves the right to "approve" the name. Most people use a personal name, sometimes first and last name, etc. but it's not uncommon to name the fund in a generic way. The name can be changed as needed at a later date.

4) DW and I are not Portfolio Advisory Services clients and don't plan to be in that category as we are DIY (for now) with our investments. The Fido rep indicated they may reduce the .6% fee to something lower since we have all our investment accounts with them and we may fall into a "household" discount model. The rep did not promise that but mentioned it may be applicable.

In reading the Fido DAF guidelines I came across a very interesting feature - Gift4Giving. Apparently the DAF account holder can request an email be sent to just about anyone - friends, family, etc. - and the email contains a link that allows the email recipient to distribute a pre-defined dollar amount to a charity of their choice as long as the recipient is on the Fido list. Here's a long excerpt from the Fido guidelines:

Gift4Giving® Program — an eGift

Account Holders may dedicate a portion of their Giving Accounts to an eGift known as a Gift4Giving®. A Gift4Giving eGift allows individuals appointed by Account Holders (“Gift4Giving recipients” or “recipients”) to recommend grants to eligible charitable organizations of their choice. Gift4Giving is an eGift; therefore, Fidelity Charitable will send a Gift4Giving to recipients only by email. Grants from a Gift4Giving eGift must be recommended online. A recipient accesses a Gift4Giving eGift through a hyperlink in the email sent to the recipient. A Gift4Giving eGift is neither transferable nor redeemable for cash, and does not convey to the Gift4Giving recipient goods or services.

An Account Holder may designate a minimum of $50, and up to the maximum of $5,000 (in increments of $50), from his or her Giving Account to a Gift4Giving eGift.

When an Account Holder requests that Fidelity Charitable send a Gift4Giving eGift to a recipient, the dollar amount of the Gift4Giving is allocated to an account separate from the Account Holder’s Giving Account and invested in a cash pool available only for Gift4Giving accounts. The recipient has no access to the Account Holder’s Giving Account. Account Holders will be able to view transaction information — such as when the Gift4Giving eGift was emailed, if it has been used for charitable grants, or if it has expired — in their Giving Account History. Account Holders will not have access to, or receive any information about, the charity or charities recommended by the recipient.

Anyone made use of this Gift4Giving (eGift) feature?

 

[copyright1997reloaded]

I haven't re-read the whole thread so it may have already been mentioned, but I wanted to throw Schwab Charitable into the mix for consideration. Fidelity and Vanguard are very fine, but I ended up going with Schwab based on minimum amounts for initial setup and gift awards as well as some expense numbers. Again, all are perfectly fine, but you may want to compare them and pick the one that best suits your needs.

Also a vote for Schwab. Easy transfer from my other Schwab accounts, low $50 minimum for distribution. Also like that I can see my DAF right along with my other accounts.

 

[copyright1997reloaded]

In reading the Fido DAF guidelines I came across a very interesting feature - Gift4Giving. Apparently the DAF account holder can request an email be sent to just about anyone - friends, family, etc. - and the email contains a link that allows the email recipient to distribute a pre-defined dollar amount to a charity of their choice as long as the recipient is on the Fido list. Here's a long excerpt from the Fido guidelines:

Gift4Giving® Program — an eGift

Account Holders may dedicate a portion of their Giving Accounts to an eGift known as a Gift4Giving®. A Gift4Giving eGift allows individuals appointed by Account Holders (“Gift4Giving recipients” or “recipients”) to recommend grants to eligible charitable organizations of their choice. Gift4Giving is an eGift; therefore, Fidelity Charitable will send a Gift4Giving to recipients only by email. Grants from a Gift4Giving eGift must be recommended online. A recipient accesses a Gift4Giving eGift through a hyperlink in the email sent to the recipient. A Gift4Giving eGift is neither transferable nor redeemable for cash, and does not convey to the Gift4Giving recipient goods or services.

An Account Holder may designate a minimum of $50, and up to the maximum of $5,000 (in increments of $50), from his or her Giving Account to a Gift4Giving eGift.

When an Account Holder requests that Fidelity Charitable send a Gift4Giving eGift to a recipient, the dollar amount of the Gift4Giving is allocated to an account separate from the Account Holder’s Giving Account and invested in a cash pool available only for Gift4Giving accounts. The recipient has no access to the Account Holder’s Giving Account. Account Holders will be able to view transaction information — such as when the Gift4Giving eGift was emailed, if it has been used for charitable grants, or if it has expired — in their Giving Account History. Account Holders will not have access to, or receive any information about, the charity or charities recommended by the recipient.

Anyone made use of this Gift4Giving (eGift) feature?

This seems like a great feature - thanks for posting!

 

[audreyh1]

Our names are on the DAF because Fidelity allows anonymous donations. I also like how they allow donations as small as $50.

 

[nvestysly]

For those of you who are using Fidelity Donor Advised Funds...

Which investment pool(s) are you utilizing and why?

DW and I may simply go with the Total Stock Market Index. The expense ratio is 0.015% and in any given year we don't mind a loss. For that matter a multi-year downward or horizontal stock market makes use of a dollar cost averaging approach. Our plan is to obtain the tax benefit for the year(s) we contribute and make distributions as we see fit. Over time the account balance is likely to grow as we continue contributions to the DAF.

 

[JoeWras]

1. I haven't. Someone else becomes the manager of the DAF so I'd rather bequeath directly.

Not necessarily true. At least with Vanguard Charitable (and pretty sure Fido's too), you set up a plan AHEAD of time. You are the manager before you die. Or, alternatively you can skip all that and assign a manager at death and let them actively manage. We chose to NOT do that.

So what DW and I have done is set up a succession giving plan. It is an "almost" endowment. For as long as the funds last until a certain minimum, our plan will give out 5% in total per year to a designated list of charities, each one having a specific percentage of that 5% pie. (The 5% is our choice, it can be more.) No manager needed. We can change this as many times as we want before we die without changing our will or trust.

There are provisions in there if the charities go away or die. They split the pie to the remainder. And in the worst case, it goes to their general charity. Unlikely to happen unless you pick 5 bum dying charities.

In reading the Fido DAF guidelines I came across a very interesting feature - Gift4Giving. Apparently the DAF account holder can request an email be sent to just about anyone - friends, family, etc. - and the email contains a link that allows the email recipient to distribute a pre-defined dollar amount to a charity of their choice as long as the recipient is on the Fido list.

That's a nice feature. FIDO's Charitable is definitely more flexible than Vanguard Charitable.

 

[audreyh1]

For those of you who are using Fidelity Donor Advised Funds...

Which investment pool(s) are you utilizing and why?

DW and I may simply go with the Total Stock Market Index. The expense ratio is 0.015% and in any given year we don't mind a loss. For that matter a multi-year downward or horizontal stock market makes use of a dollar cost averaging approach. Our plan is to obtain the tax benefit for the year(s) we contribute and make distributions as we see fit. Over time the account balance is likely to grow as we continue contributions to the DAF.

I use the lowest cost funds. Some of the funds are quite expensive!

 

[RunningBum]

Not necessarily true. At least with Vanguard Charitable (and pretty sure Fido's too), you set up a plan AHEAD of time. You are the manager before you die. Or, alternatively you can skip all that and assign a manager at death and let them actively manage. We chose to NOT do that.

So what DW and I have done is set up a succession giving plan. It is an "almost" endowment. For as long as the funds last until a certain minimum, our plan will give out 5% in total per year to a designated list of charities, each one having a specific percentage of that 5% pie. (The 5% is our choice, it can be more.) No manager needed. We can change this as many times as we want before we die without changing our will or trust.

There are provisions in there if the charities go away or die. They split the pie to the remainder. And in the worst case, it goes to their general charity. Unlikely to happen unless you pick 5 bum dying charities.

Did not know that. I'll still probably let my son take over. most of my regular yearly donations go to local things. Once I'm gone i dont care so much about them.

 

[audreyh1]

Yes, I knew that you could assign someone to take over your DAF.