Charitable giving and creating a philanthropic legacy is easier than ever with the Heart of Illinois United Way Donor Advised Fund.
The Heart of Illinois United Way Donor Advised Fund is an account established to allow donors (individuals or businesses) to make a charitable contribution, receive an immediate tax benefit and distribute grants from the fund over time. A donor using the Donor Advised Fund can make a tax deductible gift now and decide who will benefit from the gift at a later date, even in a different tax year.
How the Donor Advised Fund works:
- The donor establishes the account by completing the Donor Advised Fund Agreement with the Heart of Illinois United Way.
- The donor contributes cash or securities to the account.
- The Heart of Illinois United Way provides a tax receipt for the current tax year deduction.
- The account is managed and assets are invested by the Heart of Illinois United Way’s investment partner, Morgan Stanley Global Impact Funding Trust (GIFT).
- The donor directs distributions to charities from his or her account.
- The Heart of Illinois United Way reviews the recommendation(s), distributes funds, and acknowledges the distribution to the donor and receiving organization.
- Any undistributed assets continue to be managed by the Heart of Illinois United Way and Morgan Stanley GIFT which can be distributed in the future.
Benefits to the Donor:
- Philanthropic Advisement. The Heart of Illinois United Way can serve as a philanthropic advisor by helping identify opportunities of interest to the donor, including researching and identifying community needs, providing due diligence and vetting to ensure the donor’s gifts have their intended results.
- Convenience. The donor makes a tax deductible contribution for the current tax year while deferring the choice of beneficiary until a later date. The donor makes one asset transfer that can benefit multiple organizations.
- Creates a Philanthropic Legacy. The Donor Advised Fund is similar to establishing a private foundation without the restrictions and excise taxes.
- Flexibility. The Heart of Illinois United Way Donor Advised Fund welcomes input from the donor as to the amount and timing of distributions.
- Tax Advantages. There are no forms to file with the Internal Revenue Service. The Donor Advised Fund qualifies for the highest charitable income and estate tax deductions allowed by law, while bypassing capital gains tax on gifts of appreciated assets to the fund.
- Professional Administration. Morgan Stanley GIFT manages and administers the donor advised fund accounts established by the Heart of Illinois United Way.
- Anonymity & Privacy. The Donor Advised Fund can be used effectively when the donor wishes to remain anonymous in supporting qualified charities as the fund is not subject to the public record, which means the fund will not be solicited by charities except through the donor’s own activity.
Frequently Asked Questions:
What is the minimum donation to establish a new Donor Advised Fund?
The minimum size for a new account is $25,000
What is the minimum donation for an additional contribution to an established Donor Advised Fund?
An additional contribution to an existing account must be valued at $5,000 or more.
What is the minimum amount that can be directed to a charity from the fund?
Each grant must be at least $500.
What types of assets can be contributed to a Donor Advised Fund?
Donors may make irrevocable and nonrefundable charitable gifts of cash and unrestricted stock. Other complex assets, such as real estate and private stock may be accepted on a case-by-case basis.
Access Your Donor Advised Fund
Have you already established your Donor Advised Fund and want to manage your charitable giving? Click here to access the secured Donor Advised Fund site.
For more information about the Donor Advised Fund, please contact Stephen Peterson, Vice President of Resource Development at 309-674-5181, ext. 1232.