FAQs

Creating a Donor-Advised Fund Account

Why is it called a Donor-Advised Fund (DAF)?

Donor-Advised Funds are named as such because the donor retains discretion on how their gifted funds and assets are allocated to charity. To be recognized by the IRS as a charitable gift and receive a tax deduction, all donations to a Donor-Advised Fund must be irrevocable. This means once the cash or assets are gifted, they cannot be withdrawn or directly controlled by the donor.

Assets contributed to a DAF are solely owned by the sponsoring organization which has a legal responsibility to ensure that assets are used exclusively for charitable purposes. The sponsoring organization will endeavor to honor the donor’s intent as closely as possible while working to maximize the charitable gift.

Donors retain advisory privileges over the assets in the DAF account. This includes selecting the charities they would like to support and making investment suggestions. For donors who choose to spread their gift funds to several organizations at a time, a DAF allows the donor to recommend grants to each qualified organization while only having to track gift receipts for contributions made to the DAF. Many prefer this streamlined process which reduces administrative costs compared to private foundations.

How long does it take to set up a Donor-Advised Fund account?

It takes less than a day to open a DAF with GlobalTrust Funds. Simply submit a completed Donor Application and your account will be established and ready to receive your charitable gift.

How much will I need to set up a Donor-Advised Fund account?

To open a Donor-Advised Fund account with GlobalTrust Funds, an initial contribution of $10,000 or more is required. Once your account is established, you can make subsequent contributions in any amount at any time.

Other than cash, what assets can I donate to my DAF?

Aside from donating cash, other assets that can be donated to your DAF include personal property, real estate, securities (stocks, mutual funds, ETFs), life insurance, partnership interests and alternative investments. Please contact GlobalTrust Funds for a review of your non-cash gift to determine if it is suitable.

Another benefit of using a DAF is the ability to assist smaller charities in receiving funds they otherwise may not be able to accept. Many smaller charities do not have the ability to liquidate complex assets, such as securities or real estate, and may sadly turn down gifts that would be meaningful for their cause. GlobalTrust Funds has the capacity to turn your complex assets into usable funds for the organizations you wish to support.

What are the tax benefits of donating charitable funds to a DAF?

Donors may lower their taxable estate and avoid or reduce substantial Capital Gains Taxes by making a charitable contribution to their Donor-Advised Fund. Even if estate taxes are not a consideration, the use of a DAF is a powerful vehicle to maximize one’s Lifetime Gifting Exemption.

In 2024, the exemption is $13.61 million for an individual and $27.22 million for those married filing jointly. Our experienced planners can help ascertain how to put this exemption to work for you.

When should I put my Donor-Advised Fund to work?

A Donor-Advised Fund is designed to be used at any point in time, at any stage of a donor’s philanthropic journey. DAFs allow charitable gifts to be made at times most appropriate for the donor, and defer the need to select a charity right away. Many donors appreciate the flexibility in timing so they can truly explore the causes that speak to their heart.

Many donors find DAFs especially useful for streamlining their giving during periods of increased charitable activity, such as immediately after a natural disaster. It is also very common to donate at year-end, when many nonprofit organizations are fundraising to meet year-end goals. Other appropriate times include during the process of filing taxes, doing estate planning, legacy planning or just prior to selling a business.

What should I name my Donor-Advised Fund account?

Donors commonly choose names that reflect the main purpose of the account, such as “The McAdams Fund,” if they plan on issuing grants to a specific organization. Many donors name their DAF after their children or family name, while others choose something inconspicuous to help remain anonymous. The beauty is that you may name your DAF essentially anything you please.

Can children be involved with my Donor-Advised Fund account?

Absolutely. Children can be named as successor advisors to your account, but there is nothing preventing them from having input as informal advisors. They can legally assume these roles as soon as they are 18 years old.

We often assist donors who gift up to the annual exclusion of $18,000 for an individual or $36,000 for married couples, and create DAFs for their children and grandchildren to help cultivate generosity in the next generation. Much like naming a beloved pet, children take great joy in naming their DAF and being allowed to select which causes to support. GlobalTrust Funds welcomes the opportunity to discuss generational wealth transfer and can offer guidance on developing a family legacy and giving strategy.

How do I choose which organization should receive a grant from my Donor-Advised Fund account?

At GlobalTrust Funds, donors have a variety of charitable organizations to choose from. Some donors come to us with causes in mind, while others choose from one of the many organizations we have established relationships with. You may choose one or several charitable organizations to receive a grant from your DAF. GlobalTrust Funds will facilitate the grant writing for you and provide you with a charitable gifting receipt.

Managing a Donor-Advised Fund Account

How are my Donor-Advised Fund assets invested?

At GlobalTrust Funds there are several ways a donor’s assets can be invested. Although discretion is ultimately up to the sponsoring organization, every effort is made to honor the wishes of the donor.

Donors can choose from best-in-class social impact investment strategies that produce great impact in communities around the world. We have worked through the due diligence process and invest the charitable capital in select social entrepreneurs and businesses to create sustainable societal and economic benefit. When profitable businesses are sold, the investment capital is returned to GlobalTrust Funds for reinvestment into new projects.

In addition, should a donor look to invest in something specific, we are often able to accommodate the request. Sometimes we create something entirely unique. If this appeals to you, please contact our team so we can better understand your vision.

What types of fees are charged to my Donor-Advised Fund account?

GlobalTrust Funds charges charitable administration fees. These fees cover grantmaking, recordkeeping, annual audits, tax filing, quarterly statements, insurance and various other operating expenses. GlobalTrust Funds Board of Directors determines the amount of these fees by applying a blended schedule against the average daily balance of your account at the end of each month. Other fees include, but are not limited to: fees for grant agreements or international grants recommended by the donor; illiquid gift processing fees; real estate sales related expenses, and (for some DAF accounts) in certain cases a fee may be paid to financial advisors.

What happens to my DAF if no successor advisors are selected?

If there are to be no successor advisors designated on your account, you may designate one or more charitable organizations as account beneficiaries. If you indicate neither charitable beneficiaries nor successor advisors to your DAF account, GlobalTrust Funds will annually distribute 5% of your account’s balance to the charitable organizations that you have previously designed to receive grants from your DAF. If you have not recommended grants, the Donor-Advised Fund account’s entire balance will be transferred to the GlobalTrust Funds Giving Fund.

Can GlobalTrust Fund help me develop a philanthropic plan?

Yes we can. GlobalTrust Funds can offer guidance in creating a philanthropic and social impact investment strategy for all new donors, and can support experienced philanthropists in developing a plan to maximize their charitable impact. We can also work collectively with your legal, tax and financial advisors to bring your wishes to fruition.

What types of assets can be donated?

GlobalTrust Funds accepts a wide range of financial assets, from cash and checks to stocks and even non-publicly traded assets like private business interests. Turn your assets into a life-changing impact around the world.

Stocks and other securities:

Publicly traded stocks
Mutual fund shares
Bonds

Privately held business interests:

Private company C-corp stock
Private company S-corp stock
LLC & Limited Partnership interests
Private equity
Hedge fund interests
Pre-IPO shares

Other non-publicly traded assets:

Restricted stock
Life insurance
Bitcoin and other cryptocurrencies
Retirement assets
Oil & gas royalty interests
Art Collections
Aircraft and Yachts

Precious Metals and Gems :

Gold
Silver
Diamonds and other precious gems
Estate Jewelry