DAF Guide

INTRODUCTION

DonateWell offers a national donor-advised fund (DAF) program that provides individuals, families, groups, nonprofit organizations, and business entities a simple, flexible way to consolidate and manage charitable-giving activities.

ABOUT THIS GUIDE

This Program Guide (“Guide”) describes in detail the purpose, policies, and procedures of the Donor-Advised Fund Program (“Program”) of DonateWell (“Fund”). All Program activities and participants are subject to the terms and conditions of this Guide.​

The Program is governed by an independent Board of Directors (“Directors”), which reserves the right to modify the Program and Guide at any time, subject to the provisions of the Articles of Incorporation and Bylaws of the Fund. Copies of the Articles and Bylaws are available upon request.

The Guide provides information that is general and educational in nature and is not intended to be and should not be construed as legal or tax advice. Also, the Guide is not intended to be used, and cannot be used, for the purpose of avoiding tax penalties under the Internal Revenue Code.​

Questions about the Guide and any related issues can be emailed to info@donatewell.org.

ABOUT DONATEWELL

DonateWell is organized and operated exclusively for charitable purposes. Specifically, the Fund was established to receive, process, manage and distribute charitable donations as part of a national donor-advised fund program provided in cooperation with Good Done Great. Please note that all financial transactions between Good Done Great and DonateWell are conducted at arm’s length and subject to the approval of the independent Directors.

ABOUT DONOR-ADVISED FUNDS

Conducting charitable giving activities through a donor-advised fund (DAF) is a well-established approach for individuals, families, groups, organizations, and companies that want to:

  • take an immediate federal income tax deduction, to the extent allowed by law, when contributions are made to the DAF, even if the money is not distributed to IRS-qualified public charities until subsequent years
  • consolidate and simplify donations through a charitable giving account that provides flexibility, administrative convenience, cost savings, and tax advantages
  • remain anonymous or otherwise determine how to be recognized for donations made through the DAF

Contributions to a DAF are irrevocable and all DAFs are owned or controlled by a sponsoring organization, which must be a public charity. The donor, however, has advisory privileges on the distribution of funds, as is the case with DonateWell.

ESTABLISHING A DONATEWELL DAF ACCOUNT

Before opening an account with DonateWell, please carefully read this Guide to fully understand the policies and procedures of the Fund’s DAF Program and discuss charitable giving plans and strategies with a tax advisor. Questions can be emailed to info@donatewell.org.

ELIGIBILITY

Individuals (age 13 and older), families, groups, nonprofit organizations, business entities—even other donor-advised funds—are eligible to open an account. Trusts and estates are currently not eligible. At this time, there is no open enrollment for the general public, as this program is only open to employers.

APPLICATION

Eligible individuals or entities (as described above) may sign up for an account through our partner Good Done Great—with or without contributing funds. At this time, there is no open enrollment for the general public, as this program is only open to employers.

ACCOUNT NAME

By default, the Fund will assign an account number to use as the account identifier. However, the Primary Account Holder may name—and later rename—the account. The account name should always begin with the word “The” and end with the word “Fund.” The legal terms “Trust,” “Foundation,” or “Endowment,” the use of which are reserved for other charitable-giving vehicles, cannot be used in any account name.

The account name might acknowledge your own name(s), someone or something else, and/or the charitable cause. Examples include The Smith Family Fund, The John Jones Memorial Performing Arts Fund, and The XYZ Corporate Philanthropy Fund. DonateWell reserves the right to require changes to any Account Name at any time for any reason.

OWNERSHIP

DonateWell accounts are donor-advised funds, and as such, the accounts are owned by the Fund. Donors and other authorized parties on the account may recommend distributions, called grants, to charitable organizations.

ROLES, RESPONSIBILITIES, AND PRIVILEGES

Each account is associated with one or more persons who fulfill one or more roles, with each role entailing specific responsibilities and privileges. The Fund may modify or terminate roles, responsibilities, and privileges upon 30-day notice at the email address on record for the Primary Account Holder.

Please note that privileges associated with each role can be exercised independently of anyone else. That is, joint approval is not required. Therefore, we would urge you to exercise caution in the appointment of any roles with transactional authority.

PRIMARY ACCOUNT HOLDER

The Primary Account Holder is usually the individual or entity that opens and funds a DonateWell DAF account, although this responsibility can be transferred. Through the Good Done Great website, the Primary Account Holder may contribute money to the account, recommend distributions (called grants) to eligible beneficiaries, and view all account activity. Other privileges include appointing and removing Additional Account Holders, Additional Advisors, Additional Donors, Successors, and Interested Third Parties. The Primary Account Holder is also the main recipient for all correspondence, with the exception of tax-substantiation receipts emailed to Additional Donors.

ADDITIONAL ACCOUNT HOLDERS

The Primary Account Holder can share some responsibilities and privileges with up to four Additional Account Holders, each of whom will choose or be assigned a separate username and password. Additional Account Holders can contribute money to the account, recommend grants independent of the Primary Account Holder, and view all account activity. They may also appoint or remove Additional Donors (but not the Primary Account Holder, Additional Account Holders, Additional Advisors, or Successors). If authorized by the Primary Account Holder, Additional Account Holders may also elect to receive the same email correspondence as the Primary Account Holder.

ADDITIONAL ADVISORS

Additional Advisors, each of whom chooses or is assigned a separate username and password, may recommend grants independent of the Account Holders and view all account activity. If authorized by the Primary Account Holder, Additional Advisors may also elect to receive the same email correspondence as the Primary Account Holder. Additional Advisors may not appoint or remove others to the DAF account and generally will not contribute to the account.

ADDITIONAL DONORS

By default, anyone can contribute to a DAF account. However, if desired by the Primary Account Holder, contributions can be restricted to a group of specifically named Additional Donors. Alternatively, the Primary Account Holder may continue to allow anyone to contribute to the DAF account, but name Additional Donors who will receive differentiated targeted communications or have the privilege of using special online tools and features.

SUCCESSOR​

The Primary Account Holder should name an individual or entity to serve as a replacement upon the death, incapacity, or resignation of the Primary Account Holder. At such time, if no Successor has been identified or no named Successor accepts the responsibility, any remaining balance will be transferred to the DonateWell General Fund and used or distributed at the discretion of the Trustees.

Account privileges are granted to a Successor only after the Fund receives and accepts proof of the Primary Account Holder’s resignation, incapacity, or death and the Successor accepts the responsibility and terms. At such time, the Successor will become the Primary Account Holder with all of the commensurate responsibilities and privileges.

CONTRIBUTIONS

Contributions can be made when an account is opened, as a grant is recommended, or at any other time. When a contribution is received from a Donor without an account, an account will be created automatically for the Donor, as long as the Donor agrees to the terms and conditions outlined in this Guide.

CONTRIBUTIONS ARE IRREVOCABLE AND UNCONDITIONAL​

Contributions are not refundable and are assets owned and held by the Fund. The Fund retains exclusive legal control over all contributed assets and any future related earnings.​

Furthermore, Donors cannot impose conditions or other restrictions that prevent the Fund from freely and effectively using the contribution to further its charitable mission and comply with all legal and regulatory requirements.

ELIGIBLE TYPES OF CONTRIBUTIONS

The Fund accepts cash and cash equivalents in US dollars, drawn from US financial institutions, and delivered by electronic funds transfer, payroll deduction, debit card, or credit card.​

The Fund reserves the right to review and reject any contribution to the Program for any reason whatsoever. Any contribution that is not accepted will be returned as soon as possible.

MINIMUM CONTRIBUTIONS

No minimums apply to the initial contribution or to any subsequent contributions.

PROCESSING CONTRIBUTIONS

The Fund generally processes contributions on the same day the funds are received unless it is a weekend or bank holiday. Funds processed by partners made be subject to a different schedule per the partners terms. The Fund is not liable for the failure to complete an electronic funds transfer or other Donor instruction.​

CONFIRMING CONTRIBUTIONS

The Program will email a receipt for any funds received on the same day, or within a few business days after the funds have cleared unless the giving was done through a partner, in which case the partner may be issuing a receipt on behalf of DonateWell. The email will serve as a substantiation letter, gift receipt, or tax receipt and should be retained for tax reporting purposes. Donors should read all confirmation letters carefully. Any errors must be reported immediately to the Program.​

Primary Account Holders may receive notification of third-party contributions, such as an employer match, but such notification is not a tax receipt.

TAX CONSIDERATIONS

This Guide is not intended to provide legal or tax advice and considers only US federal taxes. Rules and regulations regarding tax deductions for charitable giving vary at the state level. DonateWell strongly encourages Donors to consult with a qualified tax advisor for guidance on how charitable giving will impact their federal, state, and local tax liability.

CHARITABLE DEDUCTIONS

DonateWell donor-advised fund program is eligible to receive tax-deductible contributions. In general, a Donor who itemizes deductions on a federal tax return may claim a contribution to a DAF account as a deduction in the year the contribution is made, subject to certain limitations. With the exception of contributions, however, DAF account activity has no impact on any Donor’s tax liability. Because the Fund owns the assets once they have been contributed to a DAF account, for example, any investment gains or losses or interest accrued by that account will have no tax consequences for Account Holders. In addition, grants subsequently made from a DAF account to a charitable organization are not tax deductible, as the deduction was already taken when the contribution was made to the DAF account.

Please also note that Account Holders may not claim a tax deduction for contributions to their account(s) by other Donors, such as an employer match, or a gift card.

DEDUCTIBILITY​

With cash and cash equivalents, a Donor is entitled to claim the exact amount of the contribution as a deduction.

ESTATE PLANNING​

Contributions to the Program and any associated earnings are not part of a Donor’s taxable estate and are not subject to either estate tax or probate. Any balance that remains in a DAF account upon the Primary Account Holder’s death may not be appointed, transferred by will, or bequeathed to any person or organization.

RECOMMENDING GRANTS

Once a DAF account has been funded, Donors and Advisors can recommend grants at any time to any of more than one million qualified 501(c)(3) public charities. This section details important guidelines and instructions that apply to the grant recommendation process.

RECOMMENDING A GRANT

Donors may make grant recommendations on DonateWell.com or on a DonateWell partner site.

GRANT REVIEW AND APPROVAL OR DENIAL

To ensure that all funds are issued exclusively in furtherance of charitable purposes to qualified charitable organizations, all grant recommendations are subject to review and approval by DonateWell’s Directors. DonateWell’s Directors have ultimate authority over all grant distributions. Grant requests are nonbinding and will not be approved until, among other considerations, DonateWell has verified the recipient organization’s current tax-exempt status as defined by Section 501(c)(3) of the Internal Revenue Code and its status as a public charity as defined by Section 509(a)(1), (2), or (3).​

DonateWell may contact prospective grant recipients to obtain information about their charitable activities before approving a grant recommendation. DonateWell, at its sole discretion, may also perform additional research when it has reason to believe that grant funds may result in private benefit to an Account Holder, Additional Advisor, or related party, or that the grant would violate DonateWell policies. DonateWell reserves the right to take appropriate legal action if it determines that grant funds have been knowingly used improperly.

ADDITIONAL DUE DILIGENCE

Please be advised that in the case of certain grant recommendations, DonateWell reserves the right to perform additional due diligence and to decline to make the recommended grant in such cases where:

  • the grant will confer a more than incidental benefit on any Account Holder or other related third party
  • the grant will be used for lobbying, for political contributions, or to support political campaign activities
  • the grant will be used for improper purposes
  • the Primary Account Holder or related persons control the organization
  • DonateWell provides a substantial portion of the organization’s public support
  • dictated by other reasons in accordance with DonateWell policies

In such cases, remedial actions may include but are not limited to requiring that the grant be returned or that the Primary or Additional Donors make an additional nondeductible contribution.

If DonateWell discovers that grants have been made for improper purposes, it will take remedial action. This may include, but is not limited to, a requirement that the grant recipient return the grant and/or the termination of Account Holders’ or Advisors’ privileges and the transfer of account assets to the Fund’s General Fund.

If a charity or its principals are under investigation, the Program reserves the right to freeze any granting to that charity until the investigation is resolved.

DonateWell will not approve grant requests for amounts greater than the available balance in the Account Holder’s DAF account.

If a grant recommendation is not approved, DonateWell will notify the Primary Account Holder, explain the reason(s) for denying the request, and suggest an alternative solution to satisfy the Account Holders’ philanthropic intent. Account Holders and/or Advisors may also decide whether to submit an alternative grant recommendation.​

In the event of several grant requests that violate the Program’s guidelines, DonateWell reserves the right to transfer account assets to the General Fund.​