Establish a donor advised fund



                                      Donor Advised Funds – a Very Effective Vehicle for Charitable Giving


A donor can establish a donor advised charitable fund to support his or her favorite charities and community causes and have the flexibility to determine who receives their charitable gifts every year. A donor advised fund is the most popular philanthropic vehicle used across the nation by community foundations. Donor advised funds make a positive impact in communities because they support causes as diverse as education, health, human services, youth development, recreation, parks, trails and green spaces, historic venues, arts and culture.


A donor advised fund works like a private foundation without all of the legal costs and extra taxes and reporting requirements. Unlike a private foundation, a donor advised fund does not require minimum annual distributions. A donor advised fund is a charitable giving vehicle administered by a community foundation and created for the purpose of managing charitable donations on behalf of an individual, family, business or organization. Donor advised funds are one of the most efficient charitable giving tools available. Few charitable giving options provide the flexibility and convenience along with the full tax advantages associated with charitable giving that donor-advised funds offer.  Donors can enjoy administrative convenience, cost savings and tax advantages by conducting their grant-making through a donor advised fund.


Community foundations pioneered the development of donor advised funds, and they are now the fastest growing charitable giving vehicle in the United States. The Fort Dodge Community Foundation and United Way can provide donors with this opportunity.


Advantages Provided by Donor Advised Funds

Giving back to your community

Many donors care deeply about their community and charitable organizations that serve it well and want to see their community grow and prosper today and in the future. A donor advised fund is a simple, flexibly and impactful way for donors to support public and charitable causes and organizations in their community.


Enjoy an immediate tax deduction

Contributions are fully tax deductible in the year they're made.  Donors will receive the maximum tax benefits for their charitable contributions under federal and state tax law.  (Donors should always consult with their tax professional to determine the actual value of their deduction.)


Flexible support
Donor advised funds offer the flexibility to contribute to a charitable organization as long as one desires, but if situations change; donors have the flexibility to change their support for that organization. When donors give a major gift directly to a nonprofit organization, their gift is irrevocable. When they give through a donor advised fund, their gifts can change every year, at their recommendation. In addition, donors can grant to multiple organizations from one donor advised fund. This flexibility is very appealing option to philanthropically inclined citizens.


Separate tax planning and charitable decisions

Immediate tax advantages through contributions can be achieved now and grants can be recommended to charities later. Donor advised funds can help eliminate the year end pressure to select charities and make grants.


Donate appreciated securities tax free

Donors can give appreciated securities to their donor advised fund and immediately deduct their fair market value from their taxes without incurring any capital gains liability.  (Donors should always consult with their tax professional to determine the actual value of their deduction.)


Donate real estate, farmland or other personal property
Donors can donate real estate, farmland or other personal project to their donor advised fund and deduct receive attractive tax advantages. For example, long-term capital assets may be ideal for charitable gifts because assets such as stock, real estate, and farmland may receive a double federal tax benefit. First, donors can receive an immediate federal income tax charitable deduction. Secondly, assuming the asset is owned for more than one year, the donor can avoid long-term capital gain taxes on the appreciation of the donated asset.  (Donors should always consult with their tax professional to determine the actual value of their deduction.)   


Record keeping made easy

Donor advised funds provide consolidated reporting and record keeping. Donors receive quarterly fund reports that clearly show all transactions and the investment performance of their fund. There is no need to draft trust documents or file an individual tax return for their fund. 


Accounting of the fund

The Community Foundation will handle all accounting of the funds including interest and dividend income, contributions, distributions, and realized and unrealized capital gains.  Donors receive a comprehensive quarterly financial report on their fund.


Tax filing and auditing of the fund

The donor advised fund is fully covered by the Community Foundation’s non-profit status and IRS tax exemption. The fund’s annual tax filing is handled by the Community Foundation at no additional cost and all funds under the Community Foundation are audited every year.


Create a legacy of giving

Donors can establish a legacy gift to honor their family or a loved one who deeply cared about his/her community or specific charities in their community. And, donors have the ability to select successors as advisors to their fund who can continue their charitable legacy by recommending grants beyond the donor’s lifetime.

Endow Iowa Tax Credit
If the donor advised fund is established as an endowed fund, the donor will receive an additional tax benefit – the Endow Iowa 25% tax credit. This is a very attractive opportunity for donors who are interested in receiving the maximum tax savings on their charitable giving.  The cost for a donor in a 30 percent tax bracket on a gift of $100,000 would be just $45,000 (the donor would receive a 30% federal tax deduction and an additional 25% Iowa tax credit on his/her gift).

If donors prefer, the Fort Dodge Community Foundation can make grants anonymously from the donor advise fund, so their name will not be known.

Fund management
Donors can use the professional investment management services through the Fort Dodge Community Foundation for their fund or they can use a qualified investment manager of their choosing to manage their donor advised fund’s investments.

No need for a private foundation
A donor advised fund is similar to a private foundation but does not have the costs, the taxes and the extra reporting requirements associated with private foundations. Establishing a donor advised fund is a simple process that requires no set up fees or legal and accounting costs.


No legal or accounting fees

No legal or accounting fee, or set up costs are required to establish a donor advised fund with the Fort Dodge Community Foundation. The signing of a simple agreement is all it takes.



For more information on donor advised funds and how they can help you meet your charitable goals and interests, contact the Fort Dodge Community Foundation. Randy Kuhlman, C.E.O., will be happy to meet with you and answer any questions you may have and assist you in establishing a fund.




Fort Dodge Community Foundation

24 North 9th Street Suite B

Fort Dodge, IA  50501

                                                                                                                                         Phone: 515-573-3171