The following is intended to answer some of the most frequently asked questions about donor advised funds, and inform you about important rules and restrictions at Equality Virginia:
Donating through a DAF limits the donor benefits you may receive. Because a full tax deduction is received at the time of establishing the DAF, donors may only receive “incidental” benefits, or benefits which do not carry a fair market value. The Symphony’s Donor Relations team can share which donor benefits you may receive when you donate through a DAF.
The U.S. Pension Protection Act of 2006 establishes certain restrictions applying to donor advised funds. It’s important to be aware of these to make sure that a donation through a DAF meets your needs and charitable intent. The restrictions that most often impact donors concern pledges (new and existing), providing multi-year support and accepting donor benefits.
When a DAF is established, the donor may recommend but not legally direct future charitable grants. As the donor has given up legal ownership of the fund, they are prohibited from making a legally binding pledge from their DAF to the charity they want to support. In addition, donors may not fulfill existing pledges through their DAF. Equality Virginia recommends that donors notify us of their intent to recommend a grant, as it assists us with future planning. Suggested wording is: “I intend to recommend a grant of [amount] from a donor advised fund (DAF), and this notification is not a legally binding commitment.”
Special Event Tickets and Donations
Donors wishing to support Equality Virginia through special events such as the Opening Night Concert & Gala, Holiday Musical Salute or Club Ludo should be aware of the following:
Event tickets and tables, as they have substantial fair market value, may not be purchased through a DAF. An exception to this is when the donor will not attend the event and the entire table or seat is to be donated back to Equality Virginia .
Event donations through your DAF are welcomed. Your event donations, including raise-the-paddle donations can be made through a DAF. Notify Equality Virginia and contact your fund’s sponsoring organization to clarify any required language to recommend the grant. (Most often recommendations specify that the donor has paid for an event ticket or table out of pocket).
Here are some other Frequently Asked Questions:
Yes. When establishing a DAF, a qualified charity such as Equality Virginia may be recommended to receive any remaining balance in the DAF upon the death of the donor.
Yes. The U.S. Pension Protection Act of 2006 imposes an excise tax on any donor, donor-advisor or family member who recommends a grant that results in “more than incidental benefit.” The sponsoring agency can be penalized as well.
No. Due to IRS restrictions, reimbursing a charity to receive benefits and services (“bifurcation”) is not permitted.