Frequently Asked Questions for Donor Advised Funds

DAF = Donor Advised Fund

  1. What services does TCF provide to donor advisors?
    The Community Foundation (TCF) prides itself on providing superior service to its fund donors. Our role is to inform and enrich you and your family’s philanthropy.  With TCF, you can:
    • attend site visits
    • engage in educational opportunities
    • meet with other philanthropists
    • participate in giving circles
    • encourage your own family philanthropy through the Youth Philanthropy Project and family philanthropy meetings.

    We are here to serve our donors and invite you to take advantage of our services and welcome your inquiries at all times.

  2. What is the minimum value of a fund?
    The minimum amount required for a DAF is $10,000.  DAFs must maintain at least $10,000 at all times.
  3. How much does it cost to have a DAF?
    Each DAF pays a quarterly, unrestricted compensation to further TCF’s general charitable purposes.  This compensation is assessed on the DAFs prior quarter-end balance.  The annualized compensation rate on DAFs with a fund balance of less than $1 million is generally one percent (1%).    The minimum annual compensation to TCF is $350.  Funds of $1 million or higher are assessed at a lower rate.  The annualized compensation rate is .75% on the first $1 million and .50% on the additional amounts.   
  4. How does TCF calculate spendable income?
    Generally, the spendable income is determined annually based on a rolling 12-quarter market value average and up to 5% of the average market value is available annually for distribution and compensation to TCF.  Since 2005, TCF’s Board of Governors has established a 4.25% spending rule on TCF endowments, inclusive of compensation to TCF.
  5. Who invests the DAF assets and how are they invested?
    TCF has an investment partnership with the University of Richmond where its pooled assets are invested.   TCF adds any net gains, or deducts any net losses, from the investments to the DAFs fund balance on a quarterly basis.  You can view your gift and grantmaking history and fund balance through Donor Xpress which is generally updated 6-8 weeks after the end of each quarter. 
  6. Can I name my children as advisors to my DAF?
    Yes.  At the time the DAF is established, you may name one additional generation, usually your children, to serve as successor advisors.  These advisory privileges may not be reassigned.    
  7. What is the difference among an endowed fund, quasi-endowed fund and current fund?
    Endowed DAFs are permanent endowments that annually distribute a spendable income (approximately 3.25% to 5%) from which you can recommend grants.  Quasi-Endowed DAFs permit grantmaking from both the principal and net investment return subject to the $10,000 minimum balance.  Current funds are nonpermanent funds where principal is available for grantmaking.  TCF retains all investment earnings on current funds.
  8. How do I recommend a grant from the DAF?
    You may recommend grants online through our secure Donor Xpress service.  Alternatively, you can fill out a grant recommendation form provided by TCF and fax it to us at 804-330-5992.
  9. What is Donor Xpress?
    Donor Xpress is an online service accessed through our web site, www.tcfrichmond.org.  To get a Donor Xpress account, contact Marcia Flaherty, Donor Engagement Officer, or download the Donor Xpress Registration Form.  With Donor Xpress, you have 24/7 access and can:
    • Check the balance of a fund
    • Review a fund's gift and grantmaking history
    • Make grant recommendations
    • Review quarterly fund statements which are available generally 6-8 weeks after the quarter end
    • Research charitable groups through a direct link to Guidestar, a national database of nonprofit organizations
    • Participate in our community grants programs
    • Register for TCF events through the website
  10. Can I recommend grants to organizations outside of Virginia?
    Yes.  Grantmaking is not limited to Virginia.  TCF interprets its service to donors in a broad sense.  TCF recognizes that donors have interests that extend beyond our geographic boundary and TCF will generally approve grants to any qualified 501c3 publicly supported organization in the United States.
  11. Can I recommend grants to organizations outside of the U.S.?
    International grantmaking is permitted in accordance with IRS guidelines.  The Foundation’s preferred way to support foreign-based public charities is through a “friends of” organization that is a U.S. public charity or a U.S. public charity intermediary that does all due diligence and takes responsibility for the grant.  If you are uncertain about the legal status of the charity, it is advisable to discuss the details of the potential grant with TCF before making the recommendation.  International grantmaking must be at least five hundred dollars ($500).
  12. What is the minimum grant size I can recommend?
    The minimum amount of any one distribution is two hundred and fifty dollars ($250).
  13. When should I make my grant recommendations?
    Grant recommendations may be made anytime throughout the year. Grants are paid on or about the 1st and the 15th of each month, subject to TCF’s due diligence.  Due to the volume of grant recommendations received in the 4th quarter, TCF requests that fourth quarter recommendations be made no later than December 1st.
  14. Why do some grants take longer than others for the Foundation to pay?
    Each recommended grantee must submit proper documentation to ensure its public charity status and must be approved by the Board of Governors. Grant recommendations to organizations in the Central Virginia area that are frequent grantees will already  have documentation on file  and generally their grants will be made in the next grant cycle. Those organizations that are new to the Foundation require greater research and may take longer to process.  We will notify you of any delay in completing your recommendation.
  15. Can I make grant recommendations to satisfy personal pledges?
    No. The IRS strictly prohibits this type of activity.  When you are approached by an organization to make a pledge, we suggest that you use the following language to inform them of your recommendation to the Foundation:

    “THIS IS NOT A PLEDGE.  I will, however, recommend that a grant of $____ be made to your organization from the (name of fund) of The Community Foundation Serving Richmond and Central Virginia.”

    We will provide “this is not a pledge” labels for your use upon request.  This language can also be used to recommend multi-year commitments.  If you have any questions regarding the relevance of this rule to a recommendation you are planning to make, please contact us to discuss.
  16. Can the fund I advise make grants for which I receive benefits, such as tickets to an event, preferred parking or membership benefits?
    No. Again, the IRS strictly prohibits this type of activity. When you make a gift to The Community Foundation, we provide you with a letter that says “no goods or services were received for your gift.” This statement confirms to your accountant and to the IRS that the full amount of your gift is tax-deductible. Financial penalties apply if you or a related party receive more than ‘token benefits’. The law also bars grants, loans, compensation and similar payments from donor advised funds to donors, advisors and related parties.
  17. Can I recommend grants to assist an individual in need?
    No.  The IRS strictly prohibits donor advised funds from engaging in this type of activity.
  18. Can I be recognized personally for recommending a grant?  Can I remain anonymous?Yes.  The letter accompanying a grant check asks the grantee organization to recognize the donor as the XYZ Fund of The Community Foundation. We also ask the grantee to give recognition to Mr. and Mrs. XYZ, if it is their policy to do so.   You may also remain anonymous if you wish. 
  19. What happens to the DAF when all advisors die?
    Unless otherwise provided, upon the death of all advisors, all future distributions will be used for TCF’s unrestricted use in the community.