Frequently Asked Questions

 

If you still have questions, call us at 1- 330-655-1566

 

 

1. What types of assets are eligible for contribution to a Donor Advised Fund?
In addition to cash and publicly traded securities, HCF can accept closely held stock, life insurance policies, and real estate.

 

2. Another donor advised program I saw required that contributed assets be immediately sold. Does HCF have such a requirement?
No. Upon review, HCF can hold assets in-kind. When they are eventually are sold, you recommend how you would like to reinvest the proceeds.

 

3. Can my financial advisor be involved in investing my Fund?
Yes. You can recommend that we work with your financial advisor to determine how the assets in your Fund will be invested, and invest in a broad range of securities, including individual stocks, bonds, and mutual funds.

 

4. Can I name my Fund as beneficiary of my charitable remainder trust?
Yes. As a public charity, HCF can be named as a CRT remainderman.

 

5. Can my children succeed me as advisor of my Fund?
Yes, you can name anyone you want as successor advisor. Simply name your successor advisor in the Disposition section of the Fund Application. If you want to name more than one successor advisor, please identify who will serve as spokesperson of the group.

 

6. What types of organizations are eligible to receive grants?
HCF can make grants to any US-based, tax-exempt 501(c)(3) charitable organization (other than non-operating private foundations). If you have any question, please call.

 

7. Can I use my Fund to pay off a pledge I made to my college?
No. Unfortunately, tax regulations prohibit grants that satisfy personal pledges.

 

8. Can I make an anonymous grant?
Yes. If you request anonymity on the Grant Recommendation Form, HCF will make the grant without disclosing your identity to the grantee organization. This can be done selectively or for all grants.

 

9. What are HCF’s administrative fees?
HCF incurs expenses in operating your Donor Advised Fund. These include Donor services, phone support, mailed notices, statements and communications, grants administration, and online services. To cover the costs associated with these services, the Fund assesses an account administrative fee, outlined below:

Asset Value

Fee

First $500,000

1.00%

Next $500,000

.75%

Next $1,500,000

.50%

Over $2,500,000

.25%

Fees are charged directly to your Donor Advised Fund.



10. What Are the Contribution and Balance Requirements?
Individuals, as well as organizations or businesses, can open an account with a minimum of $10,000. After the initial contribution, you may make contributions of $500 or more at a time.


11. What Types Of Statements Will I Receive?
We will mail you quarterly statements that itemize the contributions made into your account and list the value of your account. This letter also serves as your receipt for tax purposes. If you recommend a grant to charity, you will also receive a copy of the letter we mail to the charity with the grant check, once the grant is approved.

 

12. Can I Plan For A Successor on My Account?
Yes. We encourage our donors to see their account as a vehicle with which to leave a lasting legacy of giving. You may name one or more designated individuals as the successor(s) on your account, to take over as donor-advisors when you are no longer able to, or no longer want to.
Alternatively, you may designate a specified charity as the beneficiary, and the account will be distributed to the charity.

 

13. How Can I Get My Children Involved?
With proper guidance from an adult, you can get involve your children or grandchildren immediately. If you children are of legal age, you can engage then as donor-advisors on your account. In that capacity, they can recommend grants to charities and will receive copies of all statements and newsletters. If you would like to name your children to succeed you as donor-advisor to the account after your death, you can name them as successors of the account.



14. Can I Contribute Assets From An IRA?
You may designate your Donor Advised Fund as a beneficiary to a portion or all of your IRA. There is pending legislation (not yet enacted) that would allow IRA distributions to charity to be tax-free at age 70 1/2. We encourage you to consult with a qualified tax attorney to discuss the tax consequences of utilizing an IRA for charitable giving.


15. How Do You Determine The Fair Market Value Of My Contribution?
Fair Market Value (for purposes of the charitable contribution deduction) is determined on the date that contributions are received by the Fund. In the case of contributions of stock, Fair Market Value is the average of the high and the low for the day that the assets were received by the Fund. In the case of contributions of mutual funds, Fair Market Value is the closing price on the date of receipt. Securities are typically liquidated the following business day after receipt, so the Fair Market Value for tax purposes may be different from the amount of sales proceeds credits to your Donor Advised Fund.


16. How Long Will It Take For My Contribution to Appear in My Account?
Typically, your account is open and funded within 24 hours from the receipt of your contribution. On some occasions (particularly if assets are being transferred from a financial institution to another.), the process can take from two to six weeks. If the assets are coming from another financial institution and you are concerned about timing, we recommend you contact your broker and encourage the firm to expedite the transfer.


17. Will I Receive A Receipt for Tax Purposes?
Yes. Contribution statements are mailed for each contribution. You will also receive an annual summary in January.


18. Can I recommend investments?
Yes, and you can recommend an independent investment advisor to provide investment management for the account, as well. HCF must approve the advisor to manage the assets in your account. Assets may be invested in a wide variety of publicly traded securities, including stocks, bonds, and mutual funds, in any combination.


19. Do You Sponsor A Pooled Income Fund or Gift Annuity?
No. At this time we have chosen to focus our efforts on ensuring the simplicity and efficiency of our Donor Advised Fund.


20. Will I Receive Any Income?
No. All account earnings accrue within your Donor Advised Fund, thereby increasing the amount that you can recommend for grants to public charities. The earnings in the Fund do not increase any tax deduction you can claim for contributing to the account, since you receive your deduction at the time of contribution. Distributions from the account — whether of principal or earnings — can be made only to qualified charitable organizations.


21. How Do I Recommend A Grant?
We will supply you with Grant Recommendation Forms when we acknowledge your contribution.  You can fill it out and fax or mail it to us.


22. What Does It Mean to “Recommend” Grants?
Tax laws require that your charitable contribution must be irrevocable and unconditional in order for you to receive the associated tax benefits. Any assets contributed to the Fund belong to HCF and you have relinquished control of them. However, your role as donor advisor to those funds does allow you to recommend how the funds are invested and distributed.


23. Do You Have A List Of Approved Charities?
Grants can be made to any IRS-approved public charity. Approved organizations are U.S.-based organizations that qualify as tax-exempt under Section 501(c)(3) of the Internal Revenue Code and are public charities as defined by Section 509(a) of the code. HCF provides you the ability to research through CharitySearch, from GuideStar®, a database of over 1 million IRS-registered 501(c)(3) non-profit organizations. Note: All grant recommendations are subject to approval of the Fund.


24. Is There A Minimum Grant Amount?
$250 is the minimum grant amount.


25. When Will The Charity Receive The Grant?
If we have worked with the charity before, the check will ordinarily be issued within five business days. If we have not granted to the charity before, we perform due diligence on your behalf. In this case the check is typically issued within 10 business days.


26. Will The Grant Check Have My Name On It?
The check will bear the name of Hudson Community Foundation; however, the accompanying letter will recognize the donor or account name (per your instructions) who recommended the particular grant. You may also remain anonymous if you wish.


27. Will I Receive Confirmation When A Grant is Made?
You will receive a copy of the letter sent to the charity along with the grant check. If for any reason the grant was unable to be issued, we will contact you by phone as quickly as possible.


28. Why Would A Grant Be Declined?
HCF takes great care to comply with all laws governing charitable gift giving and all IRS guidelines affecting Donor Advised Funds. The Fund will not approve any grants that:

  • Are directed to a charity not based in the United States;
  • Fulfill a donor’s pre-existing pledge to an organization;
  • Provide benefit to the donor or individual;
  • Support lobbying, political campaigns or other political activities;
  • Support a charitable event that would constitute a quid-pro-quo arrangement (e.g., tickets for a fundraiser dinner.)