NPT Donor-Advised Funds: FAQ

Individuals, families, companies, foundations, and other entities can start a donor-advised fund account by contributing assets.

To start a donor-advised fund account with NPT, you will need to make a contribution of $25,000 or more. Once your account is established, you can make subsequent contributions of $5,000 or more.

Yes. You can choose any name for your donor-advised fund account. You can even call it a Foundation. Most donors choose a name that reflects the main purpose of the account such as “The Smith Educational Fund.” Some donors select a name that helps them remain anonymous.

At NPT, it takes less than a day. Once you submit a completed donor application, your account is established and ready to receive contributions.

Yes. You can name them as an advisor or successor advisor to your account. They can legally assume these roles as soon as they are 18 years old.

Yes. Your account assets can be split between multiple successors. Or, you can have your successors share in the advising responsibilities. Also, your successor advisors can name their own successor advisors. At NPT, there are several ways that your donor-advised fund account can exist in perpetuity.

At NPT, you can choose an investment strategy from a variety of "best-in-class" options. Also, if you contribute $10 million or more, you and your advisor(s) can create a highly customized, NPT-approved investment plan.

Charitable administration fees are charged. These fees cover grantmaking, recordkeeping, annual audits, tax filing, quarterly statements, insurance and various other operating expenses. NPT determines the amount of these fees by applying a blended schedule against the average daily balance of your account at the end of each month. Other fees include the asset management and, for some donor-advised fund accounts, a fee to financial advisors.

You can designate one or more charitable organizations as account beneficiaries. Or, you can distribute the account's assets to one or more charitable organizations. If you don't select either option, NPT can annually distribute 5% of your account's balance to the charitable organizations that have previously received grants. If you have not recommended grants, the donor-advised fund account's entire balance will be transferred to the NPT Giving Fund.

NPT accepts the widest range of assets of any charitable organization. These include:

• Cash
• Publicly traded securities including stocks, bonds, mutual fund shares
• Restricted and controlled stock
• Privately-held stock
• Real estate
• Proceeds from life insurance or from a full-paid policy
• Private foundation grants or terminations
• Bequests
• Named beneficiary of charitable remainder trust
• Named beneficiary of an IRA, 401(k), or other retirement account
• Tangible personal property

NPT strongly encourages you to consult with your tax advisor or attorney before making a charitable contribution.

A contribution becomes a donation when the asset is “out of the donor’s control.” This is determined by the type of asset you contribute, when and how it is transferred to your NPT donor-advised fund account.

You may name your donor-advised fund as the charitable beneficiary of  all or part of an IRA. You should consult with your tax advisor or attorney to determine how this affects your tax liability and filing needs.

The most common and cost-effective contributions are appreciated securities that you have owned for more than one year. You avoid any capital gains tax on the securities and you can deduct the total fair market value of the contribution from your federal income taxes, and up to 30% of your adjusted gross income.

NPT accepts a wide range of assets, including:

• Cash
• Publicly-traded securities including stocks, bonds and mutual fund shares
• Restricted and controlled stock
• Privately-held stock
• Tangible personal property
• Real estate
• Proceeds from life insurance or from a full-paid policy
• Transfers and grants from private foundations
• Bequests from wills
• Named beneficiary of charitable remainder trust
• Named beneficiary of an IRA, 401(k), or other retirement account

NPT strongly encourages you to consult with your tax advisor or attorney before making a charitable contribution.

To start a donor-advised fund account with NPT, you will need to make a contribution of $25,000 or more. Once your donor-advised fund account is established, you can make subsequent contributions of $5,000 or more.

Yes.

You may contribute $5,000 or more at any time. Many donors like to add to their donor-advisded fund accounts immediately after they recommend a grant. Others prefer to make regular contributions and build up the account for future grantmaking.

Yes. NPT provides you with a written confirmation of your contribution(s). This confirmation serves as a receipt for your taxes. With a donor-advised fund account, you can immediately deduct the full amount of your contribution. Therefore, receipts for grants you recommend from your donor-advised fund account cannot be used to take a tax deduction.

We invest it, according to your recommendations. If your contribution is liquid, we invest it on the same business day that we receive it. A business day is defined by the NYSE. If your contribution is illiquid, we invest it on the same business day that we receive proceeds from its sale.

Yes. Here are some general guidelines:

Check/wire: Your charitable deduction is the amount of your cash contribution.

Publicly-traded securities: If you have owned your donated securities for more than one year, your charitable deduction is the fair market value of those securities, determined by an average of high and low on the date you contribute them.

Securities that are not publicly traded: If you have owned your donated securities for more than one year, your charitable deduction is the fair market value of those securities, determined by you in a reasonable manner on the date you contribute them. The IRS may require you to obtain a qualified independent appraisal.

Real Estate: For contributions of real estate, your charitable deduction is the fair market value of that real estate, determined by a reasonable manner on the date you contribute it. The IRS may require you to obtain a qualified independent appraisal.

No. Only contributions to NPT are tax deductible. Growth inside your donor-advised fund account is not eligible for an additional deduction.

Under the Internal Revenue Code, deductions for charitable contributions are subject to certain "percentage limitations." That means you can deduct a stated percentage of your adjusted gross income ("AGI") in the year you take the deduction. Contributions in excess of these percentage limitations may be carried forward for additional years.

National Philanthropic Trust is a public charity. Therefore, percentage limitations that apply are the most favorable charitable deductions available. Deductions for contributions of long-term capital gain property—such as appreciated securities held for more than one year—are limited to 30% of AGI. Deductions for all other contributions —including contributions of cash—may be taken up to 50% of AGI. Your ability to take itemized deductions may be subject to certain other limitations. Please contact your tax advisor to evaluate your tax deductibility limits.

You will receive IRS Form 8283 to file with your tax statement at the end of the year. It is extremely important to review the information on this form since it is your responsibility to submit correct information to the IRS.

This difference is due to market fluctuations and liquidation costs. NPT asks that you consult your tax advisor to determine your charitable tax deduction.

Since NPT is a charity, we do not pay a capital gain tax when we sell gifted securities. Therefore, you pay no capital gains tax on securities you contribute to your donor-advised fund account.

NPT has a database of more than 850,000 charities that you can research at your convenience. If you wish to plan for more strategic philanthropy, NPT can recommend professional consultants. You can contact our philanthropic team toll free at (888) 878-7900.

NPT is one of the few donor-advised fund providers that makes international and non-501(c)(3) grants. These grants require additional due diligence to determine if the charity is eligible. International grants also require additional monitoring. As a result, NPT charges additional fees for these types of grants. These additional fees are charged to your donor-advised fund account when you recommend the grant.

NPT can make grants to charitable organizations that are tax-exempt under Internal Revenue Code (IRC) Section 501(c)(3) and public charities under IRS Section 509(a). NPT can also make grants to private operating foundations. NPT cannot make grants to private non-operating foundations. If you have a special grant request, please contact a member of NPT's staff.

No. When you make a contribution to a DAF, you are entitled to take the full amount as a tax deduction. This is because you have received nothing (in excess of purely incidental benefits) in return for your contribution. If your donor-advised fund satisfies a pledge, you will be receiving something in return for your contribution – release of an obligation.

No. You can deduct contributions to your donor-advised fund account because you receive nothing in return (except purely incidental benefits). If you attend the event, you receive a benefit.

NPT cannot make grants to private non-operating foundations. Also, NPT cannot make grants to individuals or to satisfy a pre-existing pledge. Grants cannot be made to political candidates or parties. Grants cannot be used for any personal benefit, such as tuition, dues, membership fees or any goods purchased at a charitable auction.

Yes. You may also recommend a grant in someone's honor or memory.

Yes. Please check the policies of your company.

There is no limit to the number of grants you can recommend in a year.

NPT's minimum grant is $250.

NPT's grants are processed weekly.

NPT does not charge a per-grant fee. NPT does charge additional fees for international and non-501(c)(3) grants.