Donor-Advised Fund FAQs

If you have a question that isn’t covered in the sections below, please contact us at (888) 878-7900.

overview
contributions
tax information
grantmaking

Opening a Donor-Advised Fund Account

Who can open a donor-advised fund account?

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

How much do I need to open a donor-advised fund account?

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.

Can my donor-advised fund account be named after someone other than me?

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, like the “Emerging Scholars Fund.”

How quickly can I create a donor-advised fund account?

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

Managing a Donor-Advised Fund Account

Can my children be involved with my donor-advised fund account?

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

Can my donor-advised fund account have multiple successors?

Yes. Your account assets can be split between multiple successors, or you can have your successors share advising responsibilities. Your successor advisors can also name their own successor advisors. This option offers the potential for your donor-advised fund to exist in perpetuity.

How are the assets in my donor-advised fund account invested?

At NPT, you can choose an investment strategy from a variety of best-in-class options. If you contribute $10 million or more, you and your advisor(s) can create a customized investment plan, subject to NPT approval.

What types of fees are charged to my donor-advised fund account?

Charitable administration 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.

What happens to my donor-advised fund account if there are no successors?

You can designate one or more charitable organizations as account beneficiaries. If you indicate neither charitable beneficiaries nor successor advisors to your donor-advised fund account, 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.

Contributable Assets and Definitions

What types of assets can I contribute to my donor-advised fund account?

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 and Testamentary Gifts
  • Remainder interest from a charitable remainder trust
  • IRA, 401(k), or other retirement account assets
  • Tangible personal property
  • Cryptocurrency

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

At what point is a contribution considered a charitable donation?

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, as well as when and how it is transferred to your NPT donor-advised fund account.

Can I contribute assets from my IRA to my donor-advised fund?

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.

What is the best type of asset that I can contribute to my donor-advised fund?

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.

Contribution Amounts and Frequency

How much do I need to open a donor-advised fund account?

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.

Are additional contributions to my donor-advised fund account tax-deductible?

Yes. All contributions to your donor-advised fund are donations to a public charity, and therefore tax-deductible.

How often can I make contributions to my donor-advised fund account?

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

Contribution Management and Reporting

Will I get a receipt for my contributions?

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. Because you take a tax deduction for your initial contribution, receipts for grants you recommend from your donor-advised fund account cannot be used to take a tax deduction.

What happens to my contribution after it is accepted by NPT?

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. We are committed to selling illiquid assets in a responsible and timely fashion.

Tax Deductions

What are the limitations on charitable deductions?

Under the Internal Revenue Code, deductions for charitable contributions are subject to certain percentage limitations. 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 cash contributions may be taken up to 60% 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.

Can the income accrued in my donor-advised fund account be deducted as an additional charitable donation?

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

Does my tax deduction depend on the type of asset I contribute?

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 securities for more than one year, your charitable deduction is the fair market value of those securities donated, 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 securities for more than one year, your charitable deduction is the fair market value of those securities donated, 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 you in a reasonable manner on the date you contribute it. The IRS may require you to obtain a qualified independent appraisal.

Tax Liability and Filing

Why is the net amount in my donor-advised fund account different from the amount of my charitable deduction?

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

Do I file my contribution receipt with my taxes at the end of the year?

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.

How are capital gains treated for gifts of appreciated securities?

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

Grantmaking Guidelines and Definitions

Are there any other specific types of grants that NPT cannot make?

NPT cannot make grants to private non-operating foundations or to individuals. 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.

Can I recommend a grant from my donor-advised fund account to attend a charity event?

No. The most common reason for denying a grant is a donor’s desire to use that grant for table sponsorship or event tickets. When you make your initial contribution to a donor-advised fund, your contribution is 100% tax-deductible. That is because you do not receive any goods or services in exchange for that contribution. Charitable events and galas provide their attendees with benefits that aren’t tax-deductible, such as food, drinks and/or door prizes. Therefore, grants recommended for these purposes cannot be approved.

How do I decide what charities to support?

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 at (888) 878-7900.

Can I recommend grants from my donor-advised fund account to international organizations?

NPT is one of the few donor-advised fund sponsors that makes international and non-501(c)(3) grants. These grants require additional due diligence to determine if the charity is eligible. International grant eligibility is determined through Expenditure Responsibility and Equivalency Determination, and such grants require additional monitoring. As a result, NPT charges additional fees which are charged to your donor-advised fund account when you recommend a grant of this type.

Can I recommend a grant from my donor-advised fund account to any charity or nonprofit organization?

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 at (888) 878-7900.

Can I make an anonymous grant from my donor-advised fund account?

Yes. Any individual grant can be given out anonymously, credited to the DAF itself, or credited to you as the donor. You may also recommend a grant in someone’s honor or memory.

Can my company match a grant that I recommend from my donor-advised fund account?

Yes. Please check the policies of your company.

Grant Amounts and Frequency

How many grants can I recommend in a year?

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

What is the minimum amount for an NPT grant?

NPT’s minimum grant is $250.

Grant Fees and Processing

How quickly are my grants processed?

NPT’s grants are processed weekly.

Is a fee charged for each grant I recommend?

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