A Donor Advised Fund can be opened with a minimum gift of $25,000. You can use cash, stock, real estate, cryptocurrency or other digital assets to create a named fund and qualify for an immediate tax deduction.
As the donor, you can be actively engaged in the grant-making process. Fifth Element Fund gives you the right to advise on distributions from your fund to specific charities. We are also available to identify organizations that match your charitable interests. Additional gifts may be made to your DAF at any time.
Reasons to Create a Donor Advised Fund
It’s Easy. The necessary paperwork to establish a new fund is straightforward and can be completed in minutes. Recommending grants from your fund only requires a simple one-page form. We take care of the paperwork for you, so that you can focus your time on more important things.
It’s Flexible. With a minimum of $25,000, you can establish a fund for just about any purpose and make grants to the local, national and global organizations that you see fit.
It’s Personal. As a donor advisor to Fifth Element Fund, you not only may recommend distributions from your fund to specific charities, you may also designate a successor advisor to the fund – an effective way to engage other family members in charitable activity. We’re here to offer individualized service and strategies to help you carry out your goals and suggest ways to increase your impact.
It’s Efficient. We handle the administrative tasks of your fund – from investment administration to grants management – all for a nominal administrative fee. All of our funds share the costs of administration, allowing for economies of scale.
How Donor Advised Fund Administration Works
We pool all our charitable funds for administrative purposes, however each participating fund receives individualized active investment management for maximum investment return and flexibility. You may choose from a variety of existing investment management strategies, or recommend your fund be managed by your own investment advisor, allowing total transparency as you support the charitable causes you care about most.
It is up to you to determine the appropriate level of spending from your DAF account, as there is no mandatory spending requirement. If you are interested in preserving your fund for the long term, you have the option to annually rollover your entire account and the investment growth until such time you are ready to make grants.
Minimum balances for funds that participate in our outside investment management program is $100,000.
What do I need to know before I start?
Starting a private foundation can involve substantial start up costs and administrative expenses, such as the yearly filling of a Form 990-PF. But one of the most important differences is that Donor Advised Funds receive more favorable tax treatment than a private foundation.
Donor Advised Funds allow donors to take a federal income tax deduction up to 50% of adjusted gross income (AGI) for cash contributions and up to 30% of AGI for appreciated securities; versus 30% of AGI for cash contributions and 20% of AGI for appreciated securities for a private foundation.
Donor Advised Funds also offer the ability to recommend grants anonymously, if desired. It is also possible to convert a private foundation over to a donor advised fund to simplify on-going maintenance and record keeping.
How do I start a fund?
A donor enters into an agreement with Fifth Element Fund. Our staff will assist you with the process. If you have additional questions please call Tony Suber at (404) 825-9529.
- To create a fund, a donor makes an irrevocable contribution to the Fund, a public charity, and takes a tax deduction in the year they make the contribution.
- The donor chooses a name for their Fund (name can include the word “Foundation”).
- The donor can then recommend to the Fund a preferred investment option for their account.
- The donor can begin recommending grants to charities at anytime. The number of grants issued per year is not limited.
How can I still support the charities I care about?
- Donate assets that make the most sense from a tax perspective and then support multiple charities from a single contribution to the fund using our Contribution Form.
- Recommend grants to any IRS-qualified public charity 501(c)3, or to recognized international charitable organizations.
- Recommend grants online, by fax or by mail using our Grant Request Form.
- Set up recurring grant recommendations (monthly, quarterly, semi-annually, or annually).
- The Fund prepares customized correspondence for grants from your account and issues the grants to the recommended charity. Grants can be made in the name of your
fund, or made anonymously if necessary.
What are acceptable contributions?
- Cash equivalents (by check or wire) and publicly traded securities (including restricted stock).
- Certain special assets (including real estate and illiquid assets) are accepted on a case-by-case basis.
- Cryptocurrency and other digital assets.
- Privately-held stock in a company.