Frequently Asked Questions about Donor Advised Funds
How do I request that grants be made from the fund(s) I have established at the Foundation?
A simple request in writing is all that’s required. You can make the request by mail, email, or fax. Also, for your convenience, you may recommend a grant recipient from your Fund using our online DonorLink feature.
What is the approval process for such grants?
The Foundation will verify that the recommended grantee is a 501(c)(3) charitable organization qualified to use the funds for the purpose requested, and that the grant has been requested by a legally designated advisor of the fund. If the Foundation approves the grant, a distribution can generally be made within two weeks of the donor’s request.
How often can I make grant requests?
Grants requests can be submitted at any time, in any amount.
Do grant recipients have to be Catholic organizations or agencies? Do they have to be in Dallas, or in Texas?
No. All 501(c)(3) organizations are eligible for funding from Donor Advised Funds. Your school or university, a civic cause, a cultural institution, or any qualifying charitable organization operating in accordance with Catholic values, can be funded anywhere in the country. Grants from the unrestricted Philanthropy Fund must serve organizations in the Diocese of Dallas.
Can grants be made to any individuals?
No. Only 501(c)(3) organizations are eligible.
Can I request a grant payable over more than one year?
Yes. The Foundation can honor a request that the distribution be made in increments in the amounts and at the times you specify.
Can I use the resources of my Donor Advised Fund, then, to pay off a five-year pledge to an organization’s capital campaign?
No. The Catholic Foundation cannot make grants to satisfy pledges you have made to any charity. This is because, in accordance with the IRS, when you make a contribution to a Donor Advised Fund at The Catholic Foundation you are entitled to take the full amount as a tax deduction, as you have received nothing material in return for your investment. If, however, the Foundation satisfies your pledge, you will be receiving something in return for your contribution – release from an obligation. The Foundation can make grants of certain amounts over a number of years, but not in fulfillment of any pledge or other obligation. If you have a donor advised fund, you should not sign a pledge card without first discussing your charitable commitment and wishes with a Foundation professional.
What other kinds of charitable gifts cannot be distributed by the Foundation?
Membership fees and dues, and tickets for seats or tables at charitable events are precluded from payment by the Foundation, as are contributions to political campaigns and lobbyists.
Do I get credit for grants I recommend and request be made from my fund(s) at The Catholic Foundation?
When The Catholic Foundation makes a distribution, the recipient is notified that the grant has been made from your specific fund of The Catholic Foundation. Acknowledgements are generally sent both to the Foundation and to you – to let you know that a gift was received and appreciated. The tax receipt, however, will be sent only to the Foundation, as you are not entitled to any further tax deductions, having realized the tax benefits when you established or contributed to your fund at the Foundation.
Is it possible for grants from the Foundation to be made anonymously?
Yes. This is a popular use of Donor Advised Funds at The Catholic Foundation. Simply request that neither the name of the donor nor the name of the fund be released.
Can my children participate as advisors to the fund(s) I have established?
Yes. When you establish your fund, you will name the advisors – usually your self and your spouse, and if you choose, your adult children. Many donors find their donor advised funds to be helpful tools for teaching philanthropy to their children. You can also stipulate that your children serve as advisors to the fund after your death, so as to retain your family’s participation for an additional generation.
What happens to the fund(s) when I die?
You can stipulate that your children or other successors serve as advisors to the fund following your death and throughout their lifetimes. At their deaths, the fund will become an endowment – either a permanent endowment in your family name (“The Smith Family Endowment Fund of The Catholic Foundation”) or as part of The Catholic Foundation’s unrestricted Philanthropy Fund. The proceeds generated will be distributed by the Foundation in perpetuity and, to the extent possible, in accordance with your original charitable vision, i.e., if you have demonstrated a particular interest in funding Catholic schools or medical research, the Foundation will honor that intention.
How much of the money in a fund can be given away in grants to charities?
Because the Catholic Foundation can personalize every fund established – as long as compliance with all relevant IRS and state and local regulations is achieved – you will have the opportunity to determine your fund’s spending policy. You may choose to spend, or distribute, a percentage of your fund’s earnings, or a percentage of your fund’s value each year; or you may choose a policy that simply allows all of your philanthropic funds to “pass through” the Foundation en route to other charities, in which case, you could spend down the entire sum. Our donor professionals will be happy to discuss the options that will best serve your individual situation vis-à-vis your philanthropic vision, your income or tax status in any given year, and other relevant factors.