In the United States, a donor-advised fund (commonly called a DAF ) is a charitable giving vehicle administered by a public charity created to manage charitable donations on behalf of organizations, families, or individuals. To participate in a donor-advised fund, a donating individual or organization opens an account in the fund and deposits cash, securities, or other financial instruments. They surrender ownership of anything they put in the fund, but retain advisory privileges over how their account is invested, and how it distributes money to charities.
50-399: Defunct Newspapers Journals TV channels Websites Other Economics Gun rights Identity politics Nativist Religion Watchdog groups Youth/student groups Miscellaneous Other Donors Trust is an American nonprofit donor-advised fund . It was founded in 1999 with the goal of "safeguarding the intent of libertarian and conservative donors". As
100-433: A "sunset" on donor-advised funds, after which they collapse individual funds into their general charity pool. Because a public charity houses the fund, donors receive the maximum tax deduction available, while avoiding excise taxes and other restrictions imposed on private foundations. Further, donors avoid the cost of establishing and administering a private foundation, including staffing and legal fees. The donor receives
150-431: A 2.5–4% of assets overhead expense to maintain, a 1–2% excise tax on NET investment earnings and a required 5% spending of assets each year) but may also have one more drawback: a limited lifetime, although this varies depending on the sponsor. American Endowment Foundation for example allows successor advisors in perpetuity. While a foundation can persist for generations or in perpetuity, some sponsoring organizations impose
200-401: A 2013 analysis by Drexel University environmental sociologist Robert Brulle , between 2003 and 2013 Donors Trust and Donors Capital Fund combined were the largest funders of organizations opposed to restrictions on carbon emissions, which Brulle calls the "climate change counter-movement." According to Brulle, by 2009, approximately one-quarter of the funding of the "climate counter-movement"
250-954: A Donors Trust grant of $ 7 million, nearly half of the Foundation's revenue that year. Other Donors Trust recipients have included The Heritage Foundation , Americans for Tax Reform , the National Rifle Association Freedom Action Foundation, the Competitive Enterprise Institute , the Cato Institute , the Federalist Society , the FreedomWorks Foundation , the National Right to Work Legal Defense Foundation , and
300-405: A donor advised fund, Donors Trust is not legally required to disclose the identity of its donors, and most of its donors remain anonymous. It distributes funds to various conservative and libertarian organizations, and has been characterized as the " dark money ATM" of the political right . It is affiliated with Donors Capital Fund , another donor-advised fund. In September 2015, Lawson Bader
350-641: A donor contributing cash or assets to a public charity, which in turn creates a separate account for the donor, who may recommend disbursements from the fund to other public charities. Technically, the charity that sponsors the fund has the final say on the disbursements, and it is legally required to ensure they go only to charitable purposes, but in normal circumstances the original donor's requests will be followed. Since 2010, some donor-advised funds have become less like traditional foundations. The simultaneous growth of DAFs and online giving has led to funds like CharityBox, that are run by start-up companies through
400-560: A donor makes to their donor-advised fund is 100% irrevocable and destined for a final 501(c)(3) organization . Donor-advised funds provide a flexible way for donors to pass money through to charities—an alternative to direct giving or creating a private foundation . Donors enjoy administrative convenience (the sponsoring organization does the paperwork after the initial donation), cost savings (a foundation requires around 2.5% to 4% of its assets each year to run), and tax advantages (versus individual giving) by conducting their grantmaking through
450-408: A donor-advised fund has higher deductions for these gifts (depending on the gift). In addition, the founders or board of a private foundation have complete control over where its giving goes within broad legal bounds. In a donor-advised fund, the donor only advises the sponsoring organization where the money should go. While rare (perhaps unheard of?), a sponsoring organization could conceivably ignore
500-464: A free society as understood in America's founding documents." A major selling point to donors is that even after their death, their money will continue to fund conservative/libertarian goals, and not change based on the attitudes of their heirs or trustees as a family foundation might. In early 2013, Donors Trust was the subject of reports by The Independent , The Guardian , Mother Jones , and
550-408: A separate account for the donor, who may recommend disbursements from the fund to other public charities. Donors Trust requires an initial deposit of $ 10,000 or more. Donors Trust is associated with Donors Capital Fund . Donors Trust refers clients to Donors Capital Fund if the client plans to maintain a balance of $ 1 million or more. Donors Trust president Lawson Bader said the goal of the organization
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#1732797725451600-428: A web/mobile platform. Such companies allow donors to give directly to 501(c)(3) organizations and instantly receive tax-deductible receipts via email. The New York Community Trust pioneered donor-advised funds in 1931, and the second such fund was created in 1935. Since then, commercial sponsors, educational institutions, and independent charities have started offering the service. As of 2015 , donor-advised funds were
650-483: Is a Donors Trust recipient. The organization donated $ 1.7 million to Project Veritas, a watchdog group run by conservative activist James O'Keefe , which uses undercover videos to demonstrate the bias in mainstream media organizations and liberal groups. Donors Trust's relationship with Project Veritas came under scrutiny in 2017 after Project Veritas had one of its operatives contact The Washington Post , falsely claiming to have been impregnated by Roy Moore while she
700-400: Is a benefit to the donor for contributing appreciated securities rather than cash, as illustrated in this example taken from Vanguard 's marketing material for their plan. Suppose one has 1,000 shares of stock that was purchased 15 years ago (which qualifies as long term capital gains under U.S. tax law). Assume the stock was acquired for $ 10 per share and it is now worth $ 100 per share. Here
750-480: Is a comparison of the cost to the donor of making a contribution of $ 100,000 to a charity, assuming a 35% income tax rate and 15% long term capital gains tax rate. Option 1: Contribute cash from sale of securities Charity receives $ 100,000 for a net cost to donor of $ 78,500 Option 2: Contribute appreciated securities Charity receives $ 100,000 for a net cost to donor of $ 65,000 Thus, by donating appreciated securities rather than selling them, one can contribute
800-549: Is most notable for its early support and funding of the law and economics movement and the Federalist Society . "All in all, the Federalist Society has been one of the best investments the foundation ever made," wrote the Foundation to its trustees in 2003. According to the official website, "the general purpose of the John M. Olin Foundation is to provide support for projects that reflect or are intended to strengthen
850-413: Is most notable for its early support and funding of the law and economics movement, a discipline that applies incentive-based thinking and cost-benefit analysis to the field of legal theory . The executive director of the Foundation in its early years was conservative activist Michael S. Joyce , who left to head the similar Bradley Foundation . William E. Simon , a leverage buyout pioneer who
900-406: Is to "safeguard the intent of libertarian and conservative donors," ensuring that funds are used only to promote "liberty through limited government, responsibility, and free enterprise". Donors Trust was established in 1999 by Whitney Lynn Ball. According to Donors Trust, the organization was founded by a group of donors and nonprofit executives who were "actively engaged in supporting and promoting
950-757: The Castle Rock Foundation , the Searle Freedom Trust , and the Bradley Foundation . The Bradley family contributed $ 650,000 between 2001 and 2010. The DeVos family foundation contributed $ 1 million in 2009 and $ 1.5 million in 2010 to Donors Trust. From its founding in 1999 through 2013, Donors Trust and Donors Capital Fund distributed nearly $ 400 million, and through 2015 $ 740 million, to various nonprofit organizations, including numerous conservative and libertarian causes. Donors Trust requires that recipients are registered with
1000-808: The Center for Class Action Fairness . Donors Trust paid the legal fees of the Project on Fair Representation, a Washington, D.C. –based legal defense fund that assembled the plaintiff's legal team in Fisher v. University of Texas , a 2013 United States Supreme Court case concerning affirmative action college admissions policies . In 2011, the Franklin Center for Government and Public Integrity , an online news organization, received $ 6.3 million in Donors Trust and Donors Capital Fund grants, 95 percent of
1050-573: The Center for Public Integrity . Mother Jones described Donors Trust as having funded a conservative public policy agenda in the areas of labor unions, climate science, public schools, and economic regulations. In January 2021, CNBC reported that in 2019, Donors Trust had given millions of dollars to conservative organizations that went on to push claims of election fraud in the 2020 election. As of 2013, Donors Trust had 193 contributors, mostly individuals, and some foundations. The Charles G. Koch Foundation contributed millions to Donors Trust since
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#17327977254511100-561: The Committee for a Constructive Tomorrow (CFACT), a conservative Washington, D.C. –based non-profit organization , received $ 1.2 million from Donors Trust, 40 percent of CFACT's revenue in that year. Climate change writer Wei-Hock "Willie" Soon received hundreds of thousands of dollars from Donors Trust. In 2015, The Guardian reported that Donors Trust gave $ 4.3 million to the Competitive Enterprise Institute over three years. Between 2008 and 2013, Donors Trust granted $ 10 million to
1150-611: The Manhattan Institute ; Mac Donald is the John M. Olin Fellow at this New York City–based institution. In 2005, following longstanding plans, the foundation announced its final grants and closed its doors. The foundation closed in the same year as the Franklin W. Olin Foundation , which was established by John Olin's father, Franklin W. Olin . The Franklin W. Olin Foundation also shut down for donor intent reasons, but
1200-558: The Olin Industries chemical and munitions manufacturing businesses. Unlike most other foundations, it was charged to spend all of its assets within a generation of Olin's death, for fear of mission drift over time and to preserve donor intent . It made its last grant in the summer of 2005 and officially disbanded on November 29, 2005. It had disbursed over $ 370 million in funding, primarily to conservative think tanks , media outlets, and law programs at influential universities. It
1250-635: The State Policy Network (SPN), a national network of conservative and libertarian think tanks focused on state-level policy . SPN used the grants to incubate new think tanks in Arkansas, Rhode Island and Florida. Donors Trust also issued grants to SPN's affiliates at the state level during the same period. The American Legislative Exchange Council , a nonprofit organization of conservative state legislators and private sector representatives that drafts and shares model state-level legislation,
1300-619: The US Internal Revenue Service as a 501(c)(3) public charity. Whitney Ball, the former president of the Trust, told The Guardian in 2013 that it has about 1,600 grantees. In 2014, Ball said that 70 to 75 percent of grants go to public policy organizations, with the rest going to more conventional charities such as social service and educational organizations. In 2010, the Americans for Prosperity Foundation received
1350-701: The United States are heavily regulated by the Internal Revenue Service , including rules on oversight and minimum annual payouts, donor-advised funds housed in public charities are not subject to the same tax restrictions. In 1985, National Foundation, Inc. (NFI, now WaterStone) defended its standard for the management of donor-advised funds against the Internal Revenue Service in the United States tax court in National Foundation, Inc. v. United States . The court found that NFI
1400-415: The assets and donating cash. By donating appreciated assets to a donor-advised fund and then advising the fund to make donations to several charities, one can reap these tax advantages without the hassle and paperwork of transferring non-cash assets to several organizations. This combination of convenience and full tax advantage is one reason that donor-advised funds are used. While private foundations in
1450-656: The center's revenue that year. Other Donors Trust recipients have included the Foundation for Jewish Camp , Families Against Mandatory Minimums , the James Randi Educational Foundation , the Marijuana Policy Project , and PragerU . Donors Trust and Donors Capital Fund distributed nearly $ 120 million to 102 think tanks and action groups skeptical of the science behind climate change between 2002 and 2010. According to
1500-535: The donor fund is invested in. John M. Olin Foundation Defunct Newspapers Journals TV channels Websites Other Economics Gun rights Identity politics Nativist Religion Watchdog groups Youth/student groups Miscellaneous Other The John M. Olin Foundation was a conservative American grant-making foundation established in 1953 by John M. Olin , president of
1550-435: The donor's intent. In addition, most donor-advised funds can solely give to IRS certified 501(c)(3) organizations or their foreign equivalents. This rules out, for example, most kinds of donations to individuals, and scholarships—both things a private foundation can do more easily. As well, it precludes political donations, lobbying organizations, etc. Donor-advised funds do reap a significant cost advantage (foundations carry
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1600-592: The door for many other providers to launch donor-advised fund programs. On August 17, 2006, President George W. Bush signed the Pension Protection Act of 2006 (H.R. 4) into law, which includes a number of changes to the regulatory framework for donor-advised funds. The Pension Protection Act of 2006 established guidelines for the management of donor-advised funds, using NFI's standards as a framework. The sections dealing with donor-advised funds include: Under United States federal income tax law, there
1650-460: The economic, political and cultural institutions upon which the American heritage of constitutional government and private enterprise is based. The Foundation also seeks to promote a general understanding of these institutions by encouraging the thoughtful study of the connections between economic and political freedoms, and the cultural heritage that sustains them." From 1958-1966, the foundation
1700-432: The fastest growing charitable giving vehicle in the U.S. —more than 269,000 donor-advised accounts held over $ 78 billion in assets. Current U.S. tax law allows the donor of appreciated securities or other assets to get a tax deduction for the market value of the donation and avoid capital gains taxes. This double tax advantage can make donating appreciated assets to a charitable organization more attractive than selling
1750-425: The fund. On average, the conversion time for a contribution to a donor-advised fund to a grant from the donor-advised fund, is approximately 24 months. A donor-advised fund has some disadvantages compared to a private foundation, and some advantages. Both can accept donations of unusual or illiquid assets (e.g., part ownership of a private company, art, real estate, partnerships or limited partnership shares), but
1800-405: The grantee's tax-exempt status. Drexel University environmental sociologist Robert Brulle , who has studied networks of nonprofit funding, described donor-advised funds: In this type of foundation, individuals or other foundations contribute money to the donor directed foundation, and it then makes grants based on the stated preferences of the original contributor. This process ensures that
1850-426: The intent of the contributor is met while also hiding that contributor's identity. Because contributions to a donor directed foundation are not required to be made public, their existence provides a way for individuals or corporations to make anonymous contributions. Whitney Ball, co-founder and executive director of the donor-advised fund Donors Trust , described donor-advised funds: A donor-advised fund begins with
1900-491: The maximum tax deduction at the time they donate to their account, and the organization that administers the fund gains full control over the contribution, granting the donor advisory status. As such, the administrating fund is not legally bound to the donor, but makes grants to other public charities on the donor's recommendation . Most foundations that offer donor-advised funds only make grants from these funds to other public charities, and usually perform due diligence to verify
1950-600: The mid-2000s. Two Koch brothers, Charles and David Koch , were the top contributors to Donors Trust in 2011, according to an analysis by the Columbia Journalism Review published by Columbia University Graduate School of Journalism . In 2010, Donors Trust received a US$ 2 million grant from the Donors Capital Fund. Donors Trust account holders have included the John M. Olin Foundation ,
2000-477: The preferences of the original contributor, and the organization assures clients that their contributions will never be used to support politically liberal causes. As a donor advised fund, Donors Trust can offer anonymity to individual donors, with respect to their donations to Donors Trust, as well as with respect to an individual donor's ultimate grantee. As a donor advised fund and public charity, Donors Trust accepts cash or assets from donors, and in turn creates
2050-443: The receiving party did not comply with the five standards of a charitable organization , identified by the court: 1) that it be consistent with the charitable purposes specified in section 501(c)(3); (2) that it has a reasonable budget; (3) that it be adequately funded; (4) that it be staffed by competent and well-trained personnel; and (5) that it be capable of effective monitoring and supervision by NFI. The outcome of this case opened
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2100-427: The same total amount with reduced effective donor cost. This is true whether or not one uses a donor-advised fund. If the securities increase in value after they have been given to the donor-advised fund (but before the grant recommendation is actually made), no additional tax deduction can be claimed by the taxpayer. On the other hand, if the securities decrease in value, the taxpayer's original tax deduction (based on
2150-547: The two foundations were entirely independent and unrelated, except for the family connection of their founders. According to the Philanthropy Roundtable , the Olin Foundation "dispensed hundreds of millions of dollars to scholars, think tanks, publications, and other organizations" and "shaped the direction and aided the growth of the modern conservative movement that first sprang into visibility in
2200-425: The value of the securities when given to the donor-advised fund) remains valid. Even though the tax efficiency is the same, there are differences between giving directly to a charity and giving via a donor-advised fund. However, there is a cost to donor-advised funds. Most donor-advised funds charge an administrative fee (e.g., 1% per year). This is in addition to management fees that, for example, any mutual funds
2250-484: Was United States Secretary of the Treasury under Presidents Richard Nixon and Gerald Ford , was president of the Foundation from 1977 until his death in 2000. He frequently discussed the foundation's commitment to supporting the "counter-intelligentsia". Conservative scholar James Piereson was the last executive director and secretary. The foundation supported conservative thinkers such as Heather Mac Donald of
2300-587: Was a teenager. In 2018, the organization funded more than 99% of the Judicial Education Project , a legal alias for Honest Elections Project and The 85 Fund . The board of directors of Donors Trust includes: Donor-advised fund A donor-advised fund is an account at a sponsoring organization, generally a public charity, where an individual can make a charitable gift to enjoy an immediate tax benefit and retain advisory privileges to disburse charitable gifts over time. The contribution
2350-558: Was announced as the new president of both Donors Trust and Donors Capital Fund. Bader was formerly president of the Competitive Enterprise Institute and Vice President at the Mercatus Center . Donors Trust is a 501(c)(3) organization . As a public charity and a donor-advised fund, Donors Trust offers clients a variety of tax advantages compared to a private foundation. Donors Trust accepts donations from charitable foundations and individuals. Grants from Donors Trust are based on
2400-445: Was eligible for tax-exemption and could be classified as a 501(c)(3) non-profit organization based on their management of donor-advised funds. NFI had complete control and ownership of what would later be called donor-advised funds, and could exercise discretion in authorizing charitable distributions of the funds. Donors maintained advisory privileges, but NFI was not obligated to use the funds based on their recommendations, especially if
2450-556: Was from the Donors Trust and Donors Capital Fund. As of 2010, Donors Trust grants to conservative and libertarian organizations active in climate change issues included more than $ 17 million to the American Enterprise Institute , a think tank; $ 13.5 million to the Heartland Institute , a public policy think tank; and $ 11 million to Americans for Prosperity , a political advocacy group. In 2011,
2500-551: Was used to launder money for the Central Intelligence Agency , which funded covert anti-communist propaganda. The fund was largely inactive until 1969, when John M. Olin was disturbed by the Willard Straight Hall takeover at his alma mater, Cornell University . At the age of 80, he decided that he must pour his time and resources into preserving the free market system. The Foundation
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