[Michael Sherman]

What do you say to your donor who wants to use a grant from their donor advised fund to pay for a table at your gala?

We just received a grant that not only stated in the cover letter:

Please be advised that grants from the Jewish Communal fund cannot provide personal benefits to the donor or any other individual. This includes, for example, satisfaction of a donor's/recommender's enforceable pledge; requests to pay for dinners, events, and memberships that have a nondeductible portion; tuition and goods at a charitable auction.

And they also included a bright blue insert that said:

***ATTENTION: BENEFIT & EVENT COORDINATORS***

This grant is for charitable purposes only.

Grants from the Jewish Communal Fund cannot personally benefit a donor, recommender or any individual.

THIS GRANT MAY NOT BE USED TOWARDS THE PURCHASE OF TICKETS OR IN PAYMENT OF GOODS AND SERVICES THAT WOULD BENEFIT ANY INDIVIDUAL. THIS INCLUDES PAYMENT OF A DEDUCTIBLE PORTION OF A CONTRIBUTION WHEN THERE IS AN ASSOCIATED NON-DEDUCTIBLE PORTION.

How do you handle this with your donor?

Thanks

[Melissa Siobhan]

Forward the letter to your donor and ask them what to do - they should know about this and shouldn't have done it but it is up to them do decide what to do (have you send back the check OR have you keep the check as a donation but buy their table another way). There is nothing else you can do but it will take a careful conversation with the donor so as to not upset them.

Melissa S. Graves

Director of Development Services

The Village for Families and Children

860-297-0598 x3699

(Email Address Removed)

The mission of the Village for Families and Children is to build a community of strong, healthy families who protect and nurture children.

Quote:

From: Michael Sherman
Sent: Monday, September 10, 2007 2:14 PM

Subject: [Fund Development-t-2474] Donor Advised Funds...what do you say to the donor

What do you say to your donor who wants to use a grant from their donor advised fund to pay for a table at your gala?

We just received a grant that not only stated in the cover letter:




Please be advised that grants from the Jewish Communal fund cannot provide personal benefits to the donor or any other individual. This includes, for example, satisfaction of a donor's/recommender's enforceable pledge; requests to pay for dinners, events, and memberships that have a nondeductible portion; tuition and goods at a charitable auction.
And they also included a bright blue insert that said:

***ATTENTION: BENEFIT & EVENT COORDINATORS***

This grant is for charitable purposes only.

Grants from the Jewish Communal Fund cannot personally benefit a donor, recommender or any individual.

THIS GRANT MAY NOT BE USED TOWARDS THE PURCHASE OF TICKETS OR IN PAYMENT OF GOODS AND SERVICES THAT WOULD BENEFIT ANY INDIVIDUAL. THIS INCLUDES PAYMENT OF A DEDUCTIBLE PORTION OF A CONTRIBUTION WHEN THERE IS AN ASSOCIATED NON-DEDUCTIBLE PORTION.

How do you handle this with your donor?

Thanks




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[Randi]

This used to drive me nuts. A previous employer used to "ignore" this little issue by taking the whole donation and "comping" their registration fees.

It's not so hard to ask the donor to please send in the non-deductible portion of their gift on a personal check. Most of the time, I think people are just clueless and send these in not realizing that a dinner comes with a cost that is not deductible.

[Michael Sherman]

Quote:

Originally Posted by Randi

It's not so hard to ask the donor to please send in the non-deductible portion of their gift on a personal check. Most of the time, I think people are just clueless and send these in not realizing that a dinner comes with a cost that is not deductible.

This is no longer acceptable. The foundation will not pay for the deductible part of an event. This is what the foundations are now informing us:

THIS GRANT MAY NOT BE USED TOWARDS THE PURCHASE OF TICKETS OR IN PAYMENT OF GOODS AND SERVICES THAT WOULD BENEFIT ANY INDIVIDUAL. THIS INCLUDES PAYMENT OF A DEDUCTIBLE PORTION OF A CONTRIBUTION WHEN THERE IS AN ASSOCIATED NON-DEDUCTIBLE PORTION.

[Randi]

Wow..I hadn't noticed that language! We don't get any of those contributions at my new org. I'm glad, because they were always so difficult to deal with!

Looks like the only option is to send that check back and request a personal check from the donor.

[Melissa Siobhan]

This was never allowed - many people just didn't understand that and I am so glad the DAF is furnishing language that makes this clear.

[Michael Sherman]

Quote:

Originally Posted by Melissa Siobhan

This was never allowed - many people just didn't understand that and I am so glad the DAF is furnishing language that makes this clear.

Agreed! For years it has been a tough sell with CEO's, CFO's and Directors of Development. Now to tell them that donors can't give through a DAF for the Annual Fund and expect to get the "free" tickets to concerts and cocktail receptions after...it isn't pretty.

But, because of the Pension Protection Act of 2006 the DAFs are cracking down and donors can be fined 125% of the gift. Development departments should be knowledgeable of these issues.

[sfuriya]

We don't do dinners or cocktail parties at our organization but what about the small dollar ($15-20) membership items our donors are entitled to? Our donors pick up their benefit item themselves (we never send anything out) and so we leave it up to the donor whether they pick it up and whether they tell their tax man that they received anything to make their gift not 100% tax-deductible. Does anyone think that I need to worry about this when we get in DAF gifts (of which we get a lot)??

[andrea.bbbs]

Please forgive ignorance

what is DAF?

[Michael Sherman]

Quote:

Originally Posted by andrea.bbbs

Please forgive ignorance

what is DAF?

The only dumb question is the one not asked.

DAF means Donor Advised Fund. This could be Community Foundation, Jewish Federation, Fidelity Fund, etc.