PRIMARY DONOR
The primary donor is defined as the person who established the donor advised fund and is responsible for the initial contribution. If the primary donor is not an active fund advisor, the named fund advisors may advise grantmaking from the fund. For these terms and conditions, CFSA will communicate with the primary donor or fund advisor(s) as appropriate.
FUND ADVISORS
Upon establishing a fund, the primary donor may give one or more fund advisors the authority to access information regarding the fund and make grant recommendations. Fund advisors will be able to access monthly statements electronically via the Donor Portal and may request to have statements sent by mail. A person must be at least 18 years old to serve as a fund advisor.
APPOINTMENT OF ADDITIONAL ADVISORS
Requests to appoint additional advisors or to make changes in the fund advisors must be communicated to CFSA in writing. Such requests will be accepted from the primary donor only. A maximum of two generations of successor advisors can be named. Should the fund advisor be deceased, unwilling or unable to serve, or cannot be located, and a successor advisor has not been named and there is no written succession plan on file at CFSA, then the fund shall be converted to an unrestricted fund, or if the balance of the fund is below the minimum required amount to do so, it shall be transferred to the general endowment of CFSA.
Funds created by organizations rather than by individuals are often advised by an appointed committee with an identified process for selecting new members. Additional fund advisors or changes in the fund advisors must be communicated to CFSA in writing by the organization and/or the appointed committee.
SUCCESSOR ADVISORS
The donor may designate one or more individuals as successor advisors who may, from time to time, recommend grants from the fund exclusively for charitable purposes. These recommendations are advisory only and CFSA will not be bound by the recommendations.
Successor advisors must be designated in this agreement by the donor, either by name or relationship at the time of this agreement, and provided to CFSA. Successor advisors must be living at the time they are named. After the initial advisors are unable, unwilling, or incompetent to serve, up to two more generations may serve as successor advisors if the following conditions are met:
- The fund is endowed. Non-endowed funds will become endowed.
- The fund has a minimum balance of $100,000.
- Advisors must be of the legal age of 18 at the time they serve. However, if at such time when the only designated advisors are minors, CFSA’s Board of Trustees will assume the role of advisor or designate that role until such time as at least one of the named advisors attains the age of majority.
- Successor advisors must recommend at least 50 percent of the amount distributed from the fund to the primary geographic area served by CFSA.
- After the death of the last advisor, or if at any time the advisor is unwilling or incompetent to serve, cannot be located, does not respond, or indicates they do not wish to serve, CFSA will become the sole advisor for the fund.
SUCCESSION PLANS
Primary donors have the opportunity to request a succession plan for their fund after all fund advisors cease to serve. There are many options available, including conversion to a designated, field of interest, or unrestricted fund. If no succession plan is given in writing to CFSA, the fund shall be converted to an unrestricted fund, or if the balance of the fund is below the minimum required amount to do so, it shall be transferred to the general endowment fund of CFSA. All succession plans must be submitted in writing by the primary donor only and are subject to CFSA’s approval.
DISTRIBUTIONS
CFSA agrees to use the contributions of the donor and of other persons or organizations who contribute to the fund for purposes and in accordance with the terms, provisions, and conditions set forth in this Agreement, so long as such terms, provisions, and conditions are consistent with the tax-exempt charitable status of CFSA under Section 501(c)(3) of the Internal Revenue Code.
It is anticipated that distributions from the fund will be made at least annually for those charitable purposes as CFSA may determine and be consistent with the exempt purposes of CFSA as specified in its Articles of Incorporation and Bylaws. The donor from time to time may recommend grants from the fund exclusively for charitable purposes. These recommendations are advisory only and CFSA will not be bound by the recommendations.
Distributions from the fund must satisfy the following requirements:
- Donor recommendations may be submitted anytime via CFSA’s Donor Portal, or the donor may elect to complete a Donor Advised Fund Grant Recommendation Form, as may be amended from time to time by the Board of Trustees for CFSA. The completed Donor Advised Grant Recommendation Form can be submitted via e-mail, fax, or mail. Modifications of the form by the donor will not be accepted. Donor recommendation forms may be submitted at any time.
- Grants must be made to non-profit organizations qualified under section 501(c)(3) of the Internal Revenue Code, or otherwise fill a charitable purpose.
- Grants cannot be made to pre-selected individuals.
- Distributions from the fund are subject to a minimum distribution policy.
- While not all gifts must be distributed in Southern Arizona, most should be allocated to that geographic area of service.
- The donor may recommend a multi-year grant.
- The donor cannot control the timing of when grants are made.
- The minimum amount for a grant is $250.00.
- The donor(s), advisors, and related parties are prohibited from using Donor Advised Funds to secure benefits from the distribution recipient.
- Grants from Donor Advised Funds may not be made to individuals, including grants to entities for the benefit of a specified individual.
- The donor(s), advisors, and related parties may not receive grants, loans, or similar compensation from Donor Advised Funds.
- The donors(s), advisors, and related parties may have no expectation of personal benefit when a distribution is made from the fund, including but not limited to the following:
- Distributions from the fund may not be used to satisfy or pay a pledge.
- Distributions cannot be used to pay memberships or dues.
- Distributions cannot be used to purchase a ticket or table at an event.
- Grants from donor advised funds may not be made to individuals, including an entity (such as a university) for the benefit of a specified individual.
SPENDING POLICY
CFSA utilizes a Spending Policy to determine the amount available for annual grantmaking from endowed funds. Such Spending Policy is currently 4% of the twenty-quarter rolling average market value of the fund minus administration fees, calculated as of June 30 every year.
COMPONENT FUND
The fund will be the property of CFSA and will not be deemed a separate trust fund held by it in a trustee capacity. Funds held at CFSA are intended to provide a permanent and continuous source of philanthropic capital to the community. CFSA has established guidelines to ensure that donor advised funds maintain a consistent level of activity. For inactive funds, defined as a lack of grants made from the fund for a period of two consecutive fiscal years, CFSA reserves the right to distribute 5 percent of the annual fund balance. Prior to making a grant, CFSA will make every effort to contact the primary donor and all listed fund advisors to determine a course of action.
IDENTITY
CFSA may commingle the property of the fund with the property of other component funds held by the CFSA, provided, however, that the separate identity of the fund will be maintained and distributions from the fund will be clearly identified as such to the grantees.
VARIANCE POWER
It is understood and agreed that all assets held in the fund will be subject to the Articles of Incorporation and Bylaws of CFSA, including the powers contained therein for the Board of CFSA (a) to modify, if applicable, any restriction or condition on the distribution of funds relating to a specified charitable purpose or purposes or to a specified charitable organization or organizations if in the sole judgment of the Board (without the necessity of the approval of any participating trustee, custodian, or agent), such restriction or condition becomes, in effect, unnecessary, incapable of fulfillment, or inconsistent with the charitable needs of the community or area served; (b) to replace any participating trustee, custodian, or agent for breach of fiduciary duty under Arizona law; and (c) to replace any participating trustee, custodian, or agent for failure to produce a reasonable rate of return over a reasonable period of time, as determined by the Board.
CONTROL OF ASSETS/MATERIAL RESTRICTION
IRS Rules and Regulations require that CFSA retain exclusive legal control over the assets contributed to the fund. As such, all grant recommendations are advisory only and subject to the review and approval of CFSA. Additionally, the IRS requires that all such funds be free of material restrictions imposed by donors in a manner consistent with the requirements of Section 1.507-2 of the Treasury Regulations.
INVESTMENTS
All endowed funds are automatically invested in CFSA’s endowment pool. Non-endowed funds under $25,000 are automatically invested in a cash equivalent.
For non-endowed funds over $25,000, CFSA offers four non-endowed investment options: a cash equivalent, a global constrained income & growth pool, a global constrained balanced pool, and a global growth and income pool. Primary donors of non-endowed funds over $25,000 may elect an investment allocation at the time they establish the fund. Primary donors may request to change the investment allocation in writing at any time, subject to the approval of CFSA. CFSA reserves the right to manage the timing of any transfers.
INVESTMENT RETURNS
Investment returns are allocated pro-rata to funds on a monthly basis. Due to the inflows and outflows within each fund, the returns are allocated using the average of the daily balances.
ADDITIONAL CONTRIBUTIONS
Once a fund is established, anyone may add to the fund at any time. There is no minimum contribution amount. Additional contributions will be deposited to the fund based on the investment allocation indicated on the Donor Choice Form.
DONOR FUNDRAISING
Fundraising for funds is prohibited unless it is specifically authorized pursuant to a written fundraising plan submitted by the fund advisor to CFSA. Such plans are subject to the review and approval of the CFSA. Please contact Kelly Huber, Vice President for Philanthropy, at khuber@cfsaz.org or call 520-209-2858 for more information.
GIFT ACKNOWLEDGMENT
All gifts are acknowledged in accordance with Internal Revenue Code requirements. Generally, the IRS requires taxpayers to complete and file Form 8283 with their federal income tax returns for gifts of property valued at $5,000 or more. It is the donor’s responsibility to obtain a qualified appraisal for all gifts other than cash and marketable securities for tax purposes.
TAX IMPLICATIONS
As a public charity under Sections 501(c)(3) and 170(b) (1)(a) of the Internal Revenue Code, initial and subsequent contributions made to CFSA currently receive the maximum charitable deduction permitted under state and federal law. Each gift to CFSA is acknowledged with a receipt confirming the date of the gift for the donor’s tax records.
Note: CFSA does not provide legal or tax advice. Donors should consult with their own financial, tax, or legal advisors to determine the best charitable giving strategies for their needs and the tax implications associated with any contribution to CFSA.
FUND FEES
The fund will share a fair portion of the total administrative costs of CFSA. The administrative costs charged against the fund will at all times be reasonable and will be in accordance with the current fee schedule applicable to funds of this type. Any investment management expenses shall be paid by the fund.
COMPLEX GIFT FEE
Gift assets that require special review, such as real estate, limited partnership interests, or closely-held stock, may incur additional costs to cover tax, legal, or other expenses incurred by CFSA in association with the transaction. CFSA reserves the right to charge the fund with respect to such additional costs as CFSA in its sole discretion deems is appropriate. Standard fees will be charged for complex gifts in accordance with the current fee schedule.
CREDIT CARD FEES
Contributions received by credit card result in a processing fee. Such fees may change from time to time. This fee is assessed to cover bank transaction fees and is charged to the fund receiving the contribution. The amount of your credit card donation, less applicable fees, will be credited to your fund.
ANONYMITY
CFSA’s IRS Form 990 is accessible through public online resources but does not disclose individual giving amounts or activity. CFSA offers various levels of anonymity as part of the grant recommendation process. Primary donors may indicate a default preference for anonymity when completing the fund agreement.
PRIVACY POLICY
CFSA deeply values its relationship of trust with its donors and fund advisors. CFSA’s Confidentiality Policy governs the maintenance of personal data and provides that the CFSA will not sell, trade, or exchange information about its donors or fund advisors and will honor the wishes of those who prefer to remain anonymous in all communication materials.