21 Frequently Asked Questions About Establishing A Fund

1. WHY SHOULD I CREATE A DONOR ADVISED FUND?
By creating a Donor Advised Fund, you establish a giving mechanism tailored to meet your specific needs. Most people who create Donor Advised Funds are seeking an uncomplicated, flexible giving option - one with many of the features of a more costly private foundation, but with all the tax benefits of a public charity. Such benefits include:

• A lasting tribute to your commitment to philanthropy and your community
• A flexible tool for planning and carrying out charitable giving
• An easy way to receive professional advice and assistance on charitable giving

Distinct tax advantages
Contributions to a Donor Advised Fund are tax deductible in the year they are made. In addition, they receive the most favorable tax treatment available because 21CF is a public charity.

Type of Contribution

Tax Deductibility
Cash — Up to 50% of adjusted gross income
Long-term appreciated property — Up to 30% of adjusted gross income

Please consult with your professional tax advisor to determine the exact benefits to you, which may be affected by certain limitations in the tax code.

2. WHAT KIND OF ASSETS CAN I CONTRIBUTE?
Almost any asset can be used to start a fund. We can set up funds with cash, securities traded on major exchanges, mutual fund shares, closely held stock, real estate (including farm land), interests in limited partnerships, literature copyrights (and movie and television rights), life insurance, art, and variations and combinations of these.

3. WHAT TYPE OF CONTRIBUTION WOULD GIVE ME THE GREATEST TAX BENEFIT?
Giving long-term, appreciated securities, privately held business interests or other long-term, appreciated assets can generate larger tax benefits for you than giving cash. By contributing the securities to your Donor Advised Fund, you make the same size gift but you pay no capital gains tax whatsoever on gifted assets.

4. IS THERE A MINIMUM OR MAXIMUM SIZE FOR A FUND?
The minimum size for non-endowed and endowed funds is $50,000. With an endowed fund, each donor has the opportunity to create a permanent legacy for their generosity. There is no maximum.

5. WHAT TYPES OF CHARITIES CAN I CONTRIBUTE TO?
You may recommend gifts to any 501(c)(3) public charity you choose anywhere in the United States. We make it easy to carry out your giving wishes-and there are only three restrictions:

• Advised funds may not support lobbying
• Advised funds may not make gifts that will personally benefit a donor or an advisor
• Advised funds may not make gifts that satisfy a pledge obligation

6. WHAT ARE THE COSTS INVOLVED?
The charge to establish a fund is minimal in comparison to supporting a private foundation. Each fund is usually assessed a start-up fee of 5 percent (for non-endowed funds) and 3 percent (for endowed funds) of all contributions during the first calendar year. When a fund is established with 21CF, it will be charged an annual 2 percent (beginning with the second year) to cover investment management, bank fees, administrative support, and general oversight costs.

7. IS THERE A MINIMUM SIZE FOR A GRANT?
Yes. It is $1000.

8. IS THE FUND I ESTABLISH PERMANENT?
Endowed funds are permanent, unless the governing instrument of the fund allows for principal invasions. Our goal is to help individuals with their philanthropy and to build a permanent endowment for Black America.

9. IF I ESTABLISH A DONOR-ADVISED FUND, WHAT HAPPENS AFTER MY DEATH?
After a donor's death, the fund can continue to be advised by individuals named by the fund's founder (the person(s) who signed the fund agreement). The donor can also choose 21CF as the advisor to the fund after death; keeping in mind that the funds be used to meet contemporary needs in the Black community in an area of interest to the Founder.

10. ARE THERE RESTRICTIONS ON THE GRANT SUGGESTIONS I CAN MAKE?
Grant recommendations must conform to the broad charitable guidelines of 21CF. We can accommodate most grant suggestions. By law, you cannot suggest a grant to fulfill a charitable pledge, pay for a membership, buy a ticket to a charitable event, or anything for which you can receive a personal benefit.

11. HOW ELSE CAN I CONTINUE MY CHARITABLE GOALS AFTER DEATH?
After providing for family, you can leave a bequest to the fund you now advise, the endowment of 21CF or you can set up another fund by will.

12. CAN YOU SEND ME THE GRANT CHECK TO GIVE TO THE CHARITY?
No. However, we can send you a copy of the check to assure you that your recommendation has been granted.

13. CAN OTHER PEOPLE CONTRIBUTE TO A FUND I ESTABLISH?
Yes. But we are not set up to manage donors’ fundraising activities, including charity events and mail solicitations.

14. CAN I SUGGEST GRANTS TO ORGANIZATIONS OUTSIDE OF NEW YORK?
Yes. 21CF is a national public foundation that has made grants to nonprofits in most every region of the country and in Africa.

15. CAN I PAY FOR A NEEDY PERSON’S TUITION?
No, you cannot support a particular needy person with a charitable contribution. You may, however, set up a scholarship fund for a group of people (the Senior class, for example) which has met specific criteria (high grade point average, or financial need). Scholarship grants are always directed at the educational institution for tuition payments.

16. CAN YOU HELP ME FIND EFFECTIVE CHARITIES TO SUPPORT?
Yes. Our professional program staff is knowledgeable about many nonprofits and is happy to help.

17. CAN I CHOOSE HOW THE FUNDS I CONTRIBUTE ARE INVESTED?
No. When you give us money, in tax parlance you make a "completed gift." That way you receive the maximum tax deduction allowable. However, we are happy to listen to your suggestions, so that we can tailor our investment to best suit your fund.

18. CAN I HAVE MY MONEY MANAGER HANDLE THE FUND I ESTABLISH?
No. For the same reason that you cannot tell us where to invest the funds you contribute to us. Sometimes, potential donors are so enthusiastic about their own money managers, or so concerned that they cannot dictate where to invest funds after they've contributed them that they may be better served by establishing their own private foundation. While establishing a private foundation is more expensive, and the reporting requirements are fairly strict, donors exert greater control over assets contributed to a private foundation than to a donor advised fund.

19. DO YOU ALWAYS SELL CONTRIBUTIONS OF STOCK?
Yes, if it's publicly traded stock. Obviously, stocks that have restrictions or privately held securities require different treatments. Our finance staff would be happy to speak to you about specific needs you may have.

20. CAN I GIVE ANONYMOUSLY?
Yes. Your Donor Advised Fund is designed to work seamlessly, regardless of whether you wish to be recognized for your generosity or remain anonymous. Just let us know your preference - and we will carry out your wishes. Regardless of your choice, we will generate a letter and a check for the charity and you will receive confirmation of each gift as soon as it is made.

The name of your fund is also your choice. It can carry your name, or the name of someone or something you care about - it’s up to you.

21. CAN I VISIT THE PROGRAMS I WANT/ALREADY SUPPORT?
Yes. In fact 21CF program staff will gladly help to make arrangements on your behalf. From time to time, 21CF will also organize program/community tours to help bridge communication between donors and community leaders.