Donor Advised Fund
The Wesleyan Investment Foundation Donor Advised Fund program (WIF-DAF) was established by WIF in 2000 to meet the needs of certain donors that wanted to have an immediate tax deduction for their gifts but did not know which charitable organizations they wanted to benefit from these gifts. The program is managed by the staff of the Wesleyan Investment Foundation office and is directed by the Chief Executive Officer. This program allows donors the privilege of recommending future gifts to charitable organizations while taking an immediate tax deduction for the current gift to WIF. Wesleyan Investment Foundation, Inc. is an Indiana Nonprofit corporation recognized by the IRS as a Section 501(c)(3) organization.
Wesleyan Investment Foundation reviews and approves all contributions before accepting them. If a contribution cannot be accepted for any reason (if a donated security is not marketable, for example), it is returned as soon as possible. Upon accepting a contribution, WIF sends the donor a substantiation letter for tax reporting purposes. Once the donation process is complete, a confirmation letter is sent.
Investment of Funds
Assets directed to the WIF-DAF program are invested in a WIF investment savings account for which donors have designated either themselves or another individual as an account advisor. The account advisor can recommend grants from that account. At any time, the account advisor may recommend that all or a portion of the assets in the account be granted to a charitable organization of the advisorís choice. WIF reviews all recommendations and has final authority over grants.
Donors who itemize tax deductions are eligible for a deduction on the day their contribution assets are mailed or delivered to WIF. Only contributions qualify for tax deductions. Grants from the program account are not deductible to donors. Tax regulations specify how gifts are to be valued and the deduction limits. According to IRS regulations, it is the donorís responsibility to determine the date and fair market value of the gift.
Wesleyan Investment Foundation incurs operating expenses, including legal and accounting fees, costs of employees and other operating costs attributable to the donor advised fund program. To cover these costs, an annual assessment fee based on the amount of assets in the donorís account will be directed to WIF. The annual assessment fee is negotiated between WIF and the donor at the time of setting up the account. The annual assessment fee may be a fixed fee or a specified percentage of the amount of assets in the account.
When a donor establishes a donor advised fund account with WIF, the donor, or other person(s) they name, become advisor(s) to the account. This entitles the advisor(s) to recommend grants from the account. If there are joint advisors on the account, WIF will accept recommendations from any of them. Successor advisor(s) may be named so that upon the death of one account advisor, the successor advisor(s) will have advisory privileges. Upon the death of all advisors named on the account, WIF will become the advisor and will distribute funds from the account as it deems appropriate.
An account advisor can recommend a grant from the account by submitting a recommendation with the following information: name of the entity to receive the grant, amount of the grant, and specific purpose for use of the grant, if any. WIF will respond quickly to all grant recommendations, will verify the tax exempt and public charity status of the proposed recipient, and insure that the grants comply with all IRS regulations. For example, current IRS regulations specify that grants cannot fulfill pledges already made by the donor or account advisor, cannot benefit the donor, account advisor or any specific individual, cannot be made for lobbying purposes or to support political campaigns, and can only be made to US registered and IRS classified charities. Donors may not claim a charitable tax deduction for any grant made. If a grant is not approved by WIF, the advisor will be asked to suggest an alternative charitable organization to receive the grant.
Donors can establish new accounts with the Wesleyan Investment Foundation Donor Advised Fund (WIF-DAF) by contributing at least $10,000 in cash or marketable securities to WIF. These gifts are irrevocable and unconditional when received and accepted by WIF and are eligible for an immediate tax deduction, subject to IRS regulations.