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Bequest from Donor Advised Fund

  • 1.  Bequest from Donor Advised Fund

    Posted 02-14-2019 01:47 PM
    Hi all, I'm new to taking bequests from donor advised funds. We didn't have any at my previous institutions. Is there anything different to booking these from a regular bequest? Is a copy of their beneficiary designation form appropriate documentation? If I am missing something, please let me know. Thanks, LaDona -- *LaDona Fazio* Director of Advancement Services and Data Analytics St. Mark's School 25 Marlboro Road Southborough, MA 01772 Office: 508-786-6223


  • 2.  Re: Bequest from Donor Advised Fund

    Posted 02-14-2019 01:55 PM
    A bit more information is needed. A DAF normally does not bequeath money. So I am assuming that an individual either stipulated that upon their death an application would be made to the DAF for a grant - or when they gave to the DAF there was some sort of beneficiary designation. Anyway, it would be helpful to see all of the documentation you have been provided. But absent that you probably would record the DAF gift like any other with soft-credit to the deceased individual. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Thu, Feb 14, 2019 at 2:46 PM Fazio, LaDona


  • 3.  Re: Bequest from Donor Advised Fund

    Posted 02-14-2019 02:16 PM
    A bit more info... As I am new to SM and still going through gifts and documentation, I found that our Director of Planned Giving instructed my predecessor to count a bequest from a DAF based off of a conversation he had with the donor. Clearly, that isn't appropriate and I am requiring him to get appropriate documentation, otherwise I am removing it from the books. My understanding is that instead of naming a successor to make grants from their donor-advised fund, he would like to name us to receive the balance left in the account. According to our Director of PG, plannedgiving.com, says that a donor can do this, I just don't know if we treat it differently than a regular bequest, other than who the legal donor is. Also, since the donor can likely change the beneficiary, should be even count it? Is it like life insurance policy that we don't own, so we don't count it? Also, because the value of the DAF can fluctuate so much depending on how much they contribute annually and how many grants they recommend, how can we accurately value it? A bit more information is needed. A DAF normally does not bequeath money. So I am assuming that an individual either stipulated that upon their death an application would be made to the DAF for a grant - or when they gave to the DAF there was some sort of beneficiary designation. Anyway, it would be helpful to see all of the documentation you have been provided. But absent that you probably would record the DAF gift like any other with soft-credit to the deceased individual. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 <[log%20in%20to%20unmask]>[log in to unmask]


  • 4.  Re: Bequest from Donor Advised Fund

    Posted 02-14-2019 02:37 PM
    The individual *cannot* obligate the DAF to give any amount to any organization. Furthermore, there is no guarantee that there will be any funds available for the estate to recommend at the time of death. While such an indication of intent might be possible there is nothing to count. John John H. Taylor Principal, John H. Taylor Consulting 2604 Sevier St. Durham, NC 27705 johntaylorconsulting@gmail.com 919.816.5903 (cell/text) Serving the Advancement Community Since 1987 On Thu, Feb 14, 2019 at 3:15 PM Fazio, LaDona


  • 5.  RE: Re: Bequest from Donor Advised Fund

    Posted 08-25-2020 10:24 AM
    John –

    This issue just came up at GT and the concept is becoming more "grey" in my opinion….

    This particular donors DAF has a provision for directing the balance of the DAF to a charity (provided they are in good standing) at the time of the donors death.  Could one treat it much the same way as a revocable gift (bequest).  Same unknown exist in both cases.  The donor would need to povide documentation that the gift intent is in place.

    You also have DAF's actively working to get into planned giving:

    https://www.donorstrust.org/donor-advised-funds/planned-giving-with-a-donor-advised-fund/

    Are your thoughts about the subject below still black and white?

    Mark

    ------------------------------
    Mark Sanders
    Director of Development Information Systems
    Georgia Tech
    mark.sanders@gatech.edu
    ------------------------------



  • 6.  RE: Re: Bequest from Donor Advised Fund

    Posted 08-25-2020 11:15 AM
    Mark, I would have to read the contract between the donor and the DAF to verify what is going on.  The few similar arrangements I have seen only recommend that the DAF send funds to specific nonprofit organizations upon their death.  However, that is an agreement between the donor and the DAF - not between you and they (I doubt you are a signatory).

    Sure, you can probably make a note of this desire in your development system.  However, you cannot "book" anything on the individual's record because the DAF will be the donor.  If, however, you can get the DAF to put in writing that they will try to honor the wishes of the donor, then you might be able to record something you can count.

    But remember, DAFs CANNOT pay off pledges - revocable or otherwise - if they are aware of the promise.  So I cannot see how you could record a thing on the original donor's record unless they promise to have the estate satisfy the bequest if the DAF doesn't.

    John

    John H. Taylor
    Principal
    John H. Taylor Consulting, LLC
    2604 Sevier St.
    Durham, NC   27705
    919.816.5903 (cell/text)

    Serving the Advancement Community Since 1987







  • 7.  RE: Re: Bequest from Donor Advised Fund

    Posted 08-25-2020 02:39 PM
    Some of the logic behind allowing (limited) counting of documented bequest intentions is that the research shows that those intentions are very rarely revised downward or eliminated. The main uncertainty was the exact timing of the gift, rather than whether and how much.

    With DAFs, I don't think we yet have the evidence that those end-of-life designations are as reliable as in wills, so I'd be hesitant to treat them the same way. Indeed, one of the selling points in the link you posted was the ease with which designations could be changed, without requiring a lawyer or incurring a service fee. I'm especially sceptical when a successor advisor is appointed who can undo prior DAF plans.




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