AEF is pleased to announce that it has partnered with Benevity, an innovative software provider that hopes to change the world by building optional micro-donations into everyday transactions.
Benevity Social Ventures, Inc., (www.benevity.org) has developed a micro-donation processing platform that lets companies embed optional, user-directed, tax-receiptable charitable giving opportunities and corporate matching programs into existing business transactions, such as online purchases, account and online banking interfaces, loyalty programs, gift cards and employee giving.
Benevity’s goal is to integrate the Benevity platform into as many online and other businesses as possible, providing the general public with a ubiquitous, convenient means to donate to the charities of their choice, as part of their everyday transactions and interactions with businesses they frequent.
“Quite simply, we hope to change the philanthropic landscape from one that is arguably too reliant on high net worth individuals to a more grassroots movement, where through the power of aggregation and everyday transactions, people from all walks of life can make a difference to the communities and causes that matter to them”, describes Bryan de Lottinville, CEO and co-founder of Benevity. “Through an independent and progressive Donor Advised Fund provider like AEF, all businesses, their customers and employees can utilize the Benevity platform to make donations to any U.S. charity, regardless of the size of the gift”.
Benevity makes it easy for companies to build authentic and impactful cause marketing, workplace giving and other social responsibility initiatives that increase engagement, brand differentiation and return on investment, while tying directly to business activities that drive the company’s bottom line. To find out more or request a demo, please visit www.benevity.org or watch the short video at www.benevity.org/goodness3.0
Scholarships are a wonderful way to support promising and deserving students by assisting them with the costs of their education. Donors often see such scholarships as a meaningful way to honor or memorialize friends, teachers, or family members.
AEF can make distributions from a DAF to support a scholarship program administered by a school or other charitable organization. AEF relies on the school and its scholarship selection committee to advertise, award, and administer the scholarship. AEF does not select the students.
An example:
Mr. Smith worked with the Principal of ABC High School to establish a scholarship in memory of his mother, who was a teacher at that school. They agreed on a target annual funding level, and the selection criteria (Smith family members are not eligible to apply).
Each year, the selection committee administers the program, and chooses the scholarship awardees. (Mr. Smith may be on the scholarship committee, but may not have a majority vote).
Each year, Mr. Smith recommends a grant from his Donor Advised Fund to ABC High School to fund the scholarship awards.
We have found that schools are very happy to participate in this type of arrangement. It gives them excellent publicity benefits. It works nicely with public schools, since the assets that fund the scholarships are off balance sheet.
Our donors like the flexibility and accountability inherent in this plan. They like having the ability to redirect the assets if the school is not administering the plan as was agreed.
Because of changes in the tax laws, many individuals are now able to convert their traditional IRA accounts to Roth IRA accounts. One of the biggest stumbling blocks in deciding to convert, however, may be your reluctance to pay taxes on the converted amounts. You may be interested in learning that:
You can make a Roth conversion free of federal taxes through an offsetting, tax deductible contribution to a Donor Advised Fund (DAF) at AEF.
You can create a lasting legacy for family philanthropy.
You can stay involved in these meaningful assets by making grants to your favorite charities on your own time table.
You establish a Donor Advised Fund with AEF as a companion to the converted Roth account.
You contribute cash or a variety of asset types to fund the DAF. Amount contributed can be more or less than amount converted.
The income tax deduction on any amount you contribute to the DAF offsets the increased federal tax liability resulting from the Roth conversion.
You realize the full intended benefits of the converted Roth account and create a legacy for your family’s philanthropy.
Summary of Tax Benefits (Note 1)
No federal income tax on the Roth conversion.
No capital gains tax on long-term, appreciated assets contributed to the DAF.
Larger tax-free withdrawals from the Roth since there are no required minimum distributions.
No estate taxes on the DAF.
Assets in the Roth and the DAF grow tax-free.
Note 1
Annual AGI limits on charitable contributions and 5 year carry over provisions apply.
For contributions to the DAF, youshould use assets outside of your traditional IRA accounts. Using traditional IRA funds for these purposes will generate an income tax liability and may generate a 10% early withdrawal penalty.
There may be state tax consequences if you reside in certain states.
Through an AEF Donor Advised Fund, you have a simple, cost effective and tax-wise vehicle to create a legacy for family philanthropy over generations to come.
In addition, through AEF you have:
Investment choice and true independence
AEF’s unique independence provides greater flexibility in investment options free of conflicts of interest that may arise from a firm’s proprietary products. You can recommend where your investments are custodied.
Flexible investment management
You can recommend an independent investment advisor to manage the assets in your Donor Advised Funds.
For more information please call 1-888-440-4233
This post is for informational purposes, and is not meant as specific investment or tax advice. Individuals should consult with their own advisors for specific investment and tax advice.
Donor Advised Funds can be used to engage young family members in philanthropy. Many of our donors are experiencing the satisfaction of using philanthropy as a parenting tool to instill and pass on family values. This is often true for grandparents where bonding with the grandchildren is especially strong.
A Donor Advised Fund can be a simple and effective tool to help the next generation acquire an understanding of caring for others as an enduring family value. I want to share with you a simple letter from one of our donor/grandparents that demonstrates how they reached out to their granddaughters on her 10th birthday and the heart-felt response from the grandchild. Can you imagine how his child will remember her grandparents for years to come from this simple act of kindness?
The letter reads:
“From Granny Pat and Pop,
Dear Karena,
Every year on your birthday, you have the opportunity to give something to someone else. This year you will be 10 years old, and through a special fund that we have set up, you may make a gift of $100 to an organization. It could be a church, a school, or any other organization that you think is doing good work.
You can talk with your parents if you want to about the organization you want to support. We are both proud of you and want you to learn that great joy comes from helping others.
Your birthday is coming up soon, and we would like you to write to us and let us know where you want us to send the $100, and why you think it’s a good charity to support. What are they doing that appeals to you?
Remember that birthdays are a lot of fun, and you always get lots of stuff, but there is lots of joy when you think of others as well as yourself.
Your loving grandparents,
Pop and Granny Pat”
and here Karena’s letter back
How do you teach philanthropy? We welcome your stories.
