Frequently Asked Questions

WHAT IS A COMMUNITY FOUNDATION?

A community foundation is a publicly supported philanthropic institution governed by a board, which serves its donors, the nonprofit sector, and the community.

WHAT IS A DONOR ADVISED FUND (DAF)?

A DAF is a giving vehicle that provides you with immediate tax
benefits & allows you to support your charities of choice through grant recommendations on your own timetable.

WHAT IS AN ENDOWMENT?

An endowment is a financial resource, in the form of a donation to be used as an investment, which generates an annual return based on the principal of its assets (cash, stock, property, will, insurance, etc).

WHY PARTNER WITH US?

You’ll receive individualized care & attention with your philanthropic goals. We understand the sanctity of religiously mandated almsgiving & want to help you create an impact. Our ethos is to create positive fundraising experiences. Based on the charities you support, we will provide you with a grading system & an annual, semi-annual or quarterly update (your preference).

WHO SHOULD CONSIDER A DAF?

Donors who make cumulative philanthropic contributions of $2,500 or more and want an efficient, cost-effective solution that gives them the flexibility to make grants to multiple charities and may not already have a private or family foundation. We chose $2,500 because the Giving USA 2016 Report mentioned the average household gives $2,974 and we wanted to provide a grassroots opportunity to evolve, diversify, and cultivate philanthropy.

WHAT ARE THE BENEFITS OF A DAF?

  • Give anonymously if you so choose
  • Showcase Muslim philanthropy and support to nonprofits, increasing good-will for the American Muslim community
  • A low-cost, flexible giving vehicle that is easy to establish
  • Administrative convenience (e.g., consolidation of the management & tracking of tax receipts associated with charitable donations)
  • Give complex or unusual assets at fair market value (e.g., real estate, closely-held stock)
  • Opportunity to name the fund after you or in honor of a family member, a friend or an organization (e.g., the Adam & Soraya Malik Foundation or the Davis Family Foundation)
  • An efficient vehicle for supporting meaningful issues & causes, in the United States & beyond
  • No annual minimum distribution requirements, unlike private foundations which are required to distribute 5% of assets
  • Receive the maximum tax deduction available in the year the contribution is made
  • Avoid many of the restrictions imposed on private foundations
  • Deduct the value of your gift for tax purposes; yet distribute grants on your own timetable
  • Avoid punitive estate taxes on gifts that you & your beneficiaries make
  • Avoid costly capital gains taxes while realizing the maximum tax-deductibility of your donation with a gift of real estate, appreciated stocks, or other complex assets

WHY CREATE A DAF?

  • To use assets such as securities, real estate or a business
    By transferring such assets or limited partnership interests to a DAF, you can avoid capital gains taxes & receive an immediate fair-market-value tax deduction, while also supporting the causes you care about. (Timing is critical. To enjoy the tax benefits, The American Muslim Fund must be included in your planning before the sale is initiated.)
  • To create a family legacy
    You can name a DAF for your family, & grants issued from that fund will carry your family’s name now & for the next generation. It’s a gift that can keep on growing. Once it’s established, anyone can make tax-deductible contributions to your fund at any time, in any amount. Involve family in your philanthropy; when you create your fund, you will make decisions about its use, distributions & who will make decisions when you pass away or are no longer able to serve as the fund’s advisor. You may designate your children or other beneficiary to recommend grants, ensuring next-generation family participation.
  • To celebrate a milestone or honor a loved one’s memory
    If you or someone you love is celebrating a special occasion, establish a DAF to mark this important milestone. Honor a birth, graduation, wedding or anniversary; or create a meaningful memorial tribute. In the process, you’ll be educating others about the important value of religiously mandated almsgiving and general philanthropy.

  • To create an alternative to or replace a private foundation
    Instead of contending with the onerous financial & legal requirements of maintaining a foundation, many philanthropists opt instead for DAFs that bear their names. If you already have a foundation, you can terminate it in several straightforward steps, transfer the remaining assets to a DAF at the American Muslim Fund, & continue to pursue your charitable objectives with ease & efficiency through your named fund.

Find out more & fill out a DAF Inquiry Form.

WHAT ARE THE ADMINISTRATIVE FEES?

If you are opening a Donor Advised Fund with 100% zakat (religiously mandated almsgiving), there will be no annual administrative fee. However, if you utilize any portion of your DAF for sadaqa (general charity), the following schedule follows:

Donor Advised Fund Budget

Annual Administrative Fee

< $500,000

.65% or $125 (whichever is greater)

Next $500,000

.325%
Next $1,500,000

.225%

Next $2,499,999

.2%

> $5,000,000

1.75%