- WHAT IS A COMMUNITY FOUNDATION?
- WHAT IS A DONOR ADVISED FUND (DAF)?
- WHAT IS AN ENDOWMENT?
- WHAT IS A GIVING CIRCLE?
- WHY PARTNER WITH US?
- WHO SHOULD CONSIDER A DAF?
- WHAT ARE THE BENEFITS OF A DAF?
- WHY CREATE A DAF?
- WHAT ARE THE ADMINISTRATIVE FEES?
- IS A DONOR ADVISED FUND (DAF) THE SAME AS A FAMILY OR PRIVATE FOUNDATION?
- WHO CAN I GIVE TO FROM MY DAF?
- HOW DO I TRACK MY DAF?
- WHAT ARE THE TAX BENEFITS OF A DAF?
- CAN I GIVE ANONYMOUSLY THROUGH A DAF?
- HOW CAN I USE A DAF TO HONOR A LOVED ONE'S MEMORY?
- HOW DOES AMERICAN MUSLIM FUND SHOWCASE MUSLIM PHILANTHROPY?
- DO I CHOOSE WHERE THE FUNDS GO TO?
- CAN FRIENDS AND FAMILY BE INVOLVED IN MY DAF?
- IS THERE A MINIMUM DISTRIBUTION REQUIREMENT?
- WHAT IS FISCAL SPONSORSHIP?
- CAN I DONATE NON-CASH ASSETS?
- HOW DO I SETUP A DAF?
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. Watch this video to learn more.
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. Watch this video to learn more.
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). Watch this video to learn more.
WHAT IS A GIVING CIRCLE?
A giving circle is a form of philanthropy where groups of individuals donate their own money & time to a pooled fund, deciding together which nonprofit or community project to fund. In doing so, the Giving Circle seeks to increase their awareness of and engagement in the issues covered by the charity. You can learn more about Giving Circles on our site.
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.
WHAT ARE THE ADMINISTRATIVE FEES?
Additional fees for investing may apply.
|Donor Advised Fund Budget||Annual Administrative Fee|
|< $500,000||.65% or $125 (whichever is greater)|
|Endowment Budget||Annual Administrative Fee|
|< $500,000||.75% or $150 (whichever is greater)|
IS A DONOR ADVISED FUND (DAF) THE SAME AS A FAMILY OR PRIVATE FOUNDATION?
No. A donor advised fund in a simple alternative to establishing a family or private foundation. Instead of contending with the onerous financial and legal requirements of maintaining a private foundation, many philanthropists opt instead for donor advised funds that bear their names.
If you already have a foundation, you can terminate it in several straightforward steps, transfer the remaining assets to a donor advised fund at the American Muslim Fund, and continue to pursue your charitable objectives with ease & efficiency through your named fund.
WHO CAN I GIVE TO FROM MY DAF?
A DAF is only allowed to distribute grants to tax exempt 501(c)(3) nonprofit organizations (no political campaigns or lobbyist organizations). For now, AMF only works with organizations operating in the United States.
HOW DO I TRACK MY DAF?
We help you track your donor advised fund in two ways. First, we provide administrative support by providing statements on your donor advised fund account balance, so that you can easily track your donations. At the end of each year, we provide a consolidated tax receipt so you don’t have to track down each individual donation in order to do the taxes.
Second and more importantly, we encourage you to track the collective impact you have had through your donations by assessing how the charities you have supported stack up in their mission delivery. We provide a customized report card that updates you on your supported nonprofits’ progress.
WHAT ARE THE TAX BENEFITS OF A DAF?
There are five primary tax benefits of setting up a DAF:
- Once the funds or assets are contributed to the DAF, you receive the maximum federal tax deduction available in that year immediately, regardless of when the funds are ultimately distributed to charities. The IRS does mandate some limitations, depending upon your adjusted gross income (AGI):
- Deduction for cash – up to 60 % of AGI.
- Deduction for securities and other appreciated assets – up to 30 % of AGI.
- There is a five-year carry-forward for unused deductions.
- Donating appreciated investments has the additional tax benefit of the donor not recognizing capital gains upon contribution. Additionally, the donation of investments would be recognized at the fair market value.
- Your DAF account appreciates tax free from investments employed by American Muslim Fund.
- DAF accounts are not included in estate taxes.
- Your DAF contribution reduces the impact on the alternative minimum tax (AMT).
CAN I GIVE ANONYMOUSLY THROUGH A DAF?
Yes. When we send the report to the organizations of what funding they receive from us, we will let them know it was an anonymous gift. You can also name your DAF without your name in it (Better Society Fund) to avoid any unwanted solicitations.
HOW CAN I USE A DAF TO HONOR A LOVED ONE’S MEMORY?
Donor advised funds present an opportunity to honor a family member or loved one, to celebrate a milestone, or to create a family legacy or a meaningful memorial tribute. You may name your donor advised fund after you or in honor of a family member, a friend or an organization (e.g., the Adam & Soraya Malik Foundation). Any distributions from the fund carry your family name now and for the next generation. Once it’s established, anyone can make tax-deductible contributions to your fund at any time, in any amount.
HOW DOES AMERICAN MUSLIM FUND SHOWCASE MUSLIM PHILANTHROPY?
When you support our operations or open a donor advised fund with us, you are contributing to many organizations that we help.
When we distribute funds from donor advised funds to secular nonprofits, the donations are clearly marked as something from the American Muslim Fund and hence the Muslim community. These consolidated donations speak louder than individual or anonymized donations and serve to showcase to the wider society the collective power of Muslim philanthropy.
DO I CHOOSE WHERE THE FUNDS GO TO?
Yes. Once your assets are in a donor advised funds you receive the tax deduction for your gift. At that point AMF has legal control over the funds and follows your recommendation of where to send the funds to at any time.
AMF carefully reviews all grant recommendations and conducts due diligence checks to ensure that all recommended recipients are legitimate charities and are eligible to receive the grant. If nonprofit does not meet our criteria, we will make every effort to suggest alternatives that fulfill your philanthropic intent.
CAN FRIENDS AND FAMILY BE INVOLVED IN MY DAF?
Yes. When you create your fund, you may nominate a family member, friend, or other beneficiary to serve as the fund’s advisor, or make decisions about the fund.
Anyone can make contributions towards your DAF, but only those who have signed our contract or those designated on the account may recommend distributions to charities.
IS THERE A MINIMUM DISTRIBUTION REQUIREMENT?
There is no annual minimum distribution requirement for donor advised funds, unlike private foundations which are required to distribute 5% of their assets. However, to ensure that donated funds do reach worthwhile causes, we ask that you make a distribution at least once in any three year period.
Fiscal sponsorship refers to the practice of non-profit organizations offering their legal and tax-exempt status to groups—typically projects—engaged in activities related to the sponsoring organization’s mission.
CAN I DONATE NON-CASH ASSETS?
Yes. You may donate to your donor advised fund complex or unusual assets such as real estate or appreciated securities (stocks, mutual funds, bitcoin, etc.). By transferring such assets or limited partnership interests to a donor advised fund, 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. Contact us to discuss more.