Donor Advised Funds

WHAT IS A DONOR ADVISED FUND?

A donor advised fund is a charitable giving vehicle where an individual, family, or corporation makes an irrevocable, tax-deductible contribution of cash, securities, or other property to WELS Foundation and at any time thereafter can recommend grant distributions to WELS ministries.

The donor advised fund has been popular in recent years with the higher threshold for itemizing on taxes. People set up a donor advised fund to bunch gifts and itemize deductions in a particular year.

The WELS donor advised fund program provides an alternative to the private family foundation. You can accomplish many of the same goals but with far less administrative work and expense.

WHAT ARE THE FEATURES?

  • Gift size: The minimum initial gift is $10,000.
  • Individual: You may name your donor advised fund. You, or the persons you designate, may recommend distributions to organizations listed in the WELS Yearbook from your fund—anonymously if you so choose.
  • Distribution recommendations: The minimum amount that may be recommended is $250. It is encouraged that each fund distributes at least five percent of its asset value annually.
  • Lasting impact: You may designate others to continue recommending distributions after your lifetime (usually for a period of 20 years) to support your home congregation or other favorite WELS ministries.

WHAT ARE THE BENEFITS?

  • Joy: Arrange to benefit the areas of the Lord’s work that are closest to your heart, including WELS congregations, mission work, schools, and other ministries.
  • Tax savings: You receive an income tax charitable deduction in the year of your gift to your donor advised fund. As with all gifts of long-term appreciated securities, none of the appreciation is subject to capital gains tax.
  • Recommend gifts when ready: Contribute to your donor advised fund this year and decide later which WELS ministries you want to support.
  • Encourage family stewardship: Help your children and other loved ones experience the joy of giving by involving them in the decision-making process for the grant recommendations.

Donor Advised Fund FAQs

You have two investment options: a money market account and the WELS Balanced Fund.

Money market account: ideal if you want to make distributions over a short period of time. There are lower investment returns, but no market volatility.

WELS Balanced Fund: more appropriate for longer-term distributions. There is potential for growth over time, but also potential market volatility.

View the latest WELS Balanced Fund Fact sheet

You can recommend distributions to 501(c)(3) organizations that are either WELS ministries or ministries in fellowship with WELS. On an exception basis, distributions to non-WELS charities may be considered.

Recommend distributions to your donor advised fund

The minimum distribution from your donor advised fund is $250, and the maximum distribution that you can make is 100% of the fund value.

You can give cash, marketable securities, and/or other assets (subject to WELS Foundation board approval) to your donor advised fund at any time. Gifts of appreciated securities or real estate may also benefit you by avoiding potential capital gains tax.

Contact us to add funds to your donor advised fund

The donor advised fund fee schedule is consistent with that of larger discount investment companies (like Schwab, Fidelity, and Vanguard).

FUNDING ASSET MIN. INITIAL GIFTANNUAL ADMINISTRATION FEE*DISTRIBUTION FEE
Cash$10,000First $500,000: 0.60%**0.15% per distribution
Marketable Securities$10,000$500,001 to $1,000,000: 0.30%0.15% per distribution
Illiquid Property (board approval required)$10,000$1,000,001 to $2,500,000: 0.15%0.15% per distribution
More than $2,500,000: Call0.15% per distribution

*Admin fees processed quarterly
**or $100 (whichever is greater)

Featured Video: Donor Advised Funds

NEED ASSISTANCE?

Christian giving counselors are available to provide you with answers and knowledgeable advice.

The information contained on this website is not intended as legal advice. For legal and tax advice, WELS Foundation encourages you to consult an attorney or tax professional. The figures cited in the examples on this website are for hypothetical purposes only and are subject to change. References to estate and income tax include federal taxes only. Individual state taxes and/or state law may impact your results.

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