Donor Advised Funds FAQs

OVERVIEW & BENEFITS

What is a Donor Advised Fund (DAF)?

A donor advised fund (DAF) provides donors with a centralized charitable account. It allows donors to make a charitable contribution, possibly receive an immediate tax deduction (depending on the charitable rules in the donor’s country), and then recommend grants from the fund over time. A donor advised fund can work like having your own foundation, except that it resides within a shared corporate entity with others. Donors can contribute to their funds as frequently as they like, then recommend grants to their favorite charities from the fund when they are ready. Like most DAFs, TrustBridge Global can accept cash and equivalents, securities, and other assets.

How does a Donor Advised Fund work?

Donors make an irrevocable, tax‐deductible (depending on circumstances) contribution of cash, long‐term appreciated securities, or other assets to a charity that sponsors a DAF program, like TrustBridge Global, which then establishes a Foundation Fund in the donors’ name. DAF donors may choose from a variety of investment options, and the proceeds are put into an account from which donors may then make grant recommendations.

Why do donors choose to have a Donor Advised Fund?

DAFs offer donors a way to plan, manage, and potentially grow their charitable giving. Other benefits include:

  • Simplicity – The DAF sponsor organization handles all record‐keeping, disbursements, and tax receipts.

  • Flexibility – The timing of your tax deduction can be separate from your charitable decision making.

  • Lower Cost – DAFs are often far less expensive than other options such as private charitable foundations or trusts.

  • Tax‐efficiency – Contributions are immediately tax‐deductible and any investment growth in the DAF is tax‐free. It is also easy to donate long term appreciated securities, possibly eliminating capital gains taxes and allowing you to support multiple charities from one block of stock.

  • Family Legacy – A DAF is a powerful way to build or continue a tradition of family philanthropy.

  • Privacy, if desired – Donors may choose to remain anonymous to the grant recipient.

How are sponsoring Donor Advised Fund organizations structured?

In the United States, the sponsoring organizations of donor‐advised funds are organized as 501(c)(3) public charities. TrustBridge Global in the United States is recognized as a sponsoring organization of DAFs and a public charity. In Switzerland, TrustBridge Global is structured as a charitable organization both at the cantonal level and the federal level.

HOW DONOR ADVISED FUNDS WORK

How are grant recommendations reviewed and paid?

As a charity that sponsors a DAF program, TrustBridge Global reviews grant recommendations to ensure that the recommendation is in accordance with donor advised fund guidelines, local charity rules, and the overall purpose of the sponsoring organization. Once approved, the funds are transferred electronically to the charity (or sometimes paid by check) depending on circumstances.

Who can open a Donor Advised Fund account?

Individuals, families, companies, foundations, charities, and other entities can open a DAF at TrustBridge Global by filling out a short application and contributing assets.

How much do I need to open a Donor Advised Fund account with TrustBridge Global?

There is no minimum to open a DAF; however, there are minimum monthly cost sharing assessments associated with having one.

What are cost sharing assessments?

As a charity, TrustBridge Global does not charge fees, but rather shares the cost of operating the foundation among the DAFs equitably by assessing them based upon their proportionate balance and/or activity.  These assessments are made against amounts already held within the foundation, not paid separately as a fee might be.

What is the cost of having a Donor Advised Fund with TrustBridge Global?

  • 1st CHF 5 million: 30 basis points (“bps”) or 0.3% annual rate, assessed monthly

  • 2nd CHF 5 million: 25 bps

  • 3rd CHF 5 million: 20 bps

  • Thereafter: 15 bps

All are subject to a minimum assessment of CHF 500 per month. Exceptions to the minimum can be made in limited circumstances. Other activity-based assessments may apply.  See the discussion of grant making below and see also our Solutions Guide available on our website at www.trustbridgeglobal.com.

How long does the approval process take before a grant can be sent?

Grant recommendations are decided upon as soon as possible. For grants that are staying in the donor’s home country, the approval process generally takes less than a week. For international grants, there is a longer due diligence process that needs to be undertaken before grants can be sent across borders.

Should the recipient send a tax receipt when receiving a Donor Advised Fund grant from TrustBridge Global?

You may send an acknowledgement of receipt, but the DAF donor will receive all tax receipts from TrustBridge Global.

GRANT MAKING FAQS

Can I recommend a grant from my TrustBridge Global Donor Advised Fund account to any charity or non-profit organization?

In the United States, TrustBridge Global can make grants to charitable organizations that are tax-exempt under Internal Revenue Code (IRC) Section 501(c)(3), public charities under IRS Section 509(a), or to private operating foundations. TrustBridge Global cannot make grants to private non-operating foundations or directly to individuals.

For grants going outside of the United States, we look at each grant recommendation and charitable organization on a case by case basis and use a due diligence process that looks at a number of factors that qualify an organization to receive grants.

The grantee generally needs to be recognized as a tax-exempt charitable entity in the country of their registration in order to qualify. There are other, country specific qualifications that may also need to be met. If you have a special grant request, please contact TrustBridge Global directly.

Can I recommend grants from my Donor Advised Fund account to international organizations?

TrustBridge Global in Switzerland is qualified to make international grants. These grants require additional due diligence to determine if the charity is eligible to receive international funds. International grants sometimes also require additional monitoring. As a result, TrustBridge Global makes additional assessments for these types of grants. The initial application costs are assessed when you recommend the charity for vetting and then, once the charity is approved, there is an assessment against the grant amount that you would like to send to the charity.

I see on the website that TrustBridge Global is part of a global network of Donor Advised Fund providers. Who are the current network members?

In each country where there is a similar DAF provider, we recommend that donors use these organizations as their in-country experts for DAF services and local giving. These organizations are extremely knowledgeable about their respective local landscapes and provide valuable guidance to donors on effective and meaningful giving in these locations. Currently the members of the TrustBridge Global Network are:

We are continuing to add new network members to expand TrustBridge Global’s capabilities and enable greater ability to help fund global charitable work.

What if I use a Donor Advised Fund outside of the United States?

Because TrustBridge utilizes a network of similar DAF foundations around the globe, there is the ability to use DAF funds from several of our partners outside of the US to make international grants.

How many grants can I recommend in a year?

There is no limit to the number of grants you can recommend in a year.

Are there fees charged for the grants that I recommend?

Again, TrustBridge Global, is a charity, not a business and does not charge fees.  We do make cost sharing assessments on grants, depending on where the funds originate and where they are going. For grants given to U.S. charities from U.S. DAF holders, TrustBridge Global does not make any per-grant cost sharing assessment. For grants to Swiss charities from donors with a Switzerland-based TrustBridge Global DAF, there is no per-grant cost sharing assessment. International grant making is more complex, and TrustBridge Global does make cost sharing assessments related to these types of grants. There is an initial non-refundable 150 CHF (or 150 USD) assessment for TrustBridge Global to work with the international charity on completing the due diligence process necessary for approval. This is assessed when you recommend the charity for vetting and then, once the charity is approved, there is an assessment against the grant amount that you would like to send to the charity.

We and/or one of our network members may also charge a total of 1% on any international grant that we make, subject to a minimum of 300 USD/300 CHF, plus a 25 USD/25 CHF wire assessment. The wire assessment is waived for grants going to either U.S. or Swiss charities. Because of the complexity and regulatory burden of making international grants, we are designed for larger grants and are not set-up to do smaller recurring grants. The total assessment schedule that includes costs to/from other countries is available upon request.

How long does it take to approve an international charity?

The timeframe for approval of an international charity is wholly dependent on the responsiveness of the international charity and their ability to provide the supporting documents necessary for an approval. Once the due diligence package has been completed and submitted to TrustBridge Global, our team can generally finalize approval within a week.

What does the due diligence on an international charity entail?

Our main source of charity referrals is the donor. When a donor would like to support an international charity, we ask that they make an introduction via email. We can then work closely with that charity to walk through the approval process. TrustBridge Global uses a process that is similar to the U.S. Equivalency Determination process to ensure compliance across multiple jurisdictions. TrustBridge Global staff requests that the charity fill out an application/affidavit that also prompts that organization to provide documentation necessary for us to determine whether the organization would be considered charitable under both U.S. and Swiss rules. Legal charity requirements, governing documents, organizational purpose, and financial information is reviewed for compliance with charity law. Additionally, leadership and board members are checked against the applicable sanctions lists in compliance with Anti-Money Laundering/Anti-Terrorist Financing (AML/ATF) laws.

If there is a network member in a country where a grant is being recommended, TrustBridge Global will utilize the network member to complete the due diligence process. This ensures that there is a local foundation confirming that the charity is legally eligible to receive charitable funds in that country. For example, if a U.S. donor is recommending a grant to a charity in South Africa, Tree of Life Foundation will finalize the due diligence process. There are no additional costs for this oversight.

Are there ongoing benefits to the charity to work with TrustBridge Global?

Once a charity is approved by TrustBridge Global, they are given a Charity Fund. This Charity Fund can then be used to take in contributions from donors from virtually anywhere in the world, potentially in a tax‐deductible manner (depending on circumstances). The Charity Fund can be also used to “pool” contributions from donors to minimize assessments, which can then be sent on to the charity to fund their work. This tool allows charities to take in donations from countries where they may not have been able to cultivate donors in the past. 

TrustBridge Global

Zelglistrasse 10,

3608 Thun,

Switzerland

info@trustbridgeglobal.com