Unique situation for donors
We have a set of donors who are making their post-lifetime plans for their donor advised fund. The fund is currently non-endowed and will have ~$40M added to the fund after the donors’ lifetimes. It has a very narrow area of interest for the grant funding (retrofitting homes for seniors and people with disabilities). The donors would like the pastor and elders of their church to be listed as the successor advisors for the fund. We’ve recommended that most of the fund become endowed as a protection of their intention for those funds. The donors have shared that they would consider endowing $1M of that amount and leaving the remaining amount available to grant (their reasoning being that in case a retirement/senior living facility needs to be built). Has anyone experienced situations like this where the majority of a planned gift to a specific fund will NOT be endowed? Have you run into any issues with it? Any thoughts or recommendations if you’ve had a similar situation?
Answers
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@CarrieMiller This is an interesting situation! I am curious what challenges/issues you suspect may come up?
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This somewhat addresses your question. Our gift acceptance policies direct us to put realized estate gifts, that are not endowed, in a board designated endowment.
5.05.2 Use of Estate Gifts. Unless otherwise designated by the testator, unrestricted estate gifts of $100,000 or larger will be placed in a board designated endowment. Restricted estate gifts of $100,000 or larger will be placed in a board designated endowment to be used for its restricted purpose. Estate gifts of lower amounts may be placed in a board designated endowment at the discretion of the Board of Directors.
Sometimes well written gift acceptance policies can be our best friend!
Kent
Kent C. Weimer, Chartered Advisor in Philanthropy®
Director of Trusts, Estates and Gift Planning
Parkland Foundation
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Some of our concerns:
@JesikaEllis We are concerned with the fund being misused in the future after the pastor and elders associated with the donor are gone. Since the fund would not be completely endowed they could spend down the majority of the fund. We are trying to figure out how to protect the fund and the donor's intentions. The donors do not have any "family/friends" to make them successors.
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@CarrieMiller it's great that you are so determined to protect the donor intent. Could you draft an endowment agreement with the stipulation that if a retirement/senior living facility needed to be built, the corpus could be invaded for that purpose? Perhaps the donor would agree to that.
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