Important Notice for DAF donors
As a courtesy to our donors, OCF is sharing a reminder about federal rules governing grants from donor advised funds, with an emphasis on certain aspects of these rules.
When a donor gives assets to OCF to create a fund, those contributions become assets of OCF and come under OCF’s legal control. Due to the fact that the donor no longer owns those assets, OCF will not make an advised fund grant that will fulfill a personal pledge made by a donor because the payment may be viewed by the IRS as relieving the donor of a personal financial obligation, which is a more than incidental benefit to the donor. If you are asked to make a pledge, you can let the organization know that you cannot commit to a pledge but that your intent will be to recommend a grant from your OCF advised fund. You can recommend a single grant or a multi-year grant from a donor advised fund, as long as it does not satisfy a personal pledge.
The donor advised fund also prohibits donors and advisors, or any person related to a donor or advisor, to receive any benefits of monetary value as the result of a grant. Examples of prohibited benefits include, but are not limited to:
- seating at ticketed fundraising events,
- parking privileges, and
- tickets to performances, sporting events, or public events.
Violations may result in a penalty on the person who makes the grant recommendation and on the party receiving the prohibited benefit. The IRS may also impose a penalty on OCF for making a distribution that confers a prohibited benefit.
In addition, donors, advisors, or related parties cannot receive grants, loans, compensation, or similar payments from donor advised funds. For example, OCF cannot reimburse travel expenses or similar incidental expenses from a donor advised fund.
As always, our staff is happy to answer any questions you may have. Our goal is to help you continue to support the causes you care about while fully complying with legal regulations. We appreciate your support of the community. We look forward to working with you for many years to come.
Best wishes,
Kirsten Kilchenstein
Vice President of Donor Relations