Understanding Donor Intent

"If you intend to dedicate large sums of money to charity, you should think hard about what purpose you want that money to serve. If you intend to have others collaborate in your philanthropic giving, especially after your death, you should not assume that your successors will instinctively understand your wishes [or] that they will necessarily want to be constrained by them. If your intentions as a donor are to be respected, you need to clarify what you want your assets to accomplish and create safeguards that help ensure their intended disposition–¦.You ignore donor intent at your peril."

– Jeffery Cain, Protecting Donor Intent

You likely have a vision for your charitable giving.

Do those around you share that same vision? When you are gone, will your charitable legacy remain intact or succumb to the whims of future generations?

Sadly, it is all too common for charitable capital to stray from the original donor's wishes and the principles of liberty. This drift away from the donor's intent can come from a number of sources:

  • Most commonly, the donor simply did not put his or her charitable intentions in a way that could be followed after his death. This is what happened to so many of the big foundations, such as the Ford and Rockefeller Foundations.
  • Sometimes, a donor's charitable dollars are entrusted to a group that changes over time or, through growth, decides there are other opportunities that could be funded with a donor's dollars while still ostensibly following the donor's wishes. You can see this in the Robertson case at Princeton University.
  • And sometimes, a donor's wishes can be clear, but future generations simply make a decision about what is "best" for those charitable dollars. Howard Pew clearly intended for his Freedom Trust to extol the free market and inform people of "the paralyzing effects of government controls on the lives and activities of people," but those principles have eroded from the giving philosophy of the Pew Charitable Trusts over time.

Protecting Your Intent Starts Now

We often think of donor intent being a problem after one's lifetime, though institutions can fail to meet a donor's wishes even in life, particularly if the donor does not have the time, energy, or ability to keep close watch on the way an organization uses a gift, or if the donor simply doesn't know that an organization he or she funds because of one project is separately engaged in many things that he or she opposes.

Established in 1999, DonorsTrust serves as a check against its client's charitable dollars drifting into areas of which they would disapprove. DonorsTrust is the sole donor-advised fund dedicated to safeguarding the charitable intentions of donors who are committed to promoting a free society through the ideals of limited government, personal responsibility, and free enterprise. We differentiate ourselves from other community foundations and donor-advised funds by providing a safe, efficient, and principled philanthropic vehicle.

Frequently Asked Questions

You wish to keep your charitable giving private, especially gifts funding sensitive or controversial issues. Set up a DonorsTrust account and ask that your gifts remain anonymous. Know that any contributions to your DonorsTrust account that have to be reported to the IRS will not become public information. Unlike with private foundations, gifts from your account will remain as anonymous as you request.

Appreciated Stock
You own appreciated stock and want to distribute it to a number of charities and avoid the capital gains tax. Make one transfer of stock to DonorsTrust and receive the market value for your gift. Then at your leisure, request DonorsTrust to distribute multiple gifts from the transfer.

Closely Held Stock
You possess closely or privately held stock and want to avoid the capital gains tax while taking the best possible tax deduction. Contribute the stock to DonorsTrust and calculate your tax deduction based on the market value of the stock rather than the cost basis. At your leisure, make any number of charitable gifts from the single transfer.

Unexpected Windfall
You just received a bonus, inheritance, or trust fund distribution. You need to give to charity to reduce your tax burden but don't have time right now to figure out where and how much. Open an account at DonorsTrust, immediately receive your full tax deduction, and disburse charitable gifts at your leisure.

You wonder if your family will eventually give your hard-won earnings to groups with which you disagree. Open a DonorsTrust account and write a specific charitable intent statement-even listing what charities you will or won't fund. Give your family the opportunity to preserve your intent as successor advisors to your account and rely on DonorsTrust to protect and enforce it.

Community Foundation
You give through your local community foundation but wonder if they'll approve your grant requests when your trusted contact leaves or your grantees fall on the wrong side of the current political trend. Set up a new account by making a grant disbursement to DonorsTrust, a public charity that serves as a philosophical community foundation. DonorsTrust will always respect grant requests that fall within the DonorsTrust mission and purpose.

Commercial Donor-Advised Fund
You manage your charitable giving through a commercial fund like Vanguard or Fidelity. However, given your philosophical principles, you like the idea of being with a fund that was built on those same values and really knows the groups you support. Make a grant disbursement from your account to DonorsTrust (a public charity) and establish a new account at DonorsTrust where you receive personal attention and a solid mission to protect your intent to support liberty.

Private Foundation
You enjoy the benefits of your foundation but wish to rid yourself of the hassles of meeting the 5% payout deadline, paying lawyers and staff to comply with regulations, and seeing your grant disbursements on the Internet 24/7. As a public charity, DonorsTrust can accept your foundation's payout and immediately relieve you of the payout deadline. Grants are disbursed at your discretion, all IRS forms are completed for you, and total anonymity is possible.

You make annual gifts to a number of charities but are tired of writing checks, managing the IRS receipts, and remembering how much and when you gave to whom. Write one check to DonorsTrust and receive one IRS receipt. From your account, request gifts to your favorite charities. DonorsTrust will cut the checks, track the receipts, and send you quarterly activity reports.

You wish to give a large gift to a charity but don't want to just write a blank check. Open a DonorsTrust account with the gift and immediately receive your full tax deduction. Request gifts from your account with the assurance that you may legally direct the money elsewhere if the project or the mission of the organization sours.

Additional questions?

Contact us to have a qualified representative answer your questions about DonorsTrust. Thank you for your interest.

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