Rejoice! There is excellent news to report! All the committees have approved the ADVENTIST DONOR GIFT FUND (ADGF), the application to BNY Mellon has been submitted, and the fees have been paid. Lord willing, the ADGF will launch in May 2022.
What is the ADGF?
For those wondering what the ADGF is, it is essentially a Donor-Advised Fund (DAF) branded specifically for the Seventh-day Adventist Church. Many charitable organizations, community foundations, and investment companies offer DAFs. For example, National Philanthropic Trust, National Christian Foundation, Jewish Communal Fund, Fidelity, Schwab, and Vanguard all offer DAFs, and National Philanthropic Trust provides the following definition for one:
A DONOR-ADVISED FUND, or DAF, is a giving account established at a public charity. It allows donors to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time. Donors can contribute to the fund as frequently as they like, and then recommend grants to their favorite charitable organizations whenever it makes sense for them. (https://www.nptrust.org/what-is-a-donor-advised-fund/)
If an organization has ever wished they could have a DAF but found the costs too high to sponsor one, they may now choose to participate in the ADGF. There are no fees for an organization to join and no charges for continued participation. The donors’ account will pay a small management fee when funds are invested within the DAF, similar to a fee paid when investing in a mutual fund, but these fees are competitive with other DAFs. NAD Planned Giving & Trust Services (PGTS) has partnered with BNY Mellon Charitable Gift Fund to offer this ADGF at no cost to all SDA Yearbook organizations in the NAD. The ADGF will result in guaranteed distributions to participating Seventh-day Adventist organizations, and BNY Mellon will take care of all the back-office functions required to run the DAF.
For more information on donor-advised funds, see National Philanthropic Trust’s 2021 DAF REPORT https://www.nptrust.org/reports/daf-report/
How does the ADGF Work?
Minimum Contributions
A donor’s minimum donation to open an ADGF account is $1,000. Additional minimum contributions to an existing ADGF are $250.
Two Sub-fund Accounts
When a donor opens an account, there will be two sub-funds. One, the Adventist-only sub-fund, will be restricted to a single Seventh-day Adventist yearbook organization participating in the ADGF. It is recommended that 25 percent of all contributions to the ADGF will go into this sub-fund. The donor can increase the percentage that goes into this sub-fund when they set up their account.
The other sub-fund, the discretionary sub-fund, can be used to make grants to any charitable organization recognized by the IRS. It is recommended that 75 percent of all contributions to the ADGF will go into this sub-fund, but again the donor has the option of changing this when they set up their fund.
Making Grants
Donors may request grants of at least $250 to charitable organizations at any time. All grants from the Adventist-only sub-fund must go to the participating Seventh-day Adventist organization named when the fund is established.
Grants from the discretionary sub-fund may go to any qualifying charitable organization as specified by the IRS tax code. Grants could go to the same organization named on the donor’s Adventist-only sub-fund, to other Adventist organizations, to Adventist Supporting organizations such as those who are part of Adventist Laymen Services & Industries (ASI), or to non-Adventist organizations such as the American Red Cross or United Way.
Invested Funds
Donors may recommend one of eleven different investment strategies for the funds while they wait to request grants from the ADGF to charitable organizations. The investment strategies include a simple interest-bearing account, fixed income, and even securities. Any gains realized from the investments will be added to the donor’s gift fund balance to be granted to charitable organizations. Consequently, any losses realized by the investment will be subtracted from the gift fund balance resulting in fewer funds available for grants to charitable organizations.
Managing the Fund
Each donor will have a secure online portal to view account balances, see contribution history, recommend investment options, and request grants to charitable organizations.
Death Beneficiaries
When the donor, or donors, die, any funds remaining in the Adventist-only sub-fund will automatically be distributed to the named participating Adventist organization. The donor may also designate an organization, or multiple organizations, to receive the balance of the discretionary sub-fund when they die. Or, a donor could name a successor advisor, such as a child, which would allow the successor to request grants to be made to charitable organizations.
What Organizations may Participate?
All Seventh-day Adventist Yearbook organizations in the United States may become participating organizations in the ADGF. Organizations such as universities, secondary schools, hospitals, retirement centers, publishing houses, media ministries, and conferences. Organizations not specifically named in the yearbook but connected to a conference, such as local churches and primary schools, may still receive gifts from the ADGF through their local conference.
How to become a Participating Organization?
An employee from the SDA Yearbook organization must view an ADGF training video to become a participating organization. At the end of the video, the individual must pass a simple quiz and supply information about their Adventist Yearbook organization. Once the NAD PGTS office receives the organization’s data, that organization will be added to the online list of ADGF participating organizations.
Participating Organization’s Role
When an organization becomes an ADGF participating organization, it may promote the ADGF as its own by marketing it to its members and donors. Marketing materials will be made available to participating organizations to inform donors about this fantastic new tool. Participating organizations will also be encouraged to add information about the ADGF to their PGTS websites to educate donors about this new giving method. Organizations may steward donors who have listed them as the participating organization on their Adventist-only sub-account.
Who may donate?
All individuals who have reached the age of majority in their state and have a USA bank account may create an account with the ADGF. Two or more donors may operate an ADGF account jointly, such as a husband and wife. Donors do not need to be Adventist members, nor are they required to be citizens of, or live in, the U.S to contribute to the ADGF.
Prospective donors will need to answer some questions on the ADGF application, which will then be verified by BNY Mellon. The application will ask for all the typical contact, demographic, and residency information as well as employment information, income, and a detailed source of the donor’s wealth. There will also be questions concerning current or past politically exposed persons (PEP). These PEPs are people who, through their prominent position or influence, are more susceptible to being involved in bribery or corruption, such as heads of state, high-ranking military personnel, and senior government officials. These questions are required due to the 2001 Patriot Act.
May families operate one account?
All family members over the age of majority in their state may be additional donors, joint advisers, or authorized representatives on one ADGF account. A donor may also give their tax advisor or other professional advisors read-only online access to their account.
Having an ADGF account could be similar to a family foundation where family members may contribute and work together to make grants. This multi-member, multi-generational ADGF account is a great way to teach the next generation the joy of giving and how to be good stewards of the donations made.
The Donor is Ready, What Now?
The ADGF application and disclosures are available at willplan.us/giftfund. Gift Planners will typically develop the relationship with donors interested in the ADGF and help them submit the completed forms to BNY Mellon for approval. The ADGF application must be approved by BNY Mellon before the donor can send any funds to the ADGF.
Benefit
Once a donor has been approved and the funds transferred to the ADGF, an organization may steward the donor as they decide where to request grants from their ADGF. The Adventist-only sub-fund will be restricted to grants to the participating organization. As a gift planner works with their donor, they may also suggest that their organization be listed as the residuary beneficiary of the ADGF discretionary sub-fund when the donor dies.
View Donor Accounts
Donors may view their accounts and request grants to charitable organizations via a secure online portal that offers the same security as any bank account. In addition, donor accounts may be viewed (read-only) online by the associated participating organization.
Grants
Donors may recommend to the Gift Fund that a grant of at least $250, but not more than the amount that is in their account, be made to a charitable organization in the United States. Grant recommendations are always honored as long as they are directed toward a charitable organization that is recognized as tax-exempt under Section 501(c)(3) and classified as a public charity under Sections 509(a)(1) or (2), or it is directed toward some public charities classified under Section 509(a)(3) of the Internal Revenue Code. Grants must be made to a qualified organization, not individuals, and BNY Mellon will confirm the organization is a qualified charity before releasing the grant.
Grants may be made to any Adventist Yearbook organization anywhere in the world when they are directed first to the General Conference of Seventh-day Adventists with instructions that the gift is restricted for the use of the named Adventist organization in the foreign country.
Grants may be made to ASI organizations from the discretionary account. If a donor wishes to make a grant to ASI organizations outside of the United States, they may contact the GC PGTS Department at 301-680-5002, [email protected] for additional help.
Branding and Marketing
A participating organization may use its logo to promote the ADGF to its donors. As a donor expresses interest in the ADGF, the participating organization’s gift planner should explain how the BNY Mellon Charitable Gift Fund operates the fund and how it provides excellent donor support. The organizations will maintain donor relations, which will determine how involved they want their gift planners to be in helping donors.
The NAD PGTS Department will promote the ADGF throughout the NAD. Participating organizations are encouraged to complement the NAD marketing by promoting the Donor Gift Fund in their communications and areas of influence.
Adding a page for the ADGF to a participating organization’s website is an excellent start to let donors know about this exciting new tool.
If you have any questions or would like to become an ADGF participating organization, please contact the GC/NAD PGTS Department at 301-680-5002 or [email protected] for more information.