Donor Advised Funds

Overview of Donor Advised Funds

The Foundation offers a flexible and effective way for Scouters and our supporters to easily accomplish many of their charitable objectives. The BSA Donor Advised Fund ("Fund") permits donors to make an irrevocable gift to further the mission of the BSA and, potentially, other qualified charities. Advised funds in the BSA Foundation are essentially the same as advised funds offered by community foundations, commercial common funds (such as Fidelity and Vanguard), and others -- except our donors are assured that Scouting will always be a primary beneficiary of their philanthropy.

Annual distributions are made from the Fund, and the donor(s) may provide advice to the Foundation related to the amount, timing, and beneficiaries of the Fund. However, the owner of the Fund is the Foundation, and the Foundation board has ultimate control over all distributions from the Fund. The Fund agreement provides for distribution of income and capital appreciation, as well as principal.

Establishing a Donor Advised Fund

To set up a named Advised Fund, the donor must complete a fund agreement and irrevocably transfer the assets for the Fund to the Foundation. Distributions from the Fund will be used to further the mission of Scouting locally, nationally, and internationally. Most donors prefer the charitable beneficiaries to have unrestricted use of their distributions. However, a donor may establish a broad restriction on the use of the distributions in the fund agreement (e.g., limited to Scouting in certain counties or states, support of a specific camp or council program, etc.).

Use restrictions may be specified only in the Fund Agreement, not upon the subsequent advice of the donor. Use restrictions prohibit distributions from the Fund for any other purposes. While a donor may, to some extent, retain the right to change charitable beneficiaries, the donor may not retain control of distributions. Donors may restrict the payout of the principal for a specified number of years but may not require the Fund to be permanently maintained.

Minimum Gifts and Distributions

A minimum gift of $50,000 is required to establish a Donor Advised Fund. Most donors establish their Fund with cash, marketable securities, or distributions from mutual funds and similar accounts. However, the Foundation may, at its discretion, accept other types of property to establish a named Fund.

If at any time a named Fund's balance falls below $10,000, the donor will be so advised by the Foundation. The donor may then elect to (a) make additional gifts to bring the Fund balance above $10,000 or (b) provide advice as to the distribution of the Fund balance (see Final Distributions on the next page).

Annual distributions are usually the greater of $1,000, or 5% of the Fund value, revalued annually. While distributions tend to be limited to the fund's distributable net income, distribution of principal and/or capital appreciation may be made available or authorized as well. Unless otherwise instructed, distributions are made in the name of the Fund (e.g., the Robert and Mary Jones Family Advised Fund). However, at the request of the donor, distributions may also be anonymous. Distributions are generally made between November 1 and December 31 of each year.

Donor Advice and Advisory Period

Around September 30th of each year, the Foundation advises each Fund donor as to the approximate amount that will be available for distribution from the Fund that year. Advice from the donor about distributions and beneficiaries is usually provided about the same time and reviewed by the Foundation prior to any distributions. If no advice is received for a Fund, the Foundation usually makes a distribution similar to past distributions from the Fund. However, under certain circumstances, the Foundation may, at its discretion recommend a different distribution.

The Foundation wants to make every effort to help its donors meet their philanthropic needs and objectives. As such, the Foundation will typically make Fund distributions as specified by the donor unless circumstances or special situations, as solely determined by the Foundation, warrant a different distribution. The advisory period for a named Fund usually terminates either upon the death of the original donor(s), or at such time as the Fund balance drops below $10,000, unless the Fund donors, within a reasonable time and with notice, choose to add to the Fund to keep it above the $10,000 threshold.

Grant Recipients

Most advised fund distributions are designated to BSA local councils. Other Scouting entities, programs, or initiatives of national or international character may also be designated.

Charitable organizations not affiliated with Scouting may be selected as well. Any non-Scouting organization receiving a distribution from a named Fund must be (1) recognized as tax-exempt under IRC Section 501(c)(3); and (2) have a mission or charitable purpose similar to, or compatible with the values, principles, and tenets of the Boy Scouts of America. Distributions may not be used to pay dues or satisfy a legally enforceable obligation of the donor. Also, at this time, they may not be distributed directly to a Scout pack, troop, crew, or other Scout unit.

Administration of Fund

The Foundation provides all fund administration, including (but not limited to) gift acknowledgement, providing a gift receipt and fund statements to the donors, sending checks to charitable beneficiaries, and confirming requested distributions for each Fund. As with other funds, trusts, and assets of the Foundation, we estimate that the annual administrative cost for a named Fund will be approximately .35 of the principal (35 basis points), as revalued annually.

Fund investments are at the discretion of the Foundation. Management and oversight of Foundation investments are provided by an outstanding mix of financial professionals and Scout volunteers. Recommendations are made by the BSA Finance and Investment Committee and overseen by the BSA Treasury Division, as well as the Foundation Advisory Committee. State Street Global Advisors provides the fund management and distribution of funds.

Information on investment performance and portfolio mix is available from the Foundation upon request. The Fund may, at the discretion of the Foundation, be commingled with the Foundation's other assets. All Funds will be listed in the annual report of the Foundation, but may be listed anonymously upon request of the donor.

Final Distributions

A donor may specify a final distribution of the Fund balance upon termination of the advisory period. However, the ultimate decision regarding final distributions from a Fund will be made by the Foundation. As with all distributions, the Foundation will consider the donor's advice and make every effort to honor that request. If no final designation is made, or if no advice is given as to the termination of the Fund, the Foundation may distribute the balance of the Fund at its sole discretion. When the final distribution from a named Fund has been made, the Fund will be closed.

Sample Documents and Additional Information

An advised Fund normally requires three documents: 1) the Fund Agreement; 2) Schedule A, specifically identifying the gift assets contributed for the advised Fund; and 3) Schedule B, which discusses the details of the Fund distributions and advisory power of the donor. Samples of these documents and additional informationĀ can be obtained from the Foundation by emailing robin.kresge@scouting.org.

The Foundation offers a flexible and effective way for Scouters and our supporters to easily accomplish many of their charitable objectives. The BSA Donor Advised Fund ("Fund") permits donors to make an irrevocable gift to further the mission of the BSA and, potentially, other qualified charities. Advised Funds in the BSA Foundation are essentially the same as advised funds offered by community foundations, commercial common funds (such as Fidelity and Vanguard), and others - except our donors are assured that Scouting will always be a primary beneficiary of their philanthropy.

Annual distributions are made from the Fund, and the donor(s) may provide advice to the Foundation related to the amount, timing, and beneficiaries of the Fund. However, the owner of the Fund is the Foundation, and the Foundation board has ultimate control over all distributions from the Fund. The Fund agreement provides for distribution of income and capital appreciation, as well as principal.