Donor Advised Fund

Guidelines for Accepting Donor Advised Fund Contributions
March, 2018

Thank you for your generous and continued support of the Tucson Museum of Art.

Gifts from a donor advised fund have become popular vehicles for charitable giving due to the tax benefits they can provide and to centralize donors’ philanthropic giving. The following is intended to answer some of the most frequently asked questions about donor advised funds and inform you about important rules and restrictions at the Tucson Museum of Art.

A donor advised fund (DAF) is a named charitable giving account you can set up under a public charity, most often a sponsoring financial or community institution. To set up a DAF, you make an irrevocable gift of cash or other assets to the financial or community institution, receive a tax deduction, and as a “donor-advisor” may make non-binding grant recommendations to benefit the charities you care about.

A DAF can also be part of a planned gift. When establishing a DAF, a qualified charity such as the Tucson Museum of Art, may be recommended to receive any remaining balance in the DAF upon the death of the donor.

Restrictions – The U.S. Pension Protection Act of 2006 establishes certain restrictions applying to donor advised funds. It’s important to be aware of these to make sure that a donation through a DAF meets your needs and charitable intent. The restrictions that most often impact donors concern pledges (new and existing), providing multi-year support, and accepting donor benefits.
Donating through a DAF limits the donor benefits you may receive. Because a full tax deduction is received at the time of establishing the DAF, donors may only receive “incidental” benefits, or benefits which do not carry a fair market value.

There are penalties for receiving more-than-incidental benefits for a DAF gift. The U.S. Pension Protection Act of 2006 imposes an excise tax on any donor, donor advisor or family member who recommends a grant that results in “more than incidental benefit.” The sponsoring agency can be penalized as well.

Please note that this document is intended as a summary of TMA’s current guidelines for accepting gifts from donor advised funds. This document is not intended as legal advice. Donors should consult their DAF manager, tax advisors, and/ or legal counsel to determine the tax treatment of their proposed contributions and any other restrictions that apply to DAF grants.

Guidelines for Events, Membership and Pledges – Your Donor Advised Fund

EVENTS, TICKETS, AND DONATIONS

Donors wishing to support the Tucson Museum of Art through special events should be aware of the following: Event tickets and tables, as they have substantial fair market value, may not be purchased through a DAF. An exception to this is when the donor will not attend the event and the entire table or seat is to be donated back to the Tucson Museum of Art.

Event donations through your DAF are welcomed. Your event donations, including raise-the-paddle donations can be made through a DAF if the DAF has approved the donation/contribution. Notify the Tucson Museum of Art and contact your fund’s sponsoring organization to clarify any required language to recommend the grant.

Under federal law governing donor advised funds, it is not permissible for donors to split or “bifurcate” payments for table, or tickets when a portion of the purchase is tax-deductible because you receive benefits or services. This means that donors may not recommend a grant through a DAF for the deductible portion of a table or ticket purchase and then pay the non-deductible portion from a personal source.

If a portion of event admission is not tax deductible, your DAF can support the event in the following ways:

  • If you would like to attend an event and make an additional contribution, you may pay the full price of admission (non-deductible and deductible portions) from a personal source outside of your DAF. Then, you may recommend a grant for the additional contribution from your DAF. The Tucson Museum of Art is pleased to recognize both your personal and DAF contributions in all event-related materials.
  • If you purchase a table or tickets and donate them back to the Tucson Museum of Art (and not attend the event), you may recommend a grant for the original contribution from your DAF, noting that the requested table or tickets shall be donated back to the organization.

MEMBERSHIPS

Grants from DAFs to cover annual membership fees are acceptable if:

  1. The membership benefits are limited to incidental annual benefits, such as free or discounted admission to low-cost events, parking, preferred access, and attendance at certain members-only events.
  2. The donor waives all of the non-deductible (tangible) benefits if the membership level offers them.
    An important note on tangible benefits: Under federal law, if any portion of the membership is not tax-deductible, you must either waive the tangible benefits or use a personal source to pay the entire membership value. As noted above, bifurcation is not permissible.

PLEDGES

When a DAF is established, the donor may recommend but not legally direct future charitable grants. As the donor has given up legal ownership of the fund, they may not make a legally enforceable pledge from their DAF to the charity they want to support. However, a distribution from a DAF in fulfillment of a donor’s personal pledge to TMA is not considered to result in more than an incidental benefit to the donor if: (1) the fund makes no reference to the existence of any pledge when making the DAF distribution; (2) no donor receives, directly or indirectly, any other benefit that is more than incidental; and (3) the donor does not claim a charitable contribution deduction for the DAF distribution.

As a general matter, the Tucson Museum of Art recommends that donors notify us of their intent to recommend a grant, as it assists us with future planning. Suggested wording is: “I intend to recommend a grant of [amount] from a donor advised fund (DAF), and this notification is not a legally binding commitment.”

For questions related to grants recommended through your donor-advised fund, please consult with your fund advisor or legal counsel for definitive tax treatment.

Questions? Please contact Alba Rojas-Sukkar, Chief Development Officer, with any questions about supporting the Tucson Museum of Art through a donor advised fund at arojas-sukkar@tucsonmuseumofart.org or 520-616-2694.

Donor Privacy Policy

Our Commitment to Privacy

The Tucson Museum of Art and Historic Block (TMA) is committed to protecting the privacy of our donors. TMA does not sell, trade, or rent personal information about our donors with third-party organizations.

Data Collection

TMA may collect personal information about donors for a number of reasons, including:

  • To administer and maintain accounts related to donations
  • To facilitate fundraising
  • To communicate with donors and potential donors concerning the museum and museum services
  • To comply with legal and regulatory requirements

Such information may include: name, address, phone number, email address, and credit card information when a donor voluntarily provides it to us. In addition, TMA maintains a record of each donor’s giving history and communications with staff. This information is kept on file and may be used for the following internal purposes:

  • To distribute receipts for donations
  • To thank donors for their donation
  • To inform donors about events and programs
  • To inform donors about fundraising activities
  • For internal analysis and recordkeeping
  • For reporting to relevant Federal and State government agencies, such as the IRS
  • For annual audits
  • For grant reporting
  • To contact donors about changes to this policy

Recognition and Reporting

TMA may publicly recognize the receipt and purpose of an individual gift, unless the donor explicitly requests that the gift be anonymous. The specific amount of a donation will not be disclosed without the consent of the donor, except as required by law. Data on donors and donation amounts (excluding personally identifying information) may be aggregated and used for reporting purposes, including grants and government filings, without the consent of the donor. TMA also discloses a list of donors in giving categories in its Annual Report.

Safeguards

TMA safeguards donor information by:

  • Physical measures, including locked files and locked offices
  • Technological measures, including the use of passwords and digital security
  • Other measures, including restricting access on a “needs to know” basis
  • Use of a secure site for online financial transactions
  • Destruction of credit card information after a transaction has been processed and completed

Changes to Our Donor Privacy Policy

TMA may revise its donor privacy policy at any time, without notice, and such changes will be effective immediately upon posting the revised policy to the TMA website. Changes can be necessary due to changes in law, policy, or TMA procedures. Check here periodically for any updates.

Contact Us

You may write to the Tucson Museum of Art and Historic Block, 140 N. Main Avenue, Tucson, AZ, 85701, to request a review of any personal information that may have been collected by TMA and to request any corrections that may be necessary.

If you have questions about this Donor Privacy Policy or you wish to be removed from our email and postal contact lists, you may write to the Tucson Museum of Art and Historic Block, 140 N. Main Avenue, Tucson, AZ, 85701.