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Partner Advised Funds
Partner-Advised Funds (also known as Donor-Advised Funds) are considered an alternative to private foundations (see chart below). InterAct for Change offers Partner-Advised Funds as a convenient, tax-advantaged giving strategy for individuals, families, and corporations.
Anyone can establish an InterAct for Change Partner-Advised Fund as an easy way to accomplish annual and long term-term giving goals. The initial contribution is $25,000 or more in cash or marketable securities. Additional contributions may be made at any time, in any amount. Contributions are permantent. InterAct for Change has established guidelines for the operation of a Partner-Advised fund and the federal tax laws require that InterAct for Change has exclusive legal control of the donated funds. Significant income and estate tax advantages may apply, depending on the partner’s financial situation. Always consult your professional advisor before creating a Partner-Advised Fund.
Once a fund is set up using a legal document provided by InterAct for Change, and assets have transferred into the fund, partners may recommend grants in suggested increments of $250 or more at any time to most public charities (not private foundations), using a simple form provided by InterAct. Partners may name their fund as they wish. In addition, partners may appoint multiple persons and/or successors to recommend grants, according to guidelines established by InterAct for Change.
If you desire, InterAct remains in the background, while your Partner-Advised Fund makes the grants. This engages you and your family or corporation directly in implementing your charitable giving goals. Alternatively, if anonymity is important, InterAct for Change accommodates this choice. We understand that some partners want privacy; others want a visible personal or family legacy.
Fees are charged to Partner-Advised Funds, according to the level of strategic advisory and administrative services requested by the partner. The minimum annual fee is $500. A separate investment fee is charged, and varies depending on the investment strategy recommended by the partner, as well as the market value of the assets in the fund.
Investment Alternatives
Each family, corporation, or individual who sets up a Partner-Advised Fund may recommend how the fund is invested within the guidelines established by InterAct for Change. Assets are not pooled with other funds, but instead, are held in individual accounts. Activity is reported quarterly. InterAct for Change monitors investment performance against appropriate benchmarks.
Current investment options include: money market funds and a broad range of high quality mutual funds from a variety of money managers.
If a Partner-Advised Fund exceeds $500,000, the family, corporation, or individual has the option of recommending a preferred investment partner, (i.e., a wealth manager, consultant, or investment advisor) to using the investment guidelines established by InterAct for Change. We meet with you to discuss the investment options available to your fund.
For further information on investment alternatives and to begin making a charitable imprint in the world, take the first step toward establishing your InterAct for Change Partner-Advised Fund today. Contact
How Partner-Advised Funds and Private Foundations Differ
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Partner-Advised Fund
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Private Foundation
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Tax Deductibility Abbreviations: AGI: Adjusted Gross Income FMV: Fair Market Value |
Cash donations: 50% of adjusted gross income (AGI)
Long-term publicly traded securities: 30% of AGI, generally deductible at fair market value (FMV) |
Cash donations: 30% of AGI Long-term publicly traded securities: 20% of AGI, generally deductible at FMV Other long-term appreciated assets: 20% of AGI, generally deductible at FMV |
| Setup | Simple legal documents provided by InterAct for Change | Must incorporate or be created as a trust, form a board of directors, and apply for tax exempt status |
| Investment Decisions | Partners recommend investment allocation among qualified funds and managers | Able to exercise control over investment management, while adhering to specific IRS rules |
| Grantmaking Authority | Partners recommend grants to charitable organizations; InterAct Board approves eligible grants | Complete responsibility for and control over grant making decisions |
| Involving Others | Partners can name additional partners and/or family members to participate in Partner-Advised Fund recommendations. Partners can name individuals as successors after partner's death |
Founder can appoint relatives or colleagues to the board of directors, hire an outsider or give relatives or colleagues responsibility over the day-to-day activities of running the foundation, and, subject to certain limitations, provide compensation |
| Privacy and Tax Filings | Partners determine their own level of privacy; they can be acknowledged for grant recommendations or grants can be made anonymously. The Partner-Advised Fund does not file an annual tax return but is included as a part of InterAct for Change annual tax return (Form 990). InterAct provides a tax letter to Partners documenting contributions. |
Complete privacy is not allowed; foundations must file IRS Form 990 annually, which is available to the public at www.guidestar.org |