How much control and freedom would my client have in recommending grant recipients?

With a donor-advised fund, your client can recommend a grant to any qualified organization that falls within the broad philanthropic mission of the Foundation. The United States has over 650,000 qualified charities. The Foundation will ensure that groups recommended for a grant meet the necessary requirements.

In complying with federal tax laws, and for the protection of your client, the Foundation must reject grant recommendations that would benefit an individual, fulfill a personal obligation, support a political campaign, or that is for a private foundation. However, scholarship funds do support selected students for their educational needs.

Why shouldn’t my clients give directly to the organizations they wish to support?

Through the Sonora Area Foundation, your clients’ giving is made simple. The Foundation is also equipped to accept a wide variety of assets, from cash and securities to real property and closely held stock. Another benefit of using the Foundation for your clients’ charitable giving activities is timeliness. With a donor-advised fund, for example, a donor receives an immediate tax credit for his or her contribution, but retains the ability to recommend grants to nonprofit organizations at a later time. The Foundation handles all of the administration, record keeping, and financial statements.

What are the tax benefits for my clients if they give through the Sonora Area Foundation?

As a community foundation, we offer the maximum charitable tax advantage available by law. Because the Foundation is a community foundation, it is not subject to the taxes and regulations affecting private foundations, and it has greater flexibility on matters such as minimum payout.

How does a donor-advised fund work?

Your client can establish a donor-advised fund with a minimum opening gift. At that time, your client will receive a tax deduction. Your client may then recommend grants to support qualified organizations and their programs.

Can my client name a successor advisor to a donor-advised fund?

Yes, your client can name a successor or successors to a donor-advised fund. If they do not name a successor, or after the successor’s death, the Foundation’s Board of Directors will continue to use the fund in accordance with your client’s wishes.

How do Sonora Area Foundation’s costs compare with those of commercial gift funds and private foundations?

Without any fees, the Foundation is extremely competitive with commercial gift funds. But even more important, the Foundation offers your clients unique value that comes from our knowledge of the community and expertise in the philanthropic field.

Opening a donor-advised fund at Sonora Area Foundation is considerably less expensive than starting a private foundation, since we handle all administrative details, perform due diligence on all grants, and handle the details associated with processing and tracking the grants. Plus, there is no requirement for completion of an annual tax return.

What is the minimum gift required to start a fund?

$5,000 is the minimum amount required to start a fund at the Foundation. $1,000 is the minimum to maintain a fund at the Foundation, so additional contributions or investment growth are helpful to make grants.

What types of assets can my client use to start a fund?

The Sonora Area Foundation has the ability to accept a broad range of gifts, including:

  • Cash
  • Stocks and bonds
  • Real estate
  • Personal property, such as jewelry, artwork, and valuable collections
  • Life insurance policies

Can I receive continuing education credits through the Foundation?

Yes, the Foundation regularly offers workshops for which professional advisors can receive continuing education (CE) credit.