Donor-Advised Funds

What Is a White-Label  Donor-Advised Fund?

A white-label or private-label donor-advised fund is a service that allows an organization to offer a charitable giving option under its own branding, without the expense of setting up or administering the program.

With a donor-advised fund, donors can make gifts directly to the sponsoring charity that maintains their donor-advised fund account and receive financial benefits for their donations. In exchange for their irrevocable gift to the sponsoring charity, donors receive advisory privileges to recommend grants to qualified charitable organizations and advise on how the gift is invested.

Each gift allows the donor to receive an immediate income tax deduction, avoid capital gains tax on appreciated assets, and have the ability to make grant recommendations to charities at any time for the life of the donor. Future generations can also be appointed to make the recommendations for the rest of their lives

Benefits of White-Label
Donor-Advised Funds

Donor-advised funds are the fastest-growing and most popular charitable giving option today. Providing a service for your clients to open their own donor-advised fund account not only encourages giving, it builds the reputation of your organization.

Donor-advised funds require a lot of back office administration and institutional knowledge to review charities to ensure they meet IRS standards, process accounting, file paperwork, and distribute grants to designated charities. With a white-label donor-advised fund, the sponsoring organization can focus on the promotion and marketing of its service while their service partner handles the difficult administrative tasks.

In addition to supporting great charitable causes, using a donor-advised fund can help donors avoid capital gains taxes and create an immediate income tax deduction, all of which can assist donors in achieving various tax reduction goals.

There are limits on the amount of income taxes that can be reduced in a given year. If the deduction amount exceeds the amount that can be used by the donor, the remaining deduction amount can be carried forward up to five additional years.

Cash donations are generally eligible for an income tax deduction of up to 60% of the donor’s adjusted gross income.

Donations of long-term appreciated securities directly to the charity are eligible for an income tax deduction of the full fair-market value of the assets, up to 30% of the donor’s adjusted gross income. This also eliminates the capital gains tax on the assets, provided they’re held for more than a year.

Donor-advised funds are popular charitable options due to their flexibility in acceptable assets and investment opportunities. A donor can recommend that their financial advisor manage the assets of their donor-advised fund account in a wide range of investment options. Donors are allowed to contribute a wide range of assets, including, but not limited to:

  • – Cash or cash equivalents
  • – Publicly traded securities or mutual fund shares
  • – Real estate
  • – Business equity
  • – Restricted stock
  • – Cryptocurrencies

Donor-advised funds are a wonderful tool to establish a legacy of giving. Donors have the option to support multiple charities through a bequest in their will to the donor-advised fund sponsor. This can help reduce the burden of estate tax for heirs.

Heirs and loved ones can be part of the process of distributing grants to charity, and can even be named as successor grant advisors to allow the donor-advised fund to last beyond a single lifetime and continue for generations to come.

Donors may grow their donor-advised fund contributions over time, allowing them to build more funds to make more donations. The sponsoring charity will usually provide several investment strategies donors can choose from based on how they want to invest their funds.

Who Is a White-Label Donor-Advised Fund For?

A white-label (private-label) donor-advised fund is a great option for organizations that wish to offer charitable giving tools for current and future donors, but lack the infrastructure or expertise in how to administer it.

Contributing to donor-advised funds is a popular charitable giving option for individuals who are subject to paying capital gains taxes on appreciated assets, whose estate is subject to taxes, who want to benefit charity, and who want to involve their family in philanthropy.

How Does a White-Label Donor-Advised Fund Work?

Ren will manage all of the administrative, legal, and technical aspects of your organization’s white-label donor-advised fund. This includes performing due diligence on grant requests, managing gift acceptance, and making distributions to approved grantees.

As your partner, Ren can provide you with supporting marketing and educational materials to inform your clients about the benefits of a donor-advised fund.

Frequently Asked Questions

Traditionally with white-labeling the provider of the product/service specifies the contracted tools, processes, and features. With a private-label it is the buyer that specifies what is part of the service. In this case the terms can be used interchangeably.

We find that donor-advised funds are good fits for individuals, corporations, foundations and trusts. Other donors may be better suited for a different means of giving.

Either liquid or illiquid assets (such as real estate, buildings, antiques, and equipment) can be donated.

The donor is the individual, or organization, that contributes assets to the donor-advised fund. The donor is the one that may be eligible for the tax benefits, as a result of funding the donor-advised fund.

You will decide limitations on minimum/maximum grant and contribution amounts, investment options, look and feel of the client/donor portal, workflows and more. You will also have access to the platform to view all activities in the program.

No, neither a white-label or private-label donor-advised fund requires the creation of a new entity. Renaissance Charitable Foundation can serve as the sponsoring charity.

Private foundations are separate legal entities that are subject to more stringent tax laws and regulations in comparison to public charities. Private foundations do provide donors with greater administrative control over assets and grantmaking, such as being allowed to support organizations that are not IRS-qualified, 501(c)(3). Often, donor-advised funds can be established with far less capital than may be needed for a private foundation.