Young Philanthropist Funds
An FJC Young Philanthropist Fund is a donor advised fund that can be established for someone college age or younger. It serves as a charitable vehicle that allows the recipient to recommend distributions to the qualified charities of their choice at any time they choose. Accounts may be created in connection with a milestone event, such as a graduation, birthday, religious ceremony, or simply to facilitate the next generation’s active involvement in philanthropy. The establishing gift, and all future contributions made to the account will be invested based on the account’s Investment Allocation. The account balance will continue to grow, tax free, so young philanthropists have even more money available to distribute to the charities of their choice. FJC will issue a tax receipt to all donors for their contributions made to the account as required by the Internal Revenue Service.
Establishing a Young Philanthropist Fund
How Does the Young Philanthropist Fund Work?
If the account recipient is under 18 years of age, a parent or guardian must indicate, at the time the account is setup, what level of access the recipient will have to the account. This includes: their access to viewing account information online; if a parent or guardian must approve distribution requests; and whether they should be included on account mailings.
There is no minimum, or maximum, number of distributions allotted for a calendar year. There is a $100 minimum per distribution. FJC will send the account holder a copy of the grant distribution letter for each distribution made from the account. Click here to see a sample of the standard transmittal letter sent to an organization. Letters can also be adjusted to reflect donor anonymity.
Distributions from a Young Philanthropist Fund can only be made to qualified tax-exempt organizations, or other qualified charities as approved by FJC. Please see the Summary of Procedures and Rules for Donor Advised Funds for a summary of the restrictions and limitations on donor advised fund distributions.
FJC has one of the most competitive and simple fee structures. The fund will be charged an administrative fee of just 1% annually, based
on the average daily balance in the account. Fees are posted to the account on a quarterly basis and will be clearly outlined on the Quarterly Statement of Activity. There are no transactional fees, balance requirement fees, or hidden charges – simply the annual fee based on the account balance.
Advantages of a Young Philanthropist Fund
Involve the Next Generation in Philanthropy
This is the perfect way for the next to be generation involved in philanthropy. It provides a vehicle to teach them about the importance of giving back to their community, helps them learn about cash management, and starts a habit of giving that they can continue into adulthood.
Low Initial Contribution
FJC requires only a $1,800 initial contribution for Young Philanthropist Funds. Some other donor advised funds do not make exceptions on their establishing gift requirements based on the account type.
Avoid Capital Gains Taxes
Your contributions of appreciated securities (including mutual funds) or other property, held for at least one year, are deductible at their full fair market value. You pay no capital gains tax on the appreciation, and the full amount of the appreciated value is available for charity.
As an independent foundation, FJC offers a larger and more diverse selection of Investment Options for its Donor Advised Funds than most other organizations. In addition to investment choices managed by leading financial institutions, FJC offers a unique investment option - the FJC Agency Loan Fund. The Agency Loan Fund provides loans at market interest rates to credit qualified charitable organizations with limited access to other credit sources.
Low Establishing Contribution
FJC requires only a $5,000 establishing contribution for both individual and corporate donor advised funds. Some other donor advised funds require $25,000 for individual funds and $100,000 for corporate funds.
FJC offers a special opportunity not available from most community foundations or donor advised funds. FJC can honor grant recommendations to pre-approved overseas charities and domestic organizations that have not yet received their tax-exempt ruling. FJC will work with the recipient organization to complete our application, agreement and reporting requirements.
No Minimum Subsequent Contributions
Make additional contributions whenever you want, at whatever value you want. FJC does not require you to make annual contributions, nor do we require you to maintain a minimum balance in your account. Third parties can make contributions to your account at any time and in any amount. This activity is limited on donor advised funds; high volumes of third party contributions on a regular basis will require the fund to restructure and become a Collective Giving Fund.
Quick and Easy Grant Procedures
FJC has a low minimum grant recommendation amount ($100) and typically processes grant recommendations within 10 business days. Please note, certain recommendations may require additional research, which will extend the processing time.
Authorized Recommenders on the Fund may submit grant recommendations via e-mail, online using the FJC Donor Portal, or in writing using your customized Grant Recommendation Form, which you send in by postal mail or fax. Please note: we cannot accept recommendations over the phone.
FJC will mail you a copy of the transmittal letter to the organization at the same time we mail the grant. In addition, you can check the status of the grant via the FJC Donor Portal.
FJC Gift Certificate Program
You may request FJC Gift Certificates, for $100 or more. Recipients of the certificate can then recommend a distribution to the qualified charity of their choice.
Involve Future Generations
You may designate Successor Recommenders to assume the role of a Recommender at the time of your death, or designate a final distribution of funds to the charities of your choice once no eligible Recommenders exist on the account.
Tips About Grantmaking
You may recommend grants to any qualified tax-exempt organization, or qualified religious institution, in good standing with the IRS. Distributions can also be made to international charities that meet due diligence requirements and are approved by FJC for distributions on an agreement and reporting basis.
You may recommend any number of grants from your Fund during the year. The only requirement is that each grant recommendation is for a minimum of $100 and you have enough funds in your account to honor the recommendation at the time it is submitted.
FJC will contact you if your recommendation does not meet the minimum amount, if there are insufficient funds in your account, or if FJC has any other questions or concerns regarding your recommendation.
Please note that we ask you to allow 10 business days to process eligible requests, but we generally process requests within about a week.
FJC cannot honor the following recommendations from your Fund:
Pledges - FJC cannot honor pledges that you have made to an organization. This is a personal obligation that you have entered into and cannot be honored through your FJC Donor Advised Fund. FJC can honor solicitation requests.
Tuition - No form of tuition, or the enrollment fees for extracurricular activities, can be paid from your Fund. If a distribution to a school is submitted without a specific designation, FJC will confirm with the school, in writing, that the funds received will not be applied to the tuition of any particular individual.
Gift Intended for the Benefit of One Named Individual - FJC cannot honor recommendations for gifts that will benefit one named individual. For example, “Please apply this gift towards the tuition of John Smith.”
Gifts, however, can be designated for funds being raised by a particular individual for an event. For example, “This gift is designated for Jane Smith’s participation in the Race for a Cure.”
Bifurcated grants - like all other donor advised funds, FJC will not distribute funds for the tax-deductible portion of a dinner ticket to, for example, a fundraising gala.
If you are not sure if a gift qualifies for distribution from your FJC Young Philanthropist Fund, please contact our office for clarification.