Types Of Donor-Advised Fund Fees

For some time now, donor-advised funds (DAFs) have revolutionized how people across Canada give to charity. Donors can give to charity, get an instant tax deduction, and recommend where grants should go over time. There is no restriction to the number of times donors can contribute to the fund and the charitable organizations it passes the money onto.

The amount of donor-advised fees may vary from one fund operator to another. Therefore, you may pay different fees depending on the donor-advised fund program you choose to work with. The following are the types of fees you may pay:

Administrative Fee

A giving account in a donor-advised fund may attract a small fee as a percentage or a fixed amount. Usually, the percentage rate will apply if it results in an amount that's more than the fixed rate. That means that the fees depend on the amount a donor has in their account.

The administrative fees go towards the review and issue of donor-recommended grants to charity organizations. Donor-advised fund programs also use this money for in-depth due diligence before issuing grants. Other elements covered by the fees include online accounts and support to donors. Donor-advised funds provide an easy way to determine the fees you will pay for a given amount.

Investment Fee

Donor-advised funds also charge investment fees, which also come in terms of a small percentage of the total donated. The programs have different investment pools, allowing the donor to choose any. Each investment pool has a mutual fund with different management and operating expenses.

The types of asset allocation pools include growth, aggressive growth, moderate growth, balanced growth, income, moderate income, and conservative income. They may also offer index pools, including domestic stock, foreign stock, and bonds. Besides, there is a charitable legacy pool with its charge in terms of investment fees.

Total Fees

Total fees consist of all expenses a donor pays on the donated amount. It consists of both the administrative and investment fees that apply to a given donor-advised fund. Compared to the amount of money in an account, the total fee is mostly negligible and affordable. Be sure to ask your program manager about donor-advised fund fees.

Conclusion

Do you want to invest in donor-advised funds? The program managers usually charge small fees to cover administrative and investment costs. It covers everything the program manager needs to run the fund and invest the funds on your behalf.


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