Donor Advised Fund Policies
The Chicago Community Trust is committed to building a stronger Chicago region.
When necessary, we enact or update policies to ensure that our grant making is aligned with our mission and charitable purpose. Please review the following polices for our donor advised funds:
Hate-Free Grant Making
The Chicago Community Trust reserves the right to decline donor advised fund (DAF)-recommended grants to organizations that the Trust knows or has reason to believe support or engage in “hateful activities,” defined to mean activities that incite or engage in violence, intimidation, harassment, or otherwise attack and malign individuals or groups of individuals on the basis of perceived race, color, religion, national origin, ethnicity, immigration status, gender, gender identity, sexual orientation, disability, and other protected class. We believe these activities are contrary to our broader social mission.
The Trust has implemented a Hate-Free Grant Making Policy for its donor advised funds through due diligence procedures to ensure that organizations that engage in hateful activities and have been identified as a hate organization are identified, and steps are taken to avoid authorizing grants to said organizations. The Trust relies on data compiled by the Southern Poverty Law Center to determine if a nonprofit has been categorized as a hate organization. Likewise, the Trust also relies primarily on the IRS to regulate the charitable status of organizations, but if through its due diligence process the Trust determines that a public charity does not align with it social mission as stated above, the Trust will exercise its power to decline the grant recommendation.
While the Trust is committed to partnering with donors and fund advisors to achieve their philanthropic goals, decisions regarding grant distributions made from a donor advised fund are made at the sole discretion of the Trust. When the Trust receives a donor advised fund grant recommendation that is contrary to its mission and core values, Trust staff will advise the fund advisor as to why the recommended grant is being declined and offer to explore alternate methods for the fund advisor to exercise their philanthropy, including recommending other organizations to support.
Dormant Fund Policy
A Donor advised fund (DAF) provides an effective vehicle for donors to make tax-deductible charitable contributions and subsequently recommend grants to qualifying charitable organizations from the funds over time. While the IRS does not stipulate grant-making requirements for DAFs, e.g., minimum annual distribution percentage or deadline for spending down the fund balance, the Trust strives to maintain active and engaged relationships with donors/advisors and encourages grant making on a regular basis. To fulfill its mandate of distributing charitable dollars to the community, the Trust regularly reviews DAF grant making activity. A DAF is considered dormant if the advisor(s) fail to recommend grants for a period of two calendar years. A Dormant Fund Report, issued monthly for each philanthropic advisor, will list dormant DAFs and their most recent grant activities. If a DAF appears on the Report, the following will occur:
- Philanthropic advisors contact respective DAF advisor(s) to alert them to their DAF status and discuss intentions for the DAF.
- Philanthropic advisors confirm fund succession plan and contact information for any successor advisors.
- If the DAF advisor(s) fail to recommend grants for another year, making the DAF inactive for a total of three years, the DAF advisor will be advised of the following options:
- Provide a plan for funding specific charitable projects that articulates reasons for the retention of untouched resources for more than the three-year period; or
- Recommend grants of an amount equivalent to the Trust’s Spending Policy as applied to the DAF to one or more 501(c)(3) public charities of their choice; or
- Recommend a transfer of an amount equivalent to the Trust’s Spending Policy as applied to the DAF to the general endowment fund of the Trust.
- Notify DAF advisors that if we do not hear from them by a specific date (as set by philanthropic advisor), the Trust will assume the donor has ceased to act as advisors to the fund and will contact successor advisors (as applicable) to activate grant making.
- In the event the DAF advisor(s) (including successor advisors, as applicable) cannot be located or is/are unresponsive after the fourth year, an amount equivalent to the Trust’s Spending Policy as applied to the DAF may be transferred to the general endowment of the Trust.
- In the event the DAF advisor(s) (including successor advisors, as applicable) cannot be located or is/are unresponsive after the fifth year, then the assets of the DAF may be transferred to the general endowment fund of the Trust (or other public charity as designated in the Fund agreement), after which the DAF may be closed. All attempts to contact the DAF advisor(s) must be documented in the fund profile in the Trust database.
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