What is a donor-advised fund?
A donor-advised fund offers you an easy-to-establish, low cost, flexible vehicle for charitable giving as an alternative to direct giving or creating a private foundation which can involve substantial startup costs and administrative expenses. Contributions to donor-advised funds are administered and fully controlled by the entity that receives them. Although the entity is not legally bound to the donor, grants are made to public charities upon the donor’s recommendation. You can establish a donor advised fund with a contribution of stocks, bonds, cash or mutual fund shares. You may name yourself or others as advisors to the fund, and your children as successor advisors.
What is an advised grant?
An advised grant is a one-time gift or one of the gifts drawn from a donor-advised fund owned and controlled by United Way Worldwide. The purpose of an advised grant is to provide financial assistance to an organization that is pursuing a project or goal that is deemed worthwhile by the grant giver.
How does International Donor Advised Giving Program work?
United Way Worldwide, with the assistance of its international network of affiliates and partners, investigates whether the recommendation is consistent with its own charitable purposes and priorities and whether, under the circumstances, United Way Worldwide can exercise sufficient control over the grant to make sure that the grantee will use the funds properly. United Way Worldwide decides independently whether or not to make a grant by evaluating the recommended grantee and by exercising appropriate discretion, control and oversight of funds as required by U.S. law. United Way Worldwide must work directly with the potential grantee organization and require the potential grantee to apply directly to United Way Worldwide for this grant. The application process for funding includes:
- The vetting and approval of the required legal documentation:
- Official country registration as a non-profit association or foundation with charitable, educational, religious, scientific, or similar purposes
- Articles of incorporation or other basic governing document
- List of board members and professional affiliations
- Financial statements – independently audited, where possible
- Annual report or other program descriptions
- Certification of ethics and transparency (provided by United Way Worldwide) and non-terrorist affiliation statement
- Previous grant report, if applicable
- Foreign Charity Equivalency Determination Documents (provided by United Way Worldwide)
- A representation that, to the best of the donor’s knowledge, no person with a direct interest in, or influence over, any other direct transaction with the donor will benefit directly from the gift.
- United Way Worldwide requires the foreign grantee to certify that it does not knowingly deal or employ people or entities that support terrorism.
- A signed written grant agreement from the grantee promising to comply with the requirements as specified by United Way Worldwide and to report appropriately to United Way Worldwide on the use of the funds at the end of the grant or any other required report period agreed upon in advance. The agreement will also certify that the funds will not be used for partisan political or religious purposes, improper private benefit, or for any purpose or activity inconsistent with section 501(c)(3).
United Way Worldwide will screen final grantee reports to ensure they are appropriate and complete. The ultimate reporting responsibility rests with the grantee, who must agree to such reporting before funds are released. All of the above procedures reflect United Way Worldwide’s commitment to be familiar with the grantee organizations and to serve the international sector with care and attention to the requirements of the law.
- The vetting and approval of the required legal documentation:
Why contribute to United Way Worldwide Donor Advised Giving Fund rather than directly to a charity?
United Way Worldwide’s International Donor Advised Giving program provides a number of benefits that direct donations to a charity may not, including:
- Flexibility to make grant recommendations anytime
- Simplified administration, no start-up costs, low fees and expenses
- Service with expert multi-lingual, multicultural staff to manage your international giving
- Convenient way to set aside funds dedicated for future grant-making globally
- Cost-effective alternative to internally managing due diligence and grant management
What types of assets can be contributed?
United Way Worldwide currently accepts cash, check, credit card, bank wire transfers, mutual funds and stocks.
Are there costs associated with the fund?
IDAG applies a modest fee (a minimum of $500.00 and no more than 7% of the grant) for the due diligence process and for thorough vetting of each recommended organization. IDAG accepts individual grant recommendations totaling US$5,000 and above. There is a US$25,000 minimum for the establishment of a donor advised fund with IDAG.
Through a donor advised relationship with IDAG, there are NO additional charges for:
- Full Expenditure Responsibility or Equivalency Determination*
- Translation of documents and communications
- Capacity building and support to potential grantees
- Anti-terrorism vetting
- Site visits to monitor grantees
- Advice and counsel from United Way organizations in 40 countries
- Collection and review of grantee reports
In addition, IDAG offers a reduced fee when donors provide grant recommendations to United Way organizations operating in North America, Latin America, the Caribbean, Asia, Europe and Africa.
*Please contact us directly for our pricing structure for our Equivalency Determination Service, through which IDAG conducts one-off Equivalency Determinations for organizations of your choosing.
How will a donor’s name be sent to the charity or nonprofit?
For each grant made, the donor has the choice to be named on the grant that is sent to the nonprofit or to remain anonymous. Grants can also be made in honor of another person.
What foreign charities and nonprofits can grants be made to?
Grants can be made to foreign organizations that operate for charitable purposes as defined by U.S. Law. Non-profits, schools, universities, hospitals and orphanages are all eligible.
May I recommend a grant to an individual?
No. Advised funds may make distributions only to qualifying nonprofit and public organizations.
Are there limitations on grants?
Yes. United Way Worldwide cannot approve grants that satisfy a pre-existing pledge or are used for any private benefit, such as dues, membership fees, tuition payments, goods purchased at a charitable auction, or to political candidates or parties. United Way Worldwide does not provide grants for religious purposes or to for-profit entities.
Is there a limit to how many grants I can recommend in a year, or how often I can make grant recommendations?
Currently, there is no limit to the number of grants an advisor can recommend. Grant recommendations can be made at any time during the year.
Are there any restrictions on the grant size I can recommend?
There is a $5,000 minimum for gifts and a $25,000 minimum to start a fund. Currently, there is no maximum gift.
May I fulfill personal pledges through recommending a grant from United Way Worldwide?
In accordance with U. S. Treasury Department regulations, grants awarded from United Way Worldwide donor advised funds may not be used to fulfill personal pledges or to pay for memberships, dues, or anything that provides a direct benefit to a donor/fund advisor.
How long will it take to process my grant recommendation?
Barring any legal obstacles with a given country or communication issues with a potential grantee, grant processing time generally averages between 4-8 weeks from the moment the funds have been received by United Way Worldwide to receipt of funds by the grantee.
May I recommend grants anonymously?
Yes. You may indicate on your grant recommendation form that the fund name and/or the advisor name(s) be anonymous. Please be clear of your intent.
May I recommend a multi-year grant?
Yes. At the time of your recommendation, please indicate both the amount and schedule of the distribution that you advise. United Way Worldwide will review your recommendation and decide if the schedule is reasonable and appropriate. United Way Worldwide will also provide you with a tailored recommendation letter for this purpose.
Are there any countries that are ineligible for UWW funding?
Yes. In countries where there are U.S. government restrictions on foreign assistance, United Way Worldwide may not be able to fulfill a recommendation (Examples include Cuba and Iran). However, United Way Worldwide currently works in more than 100 countries outside of the US.
Does IDAG provide both Equivalency Determination (ED) and Expenditure Responsibility (ER) services?
Yes. IDAG offers the same low-cost fee for either ED or ER.
The Equivalency Determination process documents that the grantee organization is the equivalent of a U.S. public charity. To fulfill the requirements of equivalency determination, one must make a good faith determination on the basis of an affidavit from the potential grantee or an opinion of legal counsel (representing either the vetting entity or the potential grantee) that the grantee is the equivalent to a U.S. public charity. The grantee is required to submit five years of detailed financial information (a Public Support Test) as well as a foreign public charity equivalence affidavit to assist United Way Worldwide in determining whether the entity is the equivalent of a public charity as per the U.S. Internal Revenue Code. United Way Worldwide must use the ED process when making grants to organizations for general charitable operations.
Expenditure Responsibility starts before the grant is made, with a pre-grant inquiry. The grant must be made on specific terms and conditions, which must be embodied in a written grant agreement. The grantee must provide appropriate reports on the use of grant funds and United Way Worldwide must report the grant properly to IRS in its annual tax return.
Will I receive information on how my international grant recommendations made a difference?
Yes. You will be informed through program reports about the outcomes of a program your grant funded. You can request that both interim and final reports are provided for review as well as monthly and quarterly financial reports. We can also customize reporting requirements to meet your evaluation indicators and the security of your investment.