Your experience-Vanguard Charitable Endowment Program?

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vnatale
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Your experience-Vanguard Charitable Endowment Program?

Post by vnatale »

For almost all my charitable giving, I give capital gains appreciated securities. This year I intend to send three recipients shares of Vanguard Growth Mutual shares.

Vanguard makes this a real pain as for the recipients to get these shares direct from Vanguard (and not directly from me) each of them has to have an account with Vanguard. Plus, I have to send Vanguard a Giving Shares form signed by both them and me. And, it cannot be either scanned/e-mailed or faxed. They need to receive all original ink copies. So, when I do this each year, it takes a tremendous amount of time to go over all of what needs to be done with Vanguard and then work with the three recipient organizations for all I need to collect from them. And, then on top of that, Vanguard wants all of this received this year by December 17 to insure that they will complete the transactions (set up the new accounts/distribute the shares to them) by the end of 2012. They really won't even guarantee that they'll complete it all even if they receive it all in good order by December 17th. And, then if something does not get to them in good order they can reject my request. It's always been a time consuming nightmare every two years (which is how I do my donations - I do itemized donations every other year so as to get full benefit of my standard deduction the off years).

Yesterday a friend told me he'd been using the T Rowe Price donor advised fund and it'd make my life way easier than what I go through above every two years. So, today I talked to T Rowe Price a lot about their program. I was all set to do it except that a) I don't have full assurance that they can accept open ended mutual fund shares from Vanguard (the form they are having me send to Vanguard says specifically that it's to be used only for stocks and closed end mutual fund shares). And, after I open my account with T Rowe Price they'll take two to three days to make the request to Vanguard, which puts it at December 18th. Then, neither I nor T Rowe Price has any control over when Vanguard actually makes the transfer for shares to T Rowe Price. And I get no 2012 deduction unless Vanguard makes the transfer by 12/31/12. It should happen but I'll be nervous until it happens and there seem to be a lot of things up in the air.

While talking to Vanguard today regarding what specific information I should put on the T Rowe Price transfer form, I was informed about the Vanguard Donor Advised fund. I called them. I could set up an account tomorrow and Vanguard mutual funds transfer in a day! It's be the earliest yet I've ever had this extremely time consuming process wrapped up. No more having to be nervous if all was going to work.

Drawbacks are: Have to fund it with $25,000 to start - more than I wanted to charitably contribute this year. That $25,000 would exceed my 30% allowable for this year based upon my AGI (adjusted gross income). The excess would carry over to next year but it'd do me no good since I do not itemize next year. Finally, if your account is below $15,000 in March of a year, they tag you for $100. The $25,000 I could still do by telling myself I'm just making with the excess a cash down payment on what I'd be contributing for 2011/2012. I could cure the being over my 30% AGI by converting some of my Traditional IRA to a Roth IRA. Yes, I'd have to pay 30% combined federal/state taxes on that amount. But the taxes now would be paid at maybe the lowest rates for the rest of my lifetime and future earnings would never be taxed. And, in the light of all the time delays above and having to rely on others doing their jobs, I could initiate that exchange right now and it'd take place tomorrow.

So, a long winded explanation of why, of the three alternatives, I'm now leaning toward the Vanguard Donor Advised Fund or its real name of - Vanguard Charitable Endowment Program.

My question is whether any of you have experience with this and if you have any cautions for me getting involved with it.

Thanks

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Wagnerjb
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by Wagnerjb »

I have been using a Donor Advised Fund for the past three years and I am very pleased with it. I chose the Fidelity plan due to the lower minimums. But I am very impressed with the ability to designate a gift to a charity online, and their website is very user friendly. I donated appreciated individual stocks (which were held at Vanguard) and I wasn't under a time pressure....but I don't have a recollection that the donation was difficult or took an inordinate amount of time.

Best wishes.
Andy
mikemctx
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by mikemctx »

We also choose to go with Fidelity. Not only is Fidelity more flexible when opening an account ($5k vs $25k minimum) but they are also more flexible on grant size ($50 vs. $500 minimum). Fees are comparable between Vanguard and Fidelity. It was somewhat painful to choose something other than Vanguard since virtually all of our investments are with Vanguard. But Vanguard's minimums just didn't work for us.

Mike
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vnatale
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by vnatale »

I'm looking at Fidelity.

The starting minimum is much lower. $5,000 versus the Vanguard $25,000.

It seems, though, from this...

Individual Giving Account: 0.60% (60 basis points) or $100 (whichever is greater)

...that that would be equal to Vanguard charging their $100 in March if your balance is below $15,000?

I'd love to go with Fidelity but, again, my question is how quickly (and if) they could take control of my Vanguard Growth mutual fund shares.

Has anyone transferred Vanguard Growth mutual fund shares to his/her Fidelity account?

Vanguard states they'll take four to eight weeks to receive non-Vanguard mutual fund shares into their Vanguard donor fund. And they say this is standard for the industry. And that things go even slower at the end of the year.

Thanks

Vinny
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
stlutz
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by stlutz »

Are you trying to get this done before the end of 2012? If so, I think you'd be too late to do it at Fidelity etc. I use Schwab and these are their published deadlines:

http://www.schwabcharitable.org/public/ ... guidelines

If you were thinking more in terms of 2013, then by all means set something up at Fidelity. If you need help with the mechanics, just call them up and ask. VG is the largest mutual fund house in the country, so the folks at Fidelity Charitable have certainly handled transferring VG funds shares over before.

Just as a thought (without treading too far into banned territory here), taking away the tax advantages of doing gifting appreciated shares is something that could go away in a tax deal--it's kind of a convenient way to raise taxes without actually appearing to do anything. So, if you wanted to do something in 2012 it might be worth considering doing the $25K deposit to VG charitable. I have not done this, but the thought did cross my mind.
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by Allocationist »

My experience with the Vanguard Charitable Endowment (VCE) was, IMO, not satisfactory. I experienced hassles with getting grantees approved (even mainstream religious groups), a lack of follow-up/feedback to me for "stalled" grant requests and annoying requests for me to provide assurance that some of my requests were legitimate.

Example: I made a request to donate $2,007 to a well-known mainstream church that I had made multiple previous VCE donations. Several weeks after making the request I contacted the church and was told they hadn't received the donation. After not hearing anything from VCE I called them and was told they sent a questionnaire to the church to confirm their non-profit status and had not received a response (VCE previously received a response from the church to a previous questionnaire but VCE decided they needed another questionnaire). Apparently, VCE was going to sit on my request indefinitely until the church responded.

After working out the questionnaire problem the donation was still not completed. I called VCE and was told the odd amount ($2,007 vs. a "normal" $2,000 amount) raised VCE concern because it was an unusual amount and they thought I may up to some skulduggery (my word- not theirs). I explained that I liked to identify my donations by the last digit, i.e., my first donation ended with the number one, the second ended with number two, etc. After I convinced them my grant request was acceptable the church finally received the donation a few weeks later.

I ended up accelerating my grants to expend my funds so I didn't have to deal with the bureaucracy and incur their new fee increases.

JMO
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gasman
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by gasman »

Been using the VCEP for about eight years. Had some glitches and slow service till about three years ago. Flawless since then. We make about a dozen or so contributions per year from this fund. Don't like the $500 minimum or would use it more. Very easy to transfer assets from Vang brokerage electronically after getting a signature guarantee with a form to set up the process.
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by letsgobobby »

mikemctx wrote:We also choose to go with Fidelity. Not only is Fidelity more flexible when opening an account ($5k vs $25k minimum) but they are also more flexible on grant size ($50 vs. $500 minimum). Fees are comparable between Vanguard and Fidelity. It was somewhat painful to choose something other than Vanguard since virtually all of our investments are with Vanguard. But Vanguard's minimums just didn't work for us.

Mike
For exactly these reasons, we also use Fido. We've been very happy with them, and have never had a grant recommendation disapproved. They are fast, and they take Vanguard ETF shares (not sure about mutual funds, have never tried).

The fees are a little annoying but not onerous. Anyway, this isn't a 100 year trust. It's just a way to make our lives easier. We try to give away the money pretty quickly so it doesn't build up a lot. On the other hand, I went from 100% cash to 100% stocks on 2/17/09, so it really appreciated a lot on its own. I really enjoyed taking enormous risks with someone else's money.
Scotttheking
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by Scotttheking »

My mom uses Fidelity. No issues reported. They should be able to take any share that can be sold on the open market.
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by littlebird »

Have been with the Vang CEP for about 7 years. I have not been extremely happy with it because of the very high minimum grant (which of course I knew about), the strong sense that they are not very interested in relatively small accounts like mine and are primarily interested in attracting extremely wealthy people who would otherwise enter into a family foundation arrangement and, possibly as a consequence of the immediately foregoing, my account has generated more errors than I am accustomed to in my Vanguard investment accounts, to the degree that I must anticipate errors and try to circumvent them with arrows and highlighters. As an example, I generally request that my grants be made anonymously (one of the great, but unpublicized benefits of a DAF) but they did reveal my name to one recipient. Another time they made a grant to a "related" organization, without my permission, without any notification that they had done so and when I noticed the discrepancy, refused to allow me to speak to the person who actually made the decision to do so, but instead transmitted my questions and her answers through two intermediaries, leaving me dissatisfied.

I like the concept of the DAF very much and should another opportunity arise that would be beneficial for me to contribute to one, I would give Fidelity a try.
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by jj »

I set up an account with the Vanguard Charitable Endowment Program two years ago. $25,000 was the about the amount I wanted to contribute so I did not view the $25,000 minimum as a problem. As our assets are mostly with Vanguard it made more sense to stick with their endowment program, although I did look at Fidelity. I'm sure they do appreciate large donors, but I received nothing but courtesy when I called to discuss setting up the account and they knew the order of it. Transferring (my highly appreciated) Vanguard mutual funds was very easy, and I transferred a much smaller amount last year - again without problems. I have made three grants so far, all to charities that were recognized immediately by their system, these went straight through.

I have been very happy with VCEP so far.
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by SpaceCommander »

I went with Schwab for the same reasons many chose Fidelity above. Vanguard's minimums weren't to my liking. Funded it with appreciated shares (which was very nice). No problems with the service, and the fees are very competitive. I looked at Vanguard's program briefly, but didn't like the minimums. Schwab works for me. BTW, it is too late to try to transfer appreciated shares in time for 2012.
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by Retired in CA »

I've been using VCEP since 2007, and have generally had a good experience. I like it because I can transfer cash and appreciated securities from my Vanguard brokerage with not much more than a single click. I leave only a small amount in my VCEP account.

Two recent events have been somewhat surprising:

1. I use the VCEP money market option to store the minimal balance and recently noticed a decrease in the account value. I asked VCEP about this and received the following reply: "The movement you are seeing is the returns for the money market fund. Even though money market is fairly stable, there will still be fluctuations in account value" I had no idea that the VCEP MMF does not attempt a stable value of $1/share. In fact, the MM in VCEP has a share value of $10.97 and does indeed fluctuate over time.

2. I have always been under the impression that VCEP does not have a minimum account balance requirement (other than during February each year to avoid maintenance fees). Last week I recommended a grant that would have reduced the balance of my account to below $100. VCEP called me and told me that they now have a minimum requirement of requirement of $500.00 (which happens to coincide with the minimum grant amount). This seems reasonable, but it would have been useful to have been notified of this requirement.
KBR
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by KBR »

I used them for a while and was happy. The fees annoyed me of course but they have to pay their staff and do due diligence. The minimum IIRC was $500 and other companies are less so had I to do it again I'd probably go fidelity. Also VG had a limited number of choices for your funds. I don't know if Fidelity has more choices.
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by Artsdoctor »

I have both Fidelity and Vanguard DAFs. I had heavily appreciated assets at both, and I wanted to verify that the specific lots I wanted to donate were actually donated correctly. I don't have any regrets.

I use Vanguard for large grants (donations) and Fidelity for relatively small grants. It's very easy to transfer from the Vanguard DAF to the Fidelity DAF if I have to (the bulk of donated shares are at Vanguard).

I transfer a Vanguard ETF with the lowest cost basis to Vanguard Charitable in the morning and it's there the next day. They make take a couple of days to sell and credit the account.

Many, many years ago (before we had DAFs), I also found it cumbersome to donate appreciated Vanguard mutual fund shares directly to smaller charities. However, many have said that donating ETFs is easier since the recipient only needs a brokerage account (and not necessarily a Vanguard account).
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by Geologist »

Retired in CA wrote: Wed Mar 13, 2024 4:46 pm I've been using VCEP since 2007, and have generally had a good experience. I like it because I can transfer cash and appreciated securities from my Vanguard brokerage with not much more than a single click. I leave only a small amount in my VCEP account.

Two recent events have been somewhat surprising:

1. I use the VCEP money market option to store the minimal balance and recently noticed a decrease in the account value. I asked VCEP about this and received the following reply: "The movement you are seeing is the returns for the money market fund. Even though money market is fairly stable, there will still be fluctuations in account value" I had no idea that the VCEP MMF does not attempt a stable value of $1/share. In fact, the MM in VCEP has a share value of $10.97 and does indeed fluctuate over time.

It is almost surely the case that VCEP has to use an institutional money market fund. As a result of the regulatory reforms following the 2008-2009 financial crisis, institutional money market funds cannot have a stable net asset value.
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Re: Your experience-Vanguard Charitable Endowment Program?

Post by Retired in CA »

Geologist wrote: Thu Mar 14, 2024 6:35 am
Retired in CA wrote: Wed Mar 13, 2024 4:46 pm I've been using VCEP since 2007, and have generally had a good experience. I like it because I can transfer cash and appreciated securities from my Vanguard brokerage with not much more than a single click. I leave only a small amount in my VCEP account.

Two recent events have been somewhat surprising:

1. I use the VCEP money market option to store the minimal balance and recently noticed a decrease in the account value. I asked VCEP about this and received the following reply: "The movement you are seeing is the returns for the money market fund. Even though money market is fairly stable, there will still be fluctuations in account value" I had no idea that the VCEP MMF does not attempt a stable value of $1/share. In fact, the MM in VCEP has a share value of $10.97 and does indeed fluctuate over time.

It is almost surely the case that VCEP has to use an institutional money market fund. As a result of the regulatory reforms following the 2008-2009 financial crisis, institutional money market funds cannot have a stable net asset value.
Thanks for this information! Too bad the VCEP rep wasn't able to explain why so clearly.
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