Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
investingholder
Posts: 38
Joined: Sat Jan 26, 2013 2:01 pm

Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by investingholder » Sat Aug 04, 2018 7:23 am

I do not have my own personal business and my children do travel sports. Often we fundraise from local businesses for small sponsorships -- think dentist, realtor, etc. These funds go to the team's travel tournament fees, uniforms, and sometimes rental space for practices.

This year, I am thinking of "sponsoring" (giving a donation to) one of my children's travel sports teams this year. This would be above and beyond our team's fees to help with equipment, funds, etc.-- in the range of $200 to $500.

Can I do this via my DAF, or is that inappropriate because we are arguably getting a benefit? The overarching organization under which the team falls is recognized by the DAF as a 501(3)(c) charity - a local sports league.

If it is inappropriate, I can still do it via personal funds, and take the deduction right?

arsenalfan
Posts: 613
Joined: Mon Dec 09, 2013 12:26 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by arsenalfan » Sat Aug 04, 2018 7:38 am

I don't see a problem if it's a 501c3.
Be sure the 501c3 lets you designate funds specifically towards your kids team.

Gill
Posts: 4451
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Gill » Sat Aug 04, 2018 9:05 am

From your description of the planned use of the contribution, i.e., to benefit your child, this would not seem to be an appropriate grant from a DAF nor would it qualify as a charitable deduction for you individually. I'd be quite certain the DAF would refuse to make such a grant. Not much different than trying to give a contribution to a university to pay your son's tuition.
Gill

arsenalfan
Posts: 613
Joined: Mon Dec 09, 2013 12:26 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by arsenalfan » Sat Aug 04, 2018 9:08 am

Gill, if it's a legitimate 501c3, how is the DAF donating to it not legitimate?

Agree it seems fishy though.

Gill
Posts: 4451
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Gill » Sat Aug 04, 2018 9:11 am

arsenalfan wrote:
Sat Aug 04, 2018 9:08 am
Gill, if it's a legitimate 501c3, how is the DAF donating to it not legitimate?

Agree it seems fishy though.
See my example about university tuition. When it is benefiting the donor personally or someone dependent on him it is not a legitimate charitable gift. Tell the DAF what it is for and see what they say. I'll guarantee they'll decline. Not every gift to a 501(c)(3) is a charitable gift. Otherwise I'd give to the local theatre in exchange for season tickets, give to my university for my daughter's tuition or whatever.
Gill

staythecourse
Posts: 5811
Joined: Mon Jan 03, 2011 9:40 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by staythecourse » Sat Aug 04, 2018 9:18 am

investingholder wrote:
Sat Aug 04, 2018 7:23 am
I do not have my own personal business and my children do travel sports. Often we fundraise from local businesses for small sponsorships -- think dentist, realtor, etc. These funds go to the team's travel tournament fees, uniforms, and sometimes rental space for practices.

This year, I am thinking of "sponsoring" (giving a donation to) one of my children's travel sports teams this year. This would be above and beyond our team's fees to help with equipment, funds, etc.-- in the range of $200 to $500.

Can I do this via my DAF, or is that inappropriate because we are arguably getting a benefit? The overarching organization under which the team falls is recognized by the DAF as a 501(3)(c) charity - a local sports league.

If it is inappropriate, I can still do it via personal funds, and take the deduction right?
If it is a 501c designation it is deductible one way or another. If not then no.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

Gill
Posts: 4451
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Gill » Sat Aug 04, 2018 9:23 am

staythecourse wrote:
Sat Aug 04, 2018 9:18 am
If it is a 501c designation it is deductible one way or another. If not then no.

Good luck.
Have you read my earlier posts?
Gill

investingholder
Posts: 38
Joined: Sat Jan 26, 2013 2:01 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by investingholder » Sat Aug 04, 2018 9:30 am

I am curious about it because it is not exactly like tuition - we are already paying our own share of the fees.

Also, if I had my own company or was a realtor and wanted to donate and write it off, I could.

It is to a 501c3 so the logistics are not the question to me.

Gill
Posts: 4451
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Gill » Sat Aug 04, 2018 9:35 am

investingholder wrote:
Sat Aug 04, 2018 9:30 am
I am curious about it because it is not exactly like tuition - we are already paying our own share of the fees.
As I suggested above, try it with the DAF and tell them what it's for. Also, tell them you are telling the 501(c)(3) how to use the funds. I feel confident you will be declined. If it was your own company you would be deducting it as an advertising expense. That is quite different from a charitable gift.
Gill

investingholder
Posts: 38
Joined: Sat Jan 26, 2013 2:01 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by investingholder » Sat Aug 04, 2018 9:52 am

Thanks. Out of curiosity, do corporations and small companies truly deduct these expenses as "advertising" expenses? I have never heard that. Rather I see them asking for the 501c3 designation and acknowledgement of donation letters in exchange for small sponsorships of local teams.

livesoft
Posts: 61944
Joined: Thu Mar 01, 2007 8:00 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by livesoft » Sat Aug 04, 2018 9:57 am

There are terms one can search on the internet for when it comes to incidental benefits accrued from a charitable donation and for a quid pro quo contribution.

https://www.irs.gov/charities-non-profi ... tributions

I think what the OP is suggesting is a grey area. I think some aggressive tax accountants would not have a problem with it and some less aggressive tax accountants would have a problem with it. We see in today's headlines how accountants sometimes do not do appropriate things.
Wiki This signature message sponsored by sscritic: Learn to fish.

livesoft
Posts: 61944
Joined: Thu Mar 01, 2007 8:00 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by livesoft » Sat Aug 04, 2018 9:57 am

investingholder wrote:
Sat Aug 04, 2018 9:52 am
Thanks. Out of curiosity, do corporations and small companies truly deduct these expenses as "advertising" expenses? I have never heard that. Rather I see them asking for the 501c3 designation and acknowledgement of donation letters in exchange for small sponsorships of local teams.
"Deduct" is an expense and Yes, even charitable organizations pay for advertising expenses in the form of T-shirts with their logos.
Wiki This signature message sponsored by sscritic: Learn to fish.

investingholder
Posts: 38
Joined: Sat Jan 26, 2013 2:01 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by investingholder » Sat Aug 04, 2018 10:02 am

"Deduct" is an expense and Yes, even charitable organizations pay for advertising expenses in the form of T-shirts with their logos.
I am talking about the Realtor or Dentist who donates to the local 501c3 soccer league in exchange for their logo on the back of a team's t-shirt. The Realtor or Dentist isn't deducting that $500 as advertising are they?

randomguy
Posts: 5978
Joined: Wed Sep 17, 2014 9:00 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by randomguy » Sat Aug 04, 2018 10:05 am

Gill wrote:
Sat Aug 04, 2018 9:05 am
From your description of the planned use of the contribution, i.e., to benefit your child, this would not seem to be an appropriate grant from a DAF nor would it qualify as a charitable deduction for you individually. I'd be quite certain the DAF would refuse to make such a grant. Not much different than trying to give a contribution to a university to pay your son's tuition.
Gill
It is more like donating to a church or private school that you or your kids attend. Both of those are legal.

livesoft
Posts: 61944
Joined: Thu Mar 01, 2007 8:00 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by livesoft » Sat Aug 04, 2018 10:07 am

investingholder wrote:
Sat Aug 04, 2018 10:02 am
"Deduct" is an expense and Yes, even charitable organizations pay for advertising expenses in the form of T-shirts with their logos.
I am talking about the Realtor or Dentist who donates to the local 501c3 soccer league in exchange for their logo on the back of a team's t-shirt. The Realtor or Dentist isn't deducting that $500 as advertising are they?
Yes, they should be. They should not be deducting it as a charitable contribution.
Wiki This signature message sponsored by sscritic: Learn to fish.

aristotelian
Posts: 4357
Joined: Wed Jan 11, 2017 8:05 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by aristotelian » Sat Aug 04, 2018 10:27 am

Gill wrote:
Sat Aug 04, 2018 9:35 am
investingholder wrote:
Sat Aug 04, 2018 9:30 am
I am curious about it because it is not exactly like tuition - we are already paying our own share of the fees.
As I suggested above, try it with the DAF and tell them what it's for. Also, tell them you are telling the 501(c)(3) how to use the funds. I feel confident you will be declined. If it was your own company you would be deducting it as an advertising expense. That is quite different from a charitable gift.
Gill
How is he telling the 501c3 how to use the funds?
How is that any different from earmarking a contribution to hurricane reliec or whatever?

Gill
Posts: 4451
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Gill » Sat Aug 04, 2018 10:53 am

aristotelian wrote:
Sat Aug 04, 2018 10:27 am
How is he telling the 501c3 how to use the funds?
How is that any different from earmarking a contribution to hurricane reliec or whatever?
As I understand the plan, he would direct the charity to use the gift for the team on which his son plays. In that case he is using the charity to wash a gift he'd like to make to the team in an attempt to achieve a charitable deduction. It differs greatly from requesting a charity to use a gift for hurricane relief. That is fine, but if the gift is to be made to your son living in Houston following the hurricane that is prohibited.

I repeat my earlier suggestion; Ask the donor advised fund to make this grant, fully disclosing where it is to go, and see what they say.
Gill

aristotelian
Posts: 4357
Joined: Wed Jan 11, 2017 8:05 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by aristotelian » Sat Aug 04, 2018 11:24 am

Gill wrote:
Sat Aug 04, 2018 10:53 am
aristotelian wrote:
Sat Aug 04, 2018 10:27 am
How is he telling the 501c3 how to use the funds?
How is that any different from earmarking a contribution to hurricane reliec or whatever?
As I understand the plan, he would direct the charity to use the gift for the team on which his son plays. In that case he is using the charity to wash a gift he'd like to make to the team in an attempt to achieve a charitable deduction. It differs greatly from requesting a charity to use a gift for hurricane relief. That is fine, but if the gift is to be made to your son living in Houston following the hurricane that is prohibited.

I repeat my earlier suggestion; Ask the donor advised fund to make this grant, fully disclosing where it is to go, and see what they say.
Gill
I agree, he should talk to his DAF or a tax specialist, just trying to follow your reasoning. It sounds like what you are talking about would potentially fall under self-dealing, where you are using the charity to give a gift to yourself or a disqualified person.

I don't see any problem with "telling the 501cs how to use the funds" per se.

One possible way around self dealing would be to specify that it not go to his kid's team, and sponsor some other team.

MarkNYC
Posts: 1328
Joined: Mon May 05, 2008 7:58 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by MarkNYC » Sat Aug 04, 2018 12:30 pm

The individual is entitled to a charitable deduction on his personal tax return when he makes the donation to the Donor Advised Fund, not when the Fund makes the specific grant to the charitable organization, which could be one or more years after the original donation.

It would be the responsibility of the Fund organization to determine whether the specifics of the donor's grant request would provide an impermissible personal benefit, causing the Fund to deny the grant request. That decision by the Fund should have no effect on the donor's original charitable tax deduction.

staythecourse
Posts: 5811
Joined: Mon Jan 03, 2011 9:40 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by staythecourse » Sat Aug 04, 2018 1:35 pm

Gill wrote:
Sat Aug 04, 2018 9:23 am
staythecourse wrote:
Sat Aug 04, 2018 9:18 am
If it is a 501c designation it is deductible one way or another. If not then no.

Good luck.
Have you read my earlier posts?
Gill
Thank you for the correction. Just looked it up. If it is >$250 you have to prove it AND must show you did not receive anything in return. So NO in this case you can not deduct. Guess that makes sense since the term "gift" in IRS lingo means no expectation of a benefit back.

This of course opens a can of worms. How about giving to charity x that gave you a free calendar in the mail during Christmas time?

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

User avatar
FIREchief
Posts: 2423
Joined: Fri Aug 19, 2016 6:40 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by FIREchief » Sat Aug 04, 2018 1:51 pm

staythecourse wrote:
Sat Aug 04, 2018 1:35 pm
Gill wrote:
Sat Aug 04, 2018 9:23 am
staythecourse wrote:
Sat Aug 04, 2018 9:18 am
If it is a 501c designation it is deductible one way or another. If not then no.

Good luck.
Have you read my earlier posts?
Gill
Thank you for the correction. Just looked it up. If it is >$250 you have to prove it AND must show you did not receive anything in return. So NO in this case you can not deduct. Guess that makes sense since the term "gift" in IRS lingo means no expectation of a benefit back.

This of course opens a can of worms. How about giving to charity x that gave you a free calendar in the mail during Christmas time?

Good luck.
This is one of the beauties of using a DAF. As long as the DAF is a legit 501c3, you will likely never have any problems with the IRS. It is then between the DAF and the charity. Unlike us individuals, the major DAFs are likely very much in tune with all recent IRS rulings and practices; and well positioned to decide if your grant to the charity that gives out calendars can be approved.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

User avatar
GerryL
Posts: 1733
Joined: Fri Sep 20, 2013 11:40 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by GerryL » Sat Aug 04, 2018 2:20 pm

Sometimes the wording of the gift can make a difference. "I hope this donation can be applied to the travel funds of Team X" indicates where you would like the money to go, but the receiving org is under no obligation to comply. A call to the DAF to get clarity is a good idea.

Gill
Posts: 4451
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Gill » Sat Aug 04, 2018 2:34 pm

MarkNYC wrote:
Sat Aug 04, 2018 12:30 pm
The individual is entitled to a charitable deduction on his personal tax return when he makes the donation to the Donor Advised Fund, not when the Fund makes the specific grant to the charitable organization, which could be one or more years after the original donation.

It would be the responsibility of the Fund organization to determine whether the specifics of the donor's grant request would provide an impermissible personal benefit, causing the Fund to deny the grant request. That decision by the Fund should have no effect on the donor's original charitable tax deduction.
Mark, I believe OP was inquiring if he could deduct a gift individually if he didn’t use the DAF. I’ve told him it would fall under the same limitations and that I felt it was not deductible.
Gill

User avatar
FiveK
Posts: 5126
Joined: Sun Mar 16, 2014 2:43 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by FiveK » Sat Aug 04, 2018 2:38 pm

investingholder wrote:
Sat Aug 04, 2018 7:23 am
This year, I am thinking of "sponsoring" (giving a donation to) one of my children's travel sports teams this year. This would be above and beyond our team's fees to help with equipment, funds, etc.-- in the range of $200 to $500.
investingholder wrote:
Sat Aug 04, 2018 9:30 am
I am curious about it because it is not exactly like tuition - we are already paying our own share of the fees.
Seems this is exactly like a gift to the college your child currently attends - said gift being above and beyond all the tuition and fees one pays if the gift did not occur.

There would be no doubt the gift to the college would be deductible, and likewise no doubt that a gift to the sponsoring league that comes above and beyond all the required fees would also be deductible. Deductible by you if made directly, or deductible by the DAF if made by it.

staythecourse
Posts: 5811
Joined: Mon Jan 03, 2011 9:40 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by staythecourse » Sat Aug 04, 2018 4:30 pm

FIREchief wrote:
Sat Aug 04, 2018 1:51 pm
staythecourse wrote:
Sat Aug 04, 2018 1:35 pm
Gill wrote:
Sat Aug 04, 2018 9:23 am
staythecourse wrote:
Sat Aug 04, 2018 9:18 am
If it is a 501c designation it is deductible one way or another. If not then no.

Good luck.
Have you read my earlier posts?
Gill
Thank you for the correction. Just looked it up. If it is >$250 you have to prove it AND must show you did not receive anything in return. So NO in this case you can not deduct. Guess that makes sense since the term "gift" in IRS lingo means no expectation of a benefit back.

This of course opens a can of worms. How about giving to charity x that gave you a free calendar in the mail during Christmas time?

Good luck.
This is one of the beauties of using a DAF. As long as the DAF is a legit 501c3, you will likely never have any problems with the IRS. It is then between the DAF and the charity. Unlike us individuals, the major DAFs are likely very much in tune with all recent IRS rulings and practices; and well positioned to decide if your grant to the charity that gives out calendars can be approved.
Is that true? Do you have some documentation saying the DFA's responsibilities is to confirm that each contribution meets ALL IRS criteria otherwise they are legally and financially responsible? My guess is NO. I am nearly sure somewhere in all the paperwork you had to sign it says very clearly (in little words) that it is each persons responsibility they are acting in good faith to the laws governing charitable deductions and that they DO NOT take responsibility to verify. No different then the forms you sign with an accountant.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

User avatar
Silly Wabbit
Posts: 82
Joined: Sat Mar 25, 2017 9:54 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Silly Wabbit » Sat Aug 04, 2018 4:46 pm

What if the 501c.3 isn't an organization of multiple teams, but only the one team. The donation is made with no strings attached, but of course the funds may benefit a dependent.

User avatar
FiveK
Posts: 5126
Joined: Sun Mar 16, 2014 2:43 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by FiveK » Sat Aug 04, 2018 5:05 pm

Silly Wabbit wrote:
Sat Aug 04, 2018 4:46 pm
What if the 501c.3 isn't an organization of multiple teams, but only the one team. The donation is made with no strings attached, but of course the funds may benefit a dependent.
OK, I'll play. :)

First, it's unlikely that a single kids' sports team would pass 501c3 muster in the first place. But if it did, and the parent paid all the reasonably required team fees, amounts contributed to the 501c3 above and beyond that amount would be deductible.

Gill
Posts: 4451
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Gill » Sat Aug 04, 2018 5:29 pm

staythecourse wrote:
Sat Aug 04, 2018 4:30 pm
FIREchief wrote:
Sat Aug 04, 2018 1:51 pm
staythecourse wrote:
Sat Aug 04, 2018 1:35 pm
Gill wrote:
Sat Aug 04, 2018 9:23 am
staythecourse wrote:
Sat Aug 04, 2018 9:18 am
If it is a 501c designation it is deductible one way or another. If not then no.

Good luck.
Have you read my earlier posts?
Gill
Thank you for the correction. Just looked it up. If it is >$250 you have to prove it AND must show you did not receive anything in return. So NO in this case you can not deduct. Guess that makes sense since the term "gift" in IRS lingo means no expectation of a benefit back.

This of course opens a can of worms. How about giving to charity x that gave you a free calendar in the mail during Christmas time?

Good luck.
This is one of the beauties of using a DAF. As long as the DAF is a legit 501c3, you will likely never have any problems with the IRS. It is then between the DAF and the charity. Unlike us individuals, the major DAFs are likely very much in tune with all recent IRS rulings and practices; and well positioned to decide if your grant to the charity that gives out calendars can be approved.
Is that true? Do you have some documentation saying the DFA's responsibilities is to confirm that each contribution meets ALL IRS criteria otherwise they are legally and financially responsible? My guess is NO. I am nearly sure somewhere in all the paperwork you had to sign it says very clearly (in little words) that it is each persons responsibility they are acting in good faith to the laws governing charitable deductions and that they DO NOT take responsibility to verify. No different then the forms you sign with an accountant.

Good luck.
Yes, it is true. The DAF has the responsibility to determine that all grants are to qualified charities. They don’t accept your word for it and I’ve seen them go to considerable lengths investigating the proposed grantee to determine it is a qualified charity.
Gill

staythecourse
Posts: 5811
Joined: Mon Jan 03, 2011 9:40 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by staythecourse » Sat Aug 04, 2018 5:36 pm

Gill wrote:
Sat Aug 04, 2018 5:29 pm
staythecourse wrote:
Sat Aug 04, 2018 4:30 pm
FIREchief wrote:
Sat Aug 04, 2018 1:51 pm
staythecourse wrote:
Sat Aug 04, 2018 1:35 pm
Gill wrote:
Sat Aug 04, 2018 9:23 am

Have you read my earlier posts?
Gill
Thank you for the correction. Just looked it up. If it is >$250 you have to prove it AND must show you did not receive anything in return. So NO in this case you can not deduct. Guess that makes sense since the term "gift" in IRS lingo means no expectation of a benefit back.

This of course opens a can of worms. How about giving to charity x that gave you a free calendar in the mail during Christmas time?

Good luck.
This is one of the beauties of using a DAF. As long as the DAF is a legit 501c3, you will likely never have any problems with the IRS. It is then between the DAF and the charity. Unlike us individuals, the major DAFs are likely very much in tune with all recent IRS rulings and practices; and well positioned to decide if your grant to the charity that gives out calendars can be approved.
Is that true? Do you have some documentation saying the DFA's responsibilities is to confirm that each contribution meets ALL IRS criteria otherwise they are legally and financially responsible? My guess is NO. I am nearly sure somewhere in all the paperwork you had to sign it says very clearly (in little words) that it is each persons responsibility they are acting in good faith to the laws governing charitable deductions and that they DO NOT take responsibility to verify. No different then the forms you sign with an accountant.

Good luck.
Yes, it is true. The DAF has the responsibility to determine that all grants are to qualified charities. They don’t accept your word for it and I’ve seen them go to considerable lengths investigating the proposed grantee to determine it is a qualified charity.
Gill
Not to be difficult, but this is not the quite same thing as this scenario being presented. The question is NOT is x a qualified charity. The question is if you gave qualified charity X $5,000 that you got a free tote bag for in exchange (for example) and the IRS decided to make it a big issue is the liability of the penalty on the DAF or you the individual?

Just doesn't make sense that a DAF would want to take on that liability on an area that would be extremely difficult to verify for EVERY donation they are involved in. Of course, they are ethically and legally obligated that the charity is a qualified one, but is their legal responsibility to make sure the person giving the gift is NOT getting any advantage in return?

Appreciate the clarification.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

User avatar
FIREchief
Posts: 2423
Joined: Fri Aug 19, 2016 6:40 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by FIREchief » Sat Aug 04, 2018 5:44 pm

staythecourse wrote:
Sat Aug 04, 2018 4:30 pm
FIREchief wrote:
Sat Aug 04, 2018 1:51 pm
staythecourse wrote:
Sat Aug 04, 2018 1:35 pm
Gill wrote:
Sat Aug 04, 2018 9:23 am
staythecourse wrote:
Sat Aug 04, 2018 9:18 am
If it is a 501c designation it is deductible one way or another. If not then no.

Good luck.
Have you read my earlier posts?
Gill
Thank you for the correction. Just looked it up. If it is >$250 you have to prove it AND must show you did not receive anything in return. So NO in this case you can not deduct. Guess that makes sense since the term "gift" in IRS lingo means no expectation of a benefit back.

This of course opens a can of worms. How about giving to charity x that gave you a free calendar in the mail during Christmas time?

Good luck.
This is one of the beauties of using a DAF. As long as the DAF is a legit 501c3, you will likely never have any problems with the IRS. It is then between the DAF and the charity. Unlike us individuals, the major DAFs are likely very much in tune with all recent IRS rulings and practices; and well positioned to decide if your grant to the charity that gives out calendars can be approved.
Is that true? Do you have some documentation saying the DFA's responsibilities is to confirm that each contribution meets ALL IRS criteria otherwise they are legally and financially responsible? My guess is NO. I am nearly sure somewhere in all the paperwork you had to sign it says very clearly (in little words) that it is each persons responsibility they are acting in good faith to the laws governing charitable deductions and that they DO NOT take responsibility to verify. No different then the forms you sign with an accountant.

Good luck.
Not sure why you were questioning me so much on this, but Gill has already given you the correct answers to your questions. You need to understand that the DAF itself is a 501c3 and that if they make grants to entities that fail to meet IRS criteria the DAF's own 501c3 status is what is at risk.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

User avatar
FIREchief
Posts: 2423
Joined: Fri Aug 19, 2016 6:40 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by FIREchief » Sat Aug 04, 2018 5:49 pm

staythecourse wrote:
Sat Aug 04, 2018 5:36 pm
Of course, they are ethically and legally obligated that the charity is a qualified one, but is their legal responsibility to make sure the person giving the gift is NOT getting any advantage in return?
You seem to be missing something here. Once an individual contributes to their DAF, their charitable donation is complete and the funds now belong to the DAF. If/when the DAF executes a Grant, the one making the gift is the DAF.
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

daveydoo
Posts: 1360
Joined: Sun May 15, 2016 1:53 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by daveydoo » Sat Aug 04, 2018 7:14 pm

Gill wrote:
Sat Aug 04, 2018 10:53 am
I repeat my earlier suggestion; Ask the donor advised fund to make this grant, fully disclosing where it is to go, and see what they say.
This is not the final word by any means. The DAF custodian simply wants 100% protection for themselves. OP only needs 95% protection. It's not an issue of legality; it's an issue of interpretation.

To me, it's like donating your dues to your local religious organization -- you're not fully unconflicted in that you derive some spiritual benefit.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

Gill
Posts: 4451
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Gill » Sat Aug 04, 2018 7:22 pm

daveydoo wrote:
Sat Aug 04, 2018 7:14 pm
Gill wrote:
Sat Aug 04, 2018 10:53 am
I repeat my earlier suggestion; Ask the donor advised fund to make this grant, fully disclosing where it is to go, and see what they say.
This is not the final word by any means. The DAF custodian simply wants 100% protection for themselves. OP only needs 95% protection. It's not an issue of legality; it's an issue of interpretation.

To me, it's like donating your dues to your local religious organization -- you're not fully unconflicted in that you derive some spiritual benefit.
Yes, it is the final word. If the DAF won’t make the grant it doesn’t get made.
Gill

daveydoo
Posts: 1360
Joined: Sun May 15, 2016 1:53 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by daveydoo » Sat Aug 04, 2018 7:27 pm

Gill wrote:
Sat Aug 04, 2018 7:22 pm
daveydoo wrote:
Sat Aug 04, 2018 7:14 pm
Gill wrote:
Sat Aug 04, 2018 10:53 am
I repeat my earlier suggestion; Ask the donor advised fund to make this grant, fully disclosing where it is to go, and see what they say.
This is not the final word by any means. The DAF custodian simply wants 100% protection for themselves. OP only needs 95% protection. It's not an issue of legality; it's an issue of interpretation.

To me, it's like donating your dues to your local religious organization -- you're not fully unconflicted in that you derive some spiritual benefit.
Yes, it is the final word. If the DAF won’t make the grant it doesn’t get made.
Gill
Ugh. Not the final word on appropriateness. I should have been more specific. They are neither experts nor advocates; they are merely defensive. It's like a bouncer asking if you're on the list. That's what they want to know. I've been through this with our DAF. I've had no trouble making contributions. If I asked to speak to Fido's VP in charge of all this and told him/her in great detail about the colorful and inspirational newsletter I receive (for example), they might conclude that I am receiving a tangible benefit. So I do not do this.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

trueblueky
Posts: 1311
Joined: Tue May 27, 2014 3:50 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by trueblueky » Sat Aug 04, 2018 7:58 pm

daveydoo wrote:
Sat Aug 04, 2018 7:14 pm
Gill wrote:
Sat Aug 04, 2018 10:53 am
I repeat my earlier suggestion; Ask the donor advised fund to make this grant, fully disclosing where it is to go, and see what they say.
This is not the final word by any means. The DAF custodian simply wants 100% protection for themselves. OP only needs 95% protection. It's not an issue of legality; it's an issue of interpretation.

To me, it's like donating your dues to your local religious organization -- you're not fully unconflicted in that you derive some spiritual benefit.
The IRS says if you give a donation and receive something in return, you can only deduct the difference in value. For instance, you pay $100/couple to attend a chicken dinner for Red Cross. If the chicken dinner was worth $20/person, you can claim $60 as a donation.

The IRS also says intangible benefits, such as spiritual benefits, do not reduce the deductible amount. If they did, many of the $5/week parishioners would be in the hole.

None of this applies directly to DAF.

daveydoo
Posts: 1360
Joined: Sun May 15, 2016 1:53 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by daveydoo » Sun Aug 05, 2018 2:30 am

trueblueky wrote:
Sat Aug 04, 2018 7:58 pm

The IRS also says intangible benefits, such as spiritual benefits, do not reduce the deductible amount. If they did, many of the $5/week parishioners would be in the hole.

None of this applies directly to DAF.
Yes, that was the point -- I was being facetious. You can read the thread to see how we got here. I agree that none of this has anything to do with a DAF,
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"

Cruise
Posts: 589
Joined: Mon Nov 21, 2016 7:17 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Cruise » Sun Aug 05, 2018 3:55 am

investingholder wrote:
Sat Aug 04, 2018 7:23 am
I do not have my own personal business and my children do travel sports. Often we fundraise from local businesses for small sponsorships -- think dentist, realtor, etc. These funds go to the team's travel tournament fees, uniforms, and sometimes rental space for practices.

This year, I am thinking of "sponsoring" (giving a donation to) one of my children's travel sports teams this year. This would be above and beyond our team's fees to help with equipment, funds, etc.-- in the range of $200 to $500.

Can I do this via my DAF, or is that inappropriate because we are arguably getting a benefit? The overarching organization under which the team falls is recognized by the DAF as a 501(3)(c) charity - a local sports league.

If it is inappropriate, I can still do it via personal funds, and take the deduction right?
There is no question you can ask the DAF to direct a donation to the charity. You can correctly certify that no benefit is received if you make sure to use your personal funds to donate additional money equal to whatever minimal benefit your son might receive in the way of some team subsidy (e.g., reduced cost shirt or travel).

Your charity is likely a small local one. Just tell the treasurer what your good intentions involve.

Cruise
Posts: 589
Joined: Mon Nov 21, 2016 7:17 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Cruise » Sun Aug 05, 2018 3:55 am

investingholder wrote:
Sat Aug 04, 2018 7:23 am
I do not have my own personal business and my children do travel sports. Often we fundraise from local businesses for small sponsorships -- think dentist, realtor, etc. These funds go to the team's travel tournament fees, uniforms, and sometimes rental space for practices.

This year, I am thinking of "sponsoring" (giving a donation to) one of my children's travel sports teams this year. This would be above and beyond our team's fees to help with equipment, funds, etc.-- in the range of $200 to $500.

Can I do this via my DAF, or is that inappropriate because we are arguably getting a benefit? The overarching organization under which the team falls is recognized by the DAF as a 501(3)(c) charity - a local sports league.

If it is inappropriate, I can still do it via personal funds, and take the deduction right?
There is no question you can ask the DAF to direct a donation to the charity. You can correctly certify that no benefit is received if you make sure to use your personal funds to donate additional money equal to whatever minimal benefit your son might receive in the way of some team subsidy (e.g., reduced cost shirt or travel).

Your charity is likely a small local one. Just tell the treasurer what your good intentions involve.

motorcyclesarecool
Posts: 490
Joined: Sun Dec 14, 2014 7:39 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by motorcyclesarecool » Sun Aug 05, 2018 6:04 am

A DAF cannot be used to fulfill a legal obligation or in a quid pro quo transaction like tickets to a charitable fundraiser, however, if the obligation has already been met, (as confirmed in the OP) and the grant won’t change anything about your kid’s involvement on the team, or result in a specific benefit to him or her, I see no issue.
investingholder wrote:
Sat Aug 04, 2018 7:23 am
[....]Often we fundraise from local businesses for small sponsorships -- think dentist, realtor, etc. These funds go to the team's travel tournament fees, uniforms, and sometimes rental space for practices.
It appears that the main benefit to your kid, if any, would be less time spent fundraising. That strikes me as being fairly intangible.
investingholder wrote:
Sat Aug 04, 2018 7:23 am
Can I do this via my DAF, or is that inappropriate because we are arguably getting a benefit?
I think there are two modifications you can make to such a grant that could make clear your charitable intent, and place distance between it and your kid:
1. Make the grant anonymously.
2. Give the league flexibility in the grant designation: “This grant is intended to assist this year’s fundraising goals of the Mudville Nine. Otherwise it can be used wherever needed most.”
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

Gill
Posts: 4451
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by Gill » Sun Aug 05, 2018 6:14 am

Keep in mind, you don’t direct a DAF to make a grant, you advise or suggest the grant.
Gill

motorcyclesarecool
Posts: 490
Joined: Sun Dec 14, 2014 7:39 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by motorcyclesarecool » Sun Aug 05, 2018 6:16 am

I think most people in this thread are hung up on the word “sponsor” which does often imply a quid-pro-quo relationship.
Understand that choosing an HDHP is very much a "red pill" approach. Most would rather pay higher premiums for a $20 copay per visit. They will think you weird for choosing an HSA.

investingholder
Posts: 38
Joined: Sat Jan 26, 2013 2:01 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by investingholder » Sun Aug 05, 2018 8:27 am

It appears that the main benefit to your kid, if any, would be less time spent fundraising. That strikes me as being fairly intangible.
...
I think there are two modifications you can make to such a grant that could make clear your charitable intent, and place distance between it and your kid:
1. Make the grant anonymously.
2. Give the league flexibility in the grant designation: “This grant is intended to assist this year’s fundraising goals of the Mudville Nine. Otherwise it can be used wherever needed most.”
Thank you. The less time spent fundraising is indeed my main motivation. If I had a small business myself, I would certainly make a donation that way. I actually want this donation to be made anonymously and I appreciate everyone's discussion and suggestions.

staythecourse
Posts: 5811
Joined: Mon Jan 03, 2011 9:40 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by staythecourse » Sun Aug 05, 2018 8:37 am

FIREchief wrote:
Sat Aug 04, 2018 5:49 pm
staythecourse wrote:
Sat Aug 04, 2018 5:36 pm
Of course, they are ethically and legally obligated that the charity is a qualified one, but is their legal responsibility to make sure the person giving the gift is NOT getting any advantage in return?
You seem to be missing something here. Once an individual contributes to their DAF, their charitable donation is complete and the funds now belong to the DAF. If/when the DAF executes a Grant, the one making the gift is the DAF.
Thanks for the clarification. Don't take it personally I question EVERYTHING. The reason I can say I am as successful as I am is I question ANYTHING I don't understand until I get an answer that makes sense. Same as investing. Your explanation makes sense.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

letsgobobby
Posts: 11405
Joined: Fri Sep 18, 2009 1:10 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by letsgobobby » Sun Aug 05, 2018 9:47 am

aristotelian wrote:
Sat Aug 04, 2018 11:24 am


One possible way around self dealing would be to specify that it not go to his kid's team, and sponsor some other team.
Well that is a big difference though, isn't it?

So OP, would you make this gift if you knew with certainty your gift could NOT be used for your son's team? If not, we've laid bare the charade.

Not much different than making a "donation" to my daughter's school district so she personally doesn't have to waste time fundraising for her trip to Europe.. "Please make sure little Janie's class gets this money... And send me my tax deductible receipt, please." That could hardly be considered proper. In contrast if I donated so the school district's contribution to the entire class (across all schools) benefited from needing to fundraise a lower amount, that would seem allowable.

For OP there can be no justification as a business expense, so the only option is as charitable donation, which doesn't fly for me.
Last edited by letsgobobby on Sun Aug 05, 2018 9:56 am, edited 1 time in total.

User avatar
dm200
Posts: 17113
Joined: Mon Feb 26, 2007 2:21 pm
Location: Washington DC area

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by dm200 » Sun Aug 05, 2018 9:50 am

Gill wrote:
Sun Aug 05, 2018 6:14 am
Keep in mind, you don’t direct a DAF to make a grant, you advise or suggest the grant.
Gill
Yes - the DAF has its standards, rules and process.

User avatar
triceratop
Moderator
Posts: 5450
Joined: Tue Aug 04, 2015 8:20 pm
Location: la la land

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by triceratop » Sun Aug 05, 2018 2:38 pm

This topic has been moved to the Personal Finance (Not Investing) forum.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

cherijoh
Posts: 4852
Joined: Tue Feb 20, 2007 4:49 pm
Location: Charlotte NC

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by cherijoh » Sun Aug 05, 2018 3:03 pm

staythecourse wrote:
Sat Aug 04, 2018 1:35 pm
Gill wrote:
Sat Aug 04, 2018 9:23 am
staythecourse wrote:
Sat Aug 04, 2018 9:18 am
If it is a 501c designation it is deductible one way or another. If not then no.

Good luck.
Have you read my earlier posts?
Gill
Thank you for the correction. Just looked it up. If it is >$250 you have to prove it AND must show you did not receive anything in return. So NO in this case you can not deduct. Guess that makes sense since the term "gift" in IRS lingo means no expectation of a benefit back.

This of course opens a can of worms. How about giving to charity x that gave you a free calendar in the mail during Christmas time?

Good luck.
I think they get around that by sending out the calendar before you make the contribution. :happy On the other hand, when I have donated to my local NPR fundraising campaign, if I select a gift like a t-shirt, coffee mug, or tickets to a show, the value of that gift is listed in my thank you receipt and I reduced the charitable contribution that I reported on my taxes.

randomguy
Posts: 5978
Joined: Wed Sep 17, 2014 9:00 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by randomguy » Sun Aug 05, 2018 3:31 pm

letsgobobby wrote:
Sun Aug 05, 2018 9:47 am
aristotelian wrote:
Sat Aug 04, 2018 11:24 am


One possible way around self dealing would be to specify that it not go to his kid's team, and sponsor some other team.
Well that is a big difference though, isn't it?

So OP, would you make this gift if you knew with certainty your gift could NOT be used for your son's team? If not, we've laid bare the charade.

Not much different than making a "donation" to my daughter's school district so she personally doesn't have to waste time fundraising for her trip to Europe.. "Please make sure little Janie's class gets this money... And send me my tax deductible receipt, please." That could hardly be considered proper. In contrast if I donated so the school district's contribution to the entire class (across all schools) benefited from needing to fundraise a lower amount, that would seem allowable.

For OP there can be no justification as a business expense, so the only option is as charitable donation, which doesn't fly for me.
Why isn't it proper? Does anyone have problems deducting the thousands of dollars they donate to a church that they attend? Donating to you directly is wrong. Donating to a group you are part of seems to be pretty acceptable in a bunch of cases. The part that seems really sketchy is that a bunch of these groups are considered tax deductible groups. But that is up to the IRS/society, not me.

47Percent
Posts: 253
Joined: Tue Oct 29, 2013 9:59 pm

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by 47Percent » Sun Aug 05, 2018 5:49 pm

investingholder wrote:
Sat Aug 04, 2018 7:23 am
I do not have my own personal business and my children do travel sports. Often we fundraise from local businesses for small sponsorships -- think dentist, realtor, etc. These funds go to the team's travel tournament fees, uniforms, and sometimes rental space for practices.

This year, I am thinking of "sponsoring" (giving a donation to) one of my children's travel sports teams this year. This would be above and beyond our team's fees to help with equipment, funds, etc.-- in the range of $200 to $500.

Can I do this via my DAF, or is that inappropriate because we are arguably getting a benefit? The overarching organization under which the team falls is recognized by the DAF as a 501(3)(c) charity - a local sports league.

If it is inappropriate, I can still do it via personal funds, and take the deduction right?
If you step back a bit, the answer could be really simple.

First, if the DAF donation recipient allows you to designate to a specific team, and because of that donation you are not getting a personal benefit (i.e. the personal benefit is not contingent on the gift), then it is all well and good. It looks like this is the case.

Second, there is really no difference from your side betn. you giving through DAF, and you giving via personal funds and deducting. It is one and the same.

So, I would say both are perfectly okay. If the DAF recipient does not allow you to designate a specific team, then you have to decide what you want to do.

letsgobobby
Posts: 11405
Joined: Fri Sep 18, 2009 1:10 am

Re: Can I use my Donor Advised Fund to give extra cash to sponsor my kids travel sports team?

Post by letsgobobby » Sun Aug 05, 2018 6:01 pm

randomguy wrote:
Sun Aug 05, 2018 3:31 pm
letsgobobby wrote:
Sun Aug 05, 2018 9:47 am
aristotelian wrote:
Sat Aug 04, 2018 11:24 am


One possible way around self dealing would be to specify that it not go to his kid's team, and sponsor some other team.
Well that is a big difference though, isn't it?

So OP, would you make this gift if you knew with certainty your gift could NOT be used for your son's team? If not, we've laid bare the charade.

Not much different than making a "donation" to my daughter's school district so she personally doesn't have to waste time fundraising for her trip to Europe.. "Please make sure little Janie's class gets this money... And send me my tax deductible receipt, please." That could hardly be considered proper. In contrast if I donated so the school district's contribution to the entire class (across all schools) benefited from needing to fundraise a lower amount, that would seem allowable.

For OP there can be no justification as a business expense, so the only option is as charitable donation, which doesn't fly for me.
Why isn't it proper? Does anyone have problems deducting the thousands of dollars they donate to a church that they attend? Donating to you directly is wrong. Donating to a group you are part of seems to be pretty acceptable in a bunch of cases. The part that seems really sketchy is that a bunch of these groups are considered tax deductible groups. But that is up to the IRS/society, not me.
The IRS has determined that benefits derived from a house of worship are spiritual, and not material.

Post Reply