A Guide to Philanthropic Funds

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What is a Philanthropic Fund?

A Philanthropic Fund (often referred to as a “Donor Advised Fund”) is a flexible charitable giving tool
to help you and your family meet your charitable goals. It functions like a charitable checking
account, allowing you to add funds and make distributions at your convenience.

Once established, you may make additional contributions to the fund at any time and recommend distributions to approved Internal Revenue Code § 501(c)(3) charitable organizations. The fund is credited/debited with actual investment returns and grows tax-free, enhancing the amount available for charitable purposes.

Getting Started

Creating your Philanthropic Fund

Each Philanthropic Fund is governed by a written agreement between the United Jewish Foundation
of Detroit and the Donor of the fund. An agreement takes just minutes to prepare. You can expedite
this process by completing the Philanthropic Fund Application (Appendix V) and forwarding it to the
United Jewish Foundation of Detroit, or by asking for the Endowment Department at 248.642.4260.

Naming your fund

As the initial donor of a Philanthropic Fund, you need to designate the name of the fund on the
application form. A fund name can include your name, the name of your family or any other name that
is meaningful to you.

Making contributions

A minimum contribution of $5,000 is required to establish a Philanthropic Fund. Additional
contributions, in any amount, can be made at any time. These additional amounts are eligible for tax
deductions in the year they are contributed to the fund. We ask that the fund be maintained with a
minimum balance of $5,000.

Contributing assets / property to your fund

Assets which may be contributed to a Philanthropic Fund include cash (checks or wire transfers) and
publicly traded securities. Please contact the United Jewish Foundation of Detroit about gifts of
privately held businesses, restricted stock, real estate and other assets — which also may be
contributed in particular circumstances — for assistance in the smooth transfer of these assets.

Naming successor donor advisers

At a donor’s request, a Philanthropic Fund can be advised by persons representing up to two
generations – the donor(s) and the next generation. At such time as there are no remaining donor
advisors, the fund’s balance is paid to the Jewish Federation of Detroit.

Investment of Philanthropic Funds

The United Jewish Foundation of Detroit provides seven different investment strategies for the management of Philanthropic Funds:

United Jewish Foundation Balanced Investment Portfolio – Multiple passive and active styled
portfolios managed by 20 investment managers. The fund currently has a target asset allocation of
75% Growth Assets and 25% Risk Reduction Assets.
United Jewish Foundation Fixed Income Investment Portfolio – Portfolio is invested in the broad
bond market with investments in U.S. government and high quality corporate and mortgagebacked
bonds.
Short-Term Money Market Fund– Federal Government Obligations Fund Short-Term Liquidity Pool
U.S. Stock Index Fund. – Vanguard Total Stock Market Index Fund Symbol: VITSX
U.S. Active Large Cap Stock Fund.– MFS Massachusetts Investors Trust Fund Class I Symbol:
SDSCX
U.S. Aggressive Growth Stock Fund. – BNY Mellon Small/Mid Cap Growth Fund Symbol: SDSCX
Non-U.S. Stock Fund – American Funds EuroPacific Growth Fund Symbol: AEPGX
Socially Responsible Investment Option – RBC Global Opportunities Fund Class I Symbol: RGOIX
Israel Impact Focused Investment Option – VanEck Vectors Israel ETF Symbol: ISRA

The Board of Governors of the United Jewish Foundation of Detroit, with the assistance of its Investment Committee and investment consultant, monitor the asset allocation, fund selections, performance and fees of each of the investment pools.

Donors may recommend that their funds be invested in one or more of these pools and may suggest changes to the investment allocation as of the first day of any month. To suggest such a change, donor(s) must advise the United Jewish Foundation of Detroit of their recommendation in writing prior to the end of the preceding month.

Key Features of Our Philanthropic Funds

Tax deductions

If you itemize tax deductions on your tax return, you may claim a federal charitable income tax deduction for your gift to a Philanthropic Fund in the year of contribution subject to the following limits:

These deductions may be limited by current tax law. Any amount which is not able to be deducted in the year of contribution may be carried forward and may be deducted over the next five years. Be sure to consult with your tax professional to determine the tax-deductible value and benefit of your contributions to the fund.

Tax reporting

The United Jewish Foundation of Detroit provides each donor to a Philanthropic Fund with receipts documenting contributions. For contributed assets requiring an appraisal to determine their tax-deductible value, donors need to obtain the appraisal. In addition, the United Jewish Foundation of Detroit must report to the IRS the sale proceeds it realizes on the sale of appraised property if the sale occurs within two years of its contribution.

When you establish a Philanthropic Fund, you do not need to keep records for income tax purposes of distributions made from your fund to charities. Individual donors receive a tax deduction when they make their initial gift to a Philanthropic Fund and when they make subsequent gifts to their fund. Thus, distributions from the Philanthropic Fund are grants from the United Jewish Foundation of Detroit. As such, you are not allowed to take a second tax deduction at the time those distributions are made to charities.

Fees

There are no transaction fees for new contributions to your fund, investment pool changes or distributions to other charities. Each Philanthropic Fund is charged an administrative fee of three quarters of one percent (.75%) per year. These fees are paid by the Philanthropic Fund monthly, up to a maximum of $15,000 annually. In addition, each Philanthropic Fund also pays its pro rata share of the investment management fees for the investment pool in which it is invested.

Philanthropic Fund accounts with balances above $2 Million opened after February 28, 2018, will be charged the base administrative fee of three-quarters of one percent (.75%) on the first $2 Million plus .10% (one-tenth of one percent) on all amounts over $2 Million.

Perpetuity of funds

The donor of a Philanthropic Fund may establish that upon the death, resignation or incapacity of all donor advisors that the fund be maintained to support (a) the Federation through a Perpetual Annual Campaign Endowment (“PACE”) Fund to provide an annual gift in the donor’s name to support Federation’s Annual Campaign in perpetuity, (b) a specific agency of the Federation or (c) a community priority.

Type of Contribution	Tax Deductibility
Cash	Currently up to 60% of adjusted gross income
Long-term, appreciated property	Up to 30% of adjusted gross income

Making Distributions from Your Fund

Recommend distributions from your fund

As a donor advisor, you may recommend that distributions of at least $250 be made from your Philanthropic Fund at any time. Under current federal tax law, there are no minimum annual distributions required from Philanthropic Funds. We encourage you to take advantage of the knowledge and expertise of the United Jewish Foundation of Detroit’s endowment team members. They can provide you with valuable information regarding local community needs and assist you with questions about specific nonprofit organizations.

All recommendations for distributions from Philanthropic Funds are subject to staff review and the review and approval of the Federation’s Grants & Distributions Committee. The following guidelines must be followed with respect to recommendations for distributions:

Recommendations for distributions should be submitted on a Philanthropic Fund Distribution Recommendation Form, signed by a donor advisor, by U.S. mail, e-mail or via Donorsphere. We process and distribute grant checks at least twice a month.
Donorsphere is Federation’s on-line donor portal. It allows a donor to electronically suggest philanthropic grants and access a fund’s recent activity and current balance. Registration is available at jewishdetroit.org/donorsphere by selecting “Register.” Questions should be directed to holland@jewishdetroit.org.
The minimum distribution for each charitable grant is $250 and can be done at jewishdetroit.org/distribution.
An unlimited number of distributions are permitted from each fund.
Subject to approval by Federation, distributions may be made to any tax-exempt public charitable organization within the United States, provided it meets the qualifications set forth by sections 170(c), 501(c)(3) or 170(b)(1)(A) of the Internal Revenue Code; gifts may not be distributed to any type of private foundation.
Distributions may not be used to satisfy any personal or corporate pledge or obligation of a donor or advisor, or to provide a benefit to a donor or advisor — such as paying synagogue membership dues, obtaining event or raffle tickets, or attending charity dinners — unless the benefit is permitted by the then-applicable Internal Revenue Code and related regulations.
The Federation prohibits distributions to organizations that promote anti-Semitism or other forms of hate, bigotry and intolerance, including those that endorse extremist views which condone violence. The Federation also prohibits distributions to organizations that advocate against Israel’s legitimacy as a secure democratic Jewish state.

Distribution acknowledgement

A letter accompanies each distribution to a charitable organization. The donor advisor receives a copy of that letter.

Quarterly reports

Donor advisors to a Philanthropic Fund receive quarterly reports summarizing the activities of the fund via Donorsphere or by mail. The report shows contributions, income earned and fees paid by the fund, and any distributions to charities made during that quarter.

Address of charities

Donations for organizations with many chapters are mailed to the office closest to the Federation unless otherwise notified by the donor. If you wish to have a distribution mailed to a specific address, please provide us that address.

Federation’s Endowment Team

Feel free to contact any member of our Endowment Team with questions you may have regarding a Philanthropic Fund or charitable giving.

Stacey Deweese
Director, Jewish Community Endowment Fund
(248) 205-2547
deweese@jewishdetroit.org

Nicole Feinberg
Philanthropic Advancement Associate
(248) 833-2519
feinberg@jewishdetroit.org

Susan Feldman
Director, Philanthropy and Corporate Relations
(248) 203-1461
sfeldman@jewishdetroit.org

Dan Greenberg
Director, Major Gifts
(248) 642-5638
dgreenberg@jewishdetroit.org

Jonathan Lowe
Director, Charitable Gift Planning
(248) 203-1490
lowe@jewishdetroit.org

Mimi Marcus
Senior Philanthropic Advancement Associate
(248) 205-2535
mmarcus@jewishdetroit.org

Brian Satovsky
Senior Associate, Philanthropic Advancement
(248) 205-2553
satovsky@jewishdetroit.org

Tina Sula
Senior Director, Philanthropy
(248) 203-1450
sula@jewishdetroit.org

Ari Witkin
Director, Strategy and Philanthropic Impact
(248) 203-1460
witkin@jewishdetroit.org

Disclaimer

All Philanthropic Funds are component funds of the United Jewish Foundation of Detroit. The investments of the Philanthropic Funds are investments of the United Jewish Foundation of Detroit and are subject to the approval of its Board of Governors. As such, the asset allocations, underlying investments and investment managers for these funds are the responsibility of and within the exclusive control of the United Jewish Foundation of Detroit. Investments within Philanthropic Funds are not subject to any federal or Michigan securities registration or law.

The information contained in this handbook is intended to inform you of the administrative and tax rules applicable to Philanthropic Funds. This is not intended to provide legal or tax advice. You are encouraged to contact your professional advisor with any questions you may have. The information contained in this handbook, and the policies governing the administration of Philanthropic Funds, is subject to change without notice by the United Jewish Foundation of Detroit. Changes will be made as necessary to ensure the Philanthropic Fund program’s compliance with applicable federal and state laws and regulations.

Appendix I: Frequently Asked Questions about Making Distributions from Your Philanthropic Fund

You can recommend distributions from your Philanthropic Fund at any time. Provide your
recommendations in writing by U.S. Mail to:

Philanthropic Funds
Jewish Federation of Detroit
6735 Telegraph Rd.
Bloomfield Hills, MI 48307

by emailing philfund@jewishdetroit.org or Donorsphere and we’ll process your recommendations. Please use the printed Distribution Recommendation Form which we will provide to you, or access the form at
jewishdetroit.org/distribution.

Q: May I recommend support for the general operating budget of a charity?
A: Yes. You may suggest a distribution for general support, as well as distributions for capital or endowment campaigns or specific projects.

Q: May I recommend a distribution for tickets to a fundraising event?
A: No. Philanthropic Fund assets cannot be used to purchase tickets or pay for any portion of attending an event.

Q: I would like to recommend a distribution to complete a pledge I have made to a charity other than Federation’s Annual Campaign. Is that all right?
A: Unfortunately, such a recommendation is not appropriate under the IRS regulatory limitations placed on Philanthropic Funds, since Philanthropic Fund assets cannot be used to satisfy a binding personal obligation. The United Jewish Foundation of Detroit, acting on behalf of a Philanthropic Fund, can make a multi-payment pledge to be paid from the Fund. Please contact a member of Federation’s Endowment team for specific wording before completing any gift documentation. In addition, a Philanthropic Fund can be used to pay a non-binding gift.

Q: I would like to support a charitable organization which is located in another state. Is this possible?
A: Yes. You may recommend supporting any 501(c)(3) public charity anywhere in the United States.

Q: Will I be notified when a distribution that I have recommended has been made?
A: Yes. We will mail you a copy of the distribution letter so you’ll know it has been paid.

Q: Now that I have established a Philanthropic Fund, I’d like to wait until later this year to recommend any distributions from the fund. Is that permissible?
A: Yes. You may recommend distributions at any time – now or in the future. You may even wait until a
future year to do so.

Q: What about synagogue memberships – can I recommend a distribution to cover dues?
A: No. Because synagogue membership is deemed to provide a personal benefit to you, the United Jewish Foundation of Detroit cannot make distributions to pay for membership dues. Other contributions to synagogues such as endowment funds and special campaigns are permitted.

Q: Are there any other types of distributions that are inappropriate for a Philanthropic Fund?
A: Because Philanthropic Funds are regulated under federal tax rules, such funds are not able to make distributions that benefit a specific person. Also, Philanthropic Funds cannot make distributions to private foundations or any nonprofit that is not an IRS approved 501(c)(3) public charity.

Q: I can think of a distribution where I might want to remain anonymous. Is this possible?
A: Yes. All you need to do is to let us know in writing that you wish to remain anonymous for a particular recommended distribution. You will receive notification when the distribution is made – but it will not identify you to the charity.

Q: Sometimes I am not sure about a particular charity that I am considering. Can your staff assist me?
A: Yes. The United Jewish Foundation of Detroit staff has extensive knowledge of the tax-exempt charitable organizations and community needs. We are pleased to provide information and assist in your consideration. If you prefer to do your own research, there are two websites that can assist you in determining the charitable status of an organization and finding charities that fit your desired goals – www.guidestar.org and www.charitynavigator.org.

Appendix II: Your Relationship with the United Jewish Foundation of Detroit

Communicating with the United Jewish Foundation of Detroit

As a donor, we encourage you to communicate with us in person, by telephone, U.S. Mail, email or Donorsphere. During office hours, all telephone calls are handled directly by staff. If we take a phone message or you leave a message in Federation’s voicemail for a member of our Endowment team, we will strive to return your call as quickly as possible.

Confidentiality of donor information

Information about United Jewish Foundation of Detroit donors is confidential. We do not disclose financial or personal information.

Information on charitable giving and organizations

To assist you in meeting your charitable goals, we are pleased to provide you with information on
charitable giving techniques, such as planned giving, as well as information about charitable organizations you may wish to support.

In our relationship with you, we encourage the involvement of your professional advisors. We cannot provide you with legal services. We encourage you to solicit legal and other professional advice, as needed, to ensure that your arrangements and dealings with the United Jewish Foundation of Detroit are appropriate and beneficial to you.

Our Family of Agencies

As a Philanthropic Fund participant with the Jewish Federation of Detroit / United Jewish Foundation of Detroit, we encourage you to consider supporting the Jewish Federation of Detroit’s Annual Campaign as well as our Jewish community’s 17 agencies, which are:

Farber Hebrew Day School – Yeshivat Akiva
BBYO, Inc.
Fresh Air Society / Tamarack Camps
Gesher Human Services
Hebrew Free Loan Association
Hillel Day School
Michigan State University Hillel
The Hillel Campus Alliance of Michigan
(HCAM): Western Michigan University/
Central Michigan University/Eastern
Michigan University/Alma College/Albion
College/Kalamazoo College/Saginaw Valley/
Grand Valley State University/Northern
Michigan University/Michigan Tech
University of Michigan Hillel
Hillel of Detroit: Wayne State University/
Lawrence Technological University/ Oakland
University/Oakland Community College/
University of Detroit – Mercy/University of
Michigan Dearborn
Jean & Samuel Frankel Jewish Academy
of Detroit
The J (Jewish Community Center)
Jewish Community Relations Council/AJC
Jewish Family Service
Jewish Senior Life
Yeshiva Beth Yehudah
Yeshivas Darchei Torah
Yeshiva Gedolah of Greater Detroit

Appendix III: Philanthropic Fund Agreement

Click here to View/Download Agreement.

Appendix IV: United Jewish Foundation Philanthropic Funds Policies and Procedures

The Federated Endowment Fund
Jewish Federation of Detroit/United Jewish Foundation of Detroit

SEC. 1. ESTABLISHMENT AND PURPOSE

1.1 Authorization. The Jewish Federation of Detroit and the United Jewish Foundation of Detroit, nonprofit Corporations (hereinafter referred to as “Federation”) have authorized the establishment of Philanthropic Funds as component funds of the Federation and have authorized the Chief Executive Officer and the Grants & Distributions Committee to provide all needed rules, procedures and policies for the establishment and administration of such Funds, subject to the authority of the Board of Directors.

Procedures. These procedures are prescribed by the Grants & Distribution Committee, with the approval of the Board of Directors. The procedures set forth herein are subject to change by the Federation from time to time with respect to existing and future funds.

1.2 Establishment of Funds. Philanthropic Funds may be established by the donation or transfer by a person (hereinafter “Donor”) to, and acceptance by, the Federation of money or property, whether by contribution, devise or by transfer from a charitable or other organization (hereinafter “contribution”), to further carry out the purposes of the Federation, as set forth in its Articles of Incorporation. Philanthropic Funds are and shall be administered as part of the Endowment Funds of the Federation. However, the procedures set forth herein are provided in recognition of a particular purpose of Philanthropic Funds, which is to develop interests and activities of the Federation by a wide range of living donors. The establishment of Philanthropic Funds is designed as a means of broadening the base of endowment support, encouraging meaningful interchange of ideas by donors in the Federation’s philanthropic interests and to provide funds to supplement and extend the programs and interests of the Federation in serving its charitable, educational, cultural and religious purposes (which purposes are hereinafter referred to as “charitable”) and shall encompass only charitabl
purposes as defined in sections 170 (c) (1) (2) of the Internal Revenue Code.

1.3 Nature and Terms of Funds. Each Philanthropic Fund shall be the property of the Federation held in its normal corporate capacity, not as a trust fund held by the Federation as a trustee. Each Fund shall be recorded on the books and records of the Federation as an identifiable or separate fund and may be given a name as requested by the Donor.

1.4 Designated Funds. In establishing a Fund, the Donor may recommend the use of the income or assets of the Fund for the benefit of or in the furtherance of the purposes of one or more specified charitable organizations (described in IRC section 509 (a) (1), (2) or (3)) where such use is consistent with the purposes of the Federation. Distributions from such a Fund will be made for the purposes so designated. Such a Fund is subject to the authorization of the Federation to modify any restriction or condition on distributions if, in the sole judgment of the Federation, such restriction or condition becomes unnecessary, incapable of fulfillment, or inconsistent with the Federation’s charitable purposes.

1.5 Forms. The Chief Executive Officer of the Federation is authorized to provide forms for the establishment of and additions to Philanthropic Funds and such other forms as are necessary or desirable for the administration of Philanthropic Funds in accordance with these procedures.

SEC. 2. ACCEPTANCE OF FUNDS

2.1 Authorization. The Chief Executive Officer or the Chief Financial Officer of the Federation (or such additional officers or employees of the Federation as may from time to time be authorized) shall have the authority to accept, on behalf of the Federation, contributions to establish or add to a Philanthropic Fund. However, if any assets proposed to be contributed are not in the sole judgment of Federation readily marketable or are subject to liabilities, the Chief Executive Officer and one other officer of the Federation, acting jointly, shall have authority to accept or reject the assets proposed to be included in a Philanthropic Fund. The Federation will not certify to a Donor the value of a contribution of property. A Donor may not impose any material restriction or condition that prevents the Federation from freely and effectively using the contributed assets, or the income derived therefrom, in furtherance of the charitable purposes of the Federation.

2.2 Minimum Fund Balance. A minimum amount of $5,000 is established as a prerequisite for creation of a Philanthropic Fund. Any fund with a balance of less than $100 will be terminated by transfer of the remaining assets thereof to the United Jewish Foundation.

SEC. 3. INVESTMENT OF FUND ASSETS

3.1 Responsibility. The Federation has the responsibility and authority for the investment of the assets of each Philanthropic Fund. At the discretion of the Federation, the assets of any Fund may be retained, invested and reinvested as a separate unit for investment purposes, commingled with those of other Philanthropic or Endowment Funds, or invested in units of a common investment fund.

SEC. 4. DISTRIBUTIONS FROM THE FUND

4.1 In General. The Federation shall monitor all distributions of income or principal of Philanthropic
Funds. The Donor of a Philanthropic Fund (or his/her designee, as permitted in Section 4.2 below)
may recommend to the Federation the making of distributions from the Fund which are consistent
with the specific charitable needs most deserving of support by the Federation. Such
recommendations will be solely advisory and the Federation is not bound by them.

4.2 Donor and Designee(s) Accorded the Privilege of Making Recommendations.
The privilege of making recommendations (as described in Section 4.1 above) shall be extended to Donor and their designee(s) at a Donor’s request. A Philanthropic Fund can be advised by persons representing up to two generations – the Donor and the next generation. At such time as there are no remaining donor advisors, the Fund’s balance is paid to the Jewish Federation of Detroit. For convenience hereinafter, the term Donor will include and shall apply to all persons having the privilege of making recommendations.

4.3 Limitations. The following limitations apply to all distributions from Philanthropic Funds:

4.31 The minimum amount of any one distribution from a Philanthropic Fund shall be $250.

4.32 The Federation, as a public charity, will not make any distribution from a Philanthropic Fund except as a distribution from the Federation for its charitable purposes. No such distribution may be used to discharge or satisfy a legally enforceable pledge or obligation of any person (such as membership fees or contributions from which the Donor receives any personal benefit).

4.33 Unless otherwise agreed in advance, any pledge entered into after the establishment of a Philanthropic Fund, to the Federation or its constituent agencies, shall constitute a request to distribute the amount thereof from the Fund to Federation. If the amount of the pledge is larger than the amount of the Fund, the excess shall constitute a legally binding pledge.

4.34 At the death of the Donor, in the event there are outstanding unpaid obligations to Federation, including Federation’s Annual Campaign or any Federation constituent agency, Federation may first use any remaining Fund balance to satisfy any unpaid obligations to Federation and thereafter to Federation’s constituent agencies.

4.4 Procedure.

4.41 Recommendation by Donor. A donor may make recommendations with respect to distributions from a Philanthropic Fund. Donor recommendations must be submitted in writing or electronically.

4.42 Staff Investigation. With respect to each recommendation by a Donor, the Federation will make an initial determination of whether the recommended entity is a valid 501(c) (3) organization.

4.43 Authorization Procedure. The Grants & Distributions Committee shall consider the allocation of funds from the Philanthropic Fund to the recipient charitable organization(s) for approval or other appropriate action.

4.5 Notification to Grantee as to Source of Distribution. Any distributions from a Philanthropic Fund, unless otherwise requested by the Donor of the Fund, shall identify to the grantee organization the name of the Fund from which the distribution is made.