Granting Guidelines
& Key Takeaways

AEF approves most grant recommendations to U.S. charitable organizations recognized as a 501(c)(3) organization. Potential grant recipients may include churches, educational institutions and governments.

AEF has a set minimum grant amount of $250.

Coffee mugs, water bottles, keychains, T-shirts and other minimal value collectibles are acceptable to receive in conjunction with a grant from a donor-advised fund. So are intangible religious benefits, newsletters and calendars.

Tuition, monetary rewards, tickets or meals are considered more than incidental benefits and cannot be accepted in conjunction with a grant from a donor-advised fund.

If all or any portion of the attendance costs is nondeductible, a donor-advised fund may not be used to pay all or any portion of the attendance cost. This is called a bifurcated grant and is considered a more than incidental benefit to the donor-advisor. This is because the IRS considers the relief of the donor’s obligation to pay full price of a ticket/admission to a charity-sponsored event a direct benefit that is more than incidental.

 

Bifurcated grants are any grants where the total grant is split into a tax deductible and non-tax deductible portion. Grants from a donor-advised fund cannot be used to pay any portion of a donation split into tax-deductible and nondeductible portions.

 

AEF will not approve the recommendation if the receipt of any benefit (such as attendance at a charitable event) is contingent upon the grant from the donor-advised fund as part of a larger donation. In other words, a grant from a donor-advised fund cannot be used to attend an event where a portion of the attendance cost is nondeductible and/or a more than incidental benefit is received, even if the donor-advisor pays for the nondeductible portion of attendance out of their own pocket.

 

A donor may make a grant to support or sponsor a charitable event or gala and receive acknowledgement for that support.

 

However, if in exchange for the grant, the charity offers a ticket to the event (such as tickets to a sporting event) or anything more than an incidental benefit, the donor must decline it.

No. Similar to Events and Galas, grants may not be used to satisfy the cost of a membership if the membership offers more than the incidental benefits to the donor.

No. Grants from a donor-advised fund cannot be used to benefit an individual.

However, the grant can be used to support missionaries. If a donor recommends a grant to an eligible charity to support the missionary work of an individual who is not a direct descendant or in the immediate family to the donor, the grant will be approved with a special statement added to the letter.

Donors may recommend a grant to a scholarship fund administered by an eligible charity or school, but it cannot be made payable to an individual.

 

Donors may recommend a grant for a charitable fundraising campaign, including a fundraiser where an individual is responsible for fundraising, but the individual fundraiser may not receive more than incidental benefit from the fundraising. Grants from a donor-advised fund to support a “GoFundMe” or similar online giving portal are not permissible.

A grant can be used to fulfill a pledge to a charitable organization provided that:

Donors may not deliver grant checks. The preferred method of grant payment is also the quickest and most secure, by ACH transfer.

In the event a grant check is issued, it will be sent by AEF directly to the charitable organization.

If a donor-advised fund does not submit a grant recommendation for 36 months, and a long-term granting strategy has not been submitted to AEF, AEF will contact the donor-advisors and request a grant recommendation. If a grant recommendation is not submitted, AEF will make a grant to the last charity to which the donor-advised fund granted.