Frequently Asked Questions
Creating a legacy through Franklin Templeton Charitable Giving Fund is a simple process. Below are some commonly asked questions about donor-advised funds and Franklin Templeton Charitable Giving Fund.
What is Franklin Templeton Charitable Giving Fund?
Franklin Templeton Charitable Giving Fund is a donor-advised fund offered by Franklin Templeton Investments in conjunction with Renaissance Charitable Foundation, Inc., an independent public charity.
What is a donor-advised fund?
A donor-advised fund (DAF) is a charitable giving vehicle, which allows an individual, family or corporation to make an irrevocable, tax-deductible contribution of personal assets to a public charity, and at any time afterward, to recommend grants to qualified charitable organizations.
Donor-advised funds are administered through a public charity that pools donors' contributions, invests them according to the donors' investment selection and makes grants to charitable organizations upon the recommendations of donors.
Who is Renaissance Charitable Foundation, Inc.?
An independent public charity, and a tax-exempt organization as described under Internal Revenue Code Section 501(c)(3). Renaissance Charitable Foundation, Inc. (RCF) helps individuals and families reach their philanthropic goals simply and effectively. RCF is a national leader in trust administration within the philanthropic community, and has been at the forefront of this rapidly evolving industry for nearly 18 years.
RCF is the holder of all contributions to Franklin Templeton Charitable Giving Fund. When donors contribute to their donor-advised fund account, RCF receives the funds, and the donors receive an immediate tax benefit. RCF then administers the fund, including approving and distributing all grant recommendations.
What is GuideStar?
GuideStar assists donors by providing an online database of the programs and finances of more than 800,000 U.S. non-profit organizations. Philanthropic Research, Inc., a 501(c)(3) public charity founded in 1994, produces the GuideStar Web site. GuideStar's mission is to revolutionize philanthropy and nonprofit practice with information.
Why contribute to Franklin Templeton Charitable Giving Fund rather than directly to a charity?
Franklin Templeton Charitable Giving Fund provides a number of benefits that direct donations to a charity may not, including:
- A variety of professionally managed investment options that offer the potential for tax-free growth
- Flexibility to make grant recommendations anytime
- Simplified administration, no start-up costs, low fees and expenses
What is the difference between this fund and starting my own private foundation?
Starting a private foundation can involve substantial startup costs and administrative expenses, such as the yearly filing of a Form 990-PF. One of the most important differences, however, is that Franklin Templeton Charitable Giving Fund receives more favorable tax treatment than a private foundation. Donor-advised funds allow donors to take an income tax deduction up to 50% of adjusted gross income (AGI) for cash donations and up to 30% of AGI for appreciated securities; versus 30% for cash donations and 20% for appreciated securities, respectively, for a private foundation. Donor-advised funds also offer the ability to recommend grants anonymously.
Who should be listed as the donor?
The donor is the person(s) responsible for making the contribution(s) to the account. If the contributions are from joint ownership, then multiple donors can be listed. If the donor wants non-contributors to have rights to the account, they should name those individuals as account advisors.
What is an account advisor?
An account advisor is named by the donor to have access to recommending grants on the account. Usually a spouse or child of mature age is named as an advisor to the account.
What is a successor?
The successor is the person identified by the donor to take over the account after the donor's death. Multiple successors can be named to an account and, depending on the donor's wishes, the account can be split equally among the successors, or they can share the responsibilities. Successors can name successors to take over in the event of their death.
What is a charitable beneficiary?
A charitable beneficiary is a charitable organization(s) identified by the donor to receive either all of the remaining assets of the account or 5% of the account annually upon the death of all the original donors.
Can an account be named after someone besides the donor?
Yes, the donor can choose any name for the account. However, we recommend the name reflect the donor's name and/or the main purpose of the account, such as "The Smith Educational Fund."
What is the account minimum?
The minimum to open an account is $5,000.
Can the account minimum be spread across multiple assets and securities?
Yes, but each asset must have an estimated value of at least $1,000.
When is a contribution considered a charitable donation?
A contribution is complete when the asset is out of the donor's control. This definition varies depending on the type of asset and when it's transferred. The chart below describes when a contribution to Franklin Templeton Charitable Giving Fund is considered a completed contribution by Renaissance Charitable Foundation, Inc. and is organized by contribution type and delivery form. The contribution date determined from this chart will appear on the donor's tax receipt letter.
|Contribution type||Contribution form||Contribution date|
|Cash||Wire Transfer||Date of wire transfer receipt|
|Check||U.S. mail postmark date/FedEx arrival date|
|Stock||Transferred through Chase Investment Services Corp.||Date reflected in Renaissance Charitable Foundation, Inc. contribution receipt account|
|Transferred through Chase Investment Services Corp. in certificate form||Date when transfer agent changes records on books|
|Sent directly to Renaissance Charitable Foundation, Inc. in certificate form with a signed stock power||U.S. mail postmark date/ FedEx arrival date|
|Restricted Stock||Certificate sent to Renaissance Charitable Foundation, Inc. or its agent||Date when ownership name changes on transfer agent's books|
|Mutual Funds||Proprietary to Franklin Templeton||Date received in Renaissance Charitable Foundation, Inc. contribution receipt account at Franklin Templeton|
|Third party||Date received in Renaissance Charitable Foundation, Inc. contribution receipt account at Franklin Templeton or third party|
Is there an additional contribution minimum?
Yes, each additional contribution to the existing account must be at least $1,000.
How often may donors contribute to their account?
As often as they would like. Some people like to add to their accounts right after recommending grants. Others make regular contributions to build up the account for future grant making. The flexibility of the fund lets donors determine their giving timetable.
Are additional contributions to the account tax deductible?
Yes. Donors will be eligible for an itemized income tax deduction for a charitable contribution on the date the contribution is made to the fund. This deduction is subject to the deductibility limitations set by law. Donors may want to consult a tax advisor to review their personal situation. Donors will receive a consolidated statement of annual contributions and granting activity at the end of each fiscal year.
What types of assets can be contributed?
Cash, mutual funds and publicly traded securities are eligible. For other securities, such as restricted securities, art, real estate, or other hard-to-value assets, Franklin Templeton should be contacted at (800) 524-4040 because the transfer might take longer and involve additional costs and special instructions.
What type of asset is best to contribute?
Appreciated securities that have been held for more than one year make the most effective contributions. Donors avoid the capital gains tax on the securities and can deduct the total value of the contribution from their income taxes, up to 30% of adjusted gross income. Any excess tax deduction may be carried forward and deducted for five additional years after the year of the original contribution. Because of these advantages, donors are able to effectively give more to the causes they support.
Can donors contribute foreign stocks?
Yes, if they're traded on domestic stock exchanges. If they're not, please contact Franklin Templeton at (800) 524-4040 prior to the donation.
Can donors transfer assets from another donor-advised fund?
Yes, generally donor-advised fund programs allow donors to transfer funds from one program to another. Donors simply recommend a grant from their existing donor-advised fund account to their Franklin Templeton Charitable Giving Fund account. The grant should be to Renaissance Charitable Foundation, Inc. in care of the donor's account in Franklin Templeton Charitable Giving Fund. When the grant is received, the funds will be credited toward the donor's account. The account transfer does not result in a charitable contribution deduction because the donor has already received a tax deduction for the original contribution to a donor-advised fund.
Where does the income from the investment vehicles go?
Income from the investment vehicles is reinvested and may potentially increase the value of the account. The income is neither taxed to the donor nor is deductible as an additional charitable contribution.
How is the tax-deductible amount determined?
The value of the contribution is based on the date it arrives in Renaissance Charitable Foundation, Inc. contribution receipt account. For contributions of securities, the value of the donor-advised fund account may be different than the determined value of the contributions. This difference is due to market fluctuations and liquidation costs.
How quickly are contributions processed?
Publicly traded stocks are usually liquidated on the same or next market day after Renaissance Charitable Foundation, Inc. receives them. Cash contributions and securities, after they're liquidated, are invested as quickly as possible.
What is the last day this year donors can still make a contribution to receive the tax benefit?
For cash, donors must be able to show that the contribution left their possession as an irrevocable transfer to Renaissance Charitable Foundation, Inc. before the end of the calendar year. For restricted or non-publicly traded securities, the last day to initiate the asset transfer is close of business on the last business day of November. For publicly traded mutual funds, the last day to initiate the asset transfer is close of business December 16. For publicly traded stocks and bonds, the last day to initiate the asset transfer is close of business on the last business day of December.
Do donors file the contribution receipt with their taxes at the end of the year?
Donors will receive a Form 8283 for noncash charitable contributions to file with their tax returns at the end of the year. It's important however, that they verify the documentation on the form since they'll be held liable for incorrect information. Donors should also consult with their tax advisor.
What are the liquidation costs?
Liquidation costs will depend on the type of security donated. For publicly traded securities, these costs are comparable to an institutional trade. For other types of assets, liquidation and appraisal costs could be higher.
Are there other costs associated with the fund?
Each account is subject to an administration fee, which is paid to Renaissance Charitable Foundation, Inc., to cover administrative expenses. The following annual fee schedule will be applied against the balance in a donor's account at the end of each month. For instance, an individual with a month-end account balance of $100,000 would be assessed a monthly fee of 1/12 of 0.75% or 6.25 basis points for administration.
|Month-end account balance||Annual fee|
|Up to $1,000,000||0.75%|
|$1,000,001 to $2,500,000||0.65%|
|$2,500,001 to $5,000,000||0.55%|
What are the investment options for this fund?
There are five predefined investment strategies:
- Corefolio® Strategy
Invests in three equity funds, each of which has delivered strong performance for over 50 years. Offers the potential for long-term growth and significant diversification across multiple industries.
- Founding Funds Strategy
Invests in equal allocations (33 1/3%) in three value-oriented funds—each a cornerstone fund with a 50-year track record. Offers diversification across multiple asset classes and a record of low relative volatility with the potential for attractive long-term results.
- Growth and Income Strategy
Invests in equal allocations (33 1/3%) in three funds. Seeks to realize both capital appreciation and current income by investing primarily in income-producing equity securities.
- Fixed Income Strategy
Invests in equal allocations (50%) in two income funds. Seeks current income by investing in a variety of debt and income-producing securities.
Are there investment-management fees?
Each investment strategy invests in Franklin Templeton mutual funds, which are subject to varying levels of operating, management and distribution expenses that are reflected in the daily net asset value. No sales charges are incurred on purchases of mutual funds in the strategies. Expenses are subject to variation and are disclosed in the individual mutual fund prospectuses. The estimated expense ratio of each investment strategy is:
|Investment strategy||Estimated annual expense ratio|
|Founding Funds Strategy||1.55%|
|Growth and Income Strategy||1.74%|
|Fixed Income Strategy||1.27%|
|Create Your Own Giving Strategy||1.12%-1.78%|
How quickly are grants processed?
Grants are usually processed within two weeks.
How many grants can be made in a year?
There is no limit to the number of grants made out of an account. The minimum grant amount is $250.
Is there a transaction charge on grants?
There are no transaction charges for grants to U.S. charities. Charges may be assessed on grants to foreign charities.
How will a donor's name be sent to the charity or nonprofit?
For each grant made, the donor has the choice to be named on the grant that is sent to the nonprofit or to remain anonymous. Grants can also be made in the name of another person. A grant letter from Renaissance Charitable Foundation, Inc. (RCF), on behalf of Franklin Templeton Charitable Giving Fund, will be sent to the approved charity notifying the organization of the donation.
What charities and nonprofits can grants be made to?
Grants can be made to charitable organizations that are tax exempt under Internal Revenue Code (IRC) Section 501(c)(3) and public charities under IRC Section 509(a). Grants can be made to private operating foundations but cannot be made to private non-operating foundations. Most established religious organizations and educational institutions are not listed as 501(c)(3) nonprofits but are nevertheless tax-exempt charitable organizations. RCF will facilitate making grants to such organizations.
Can donations be made to foreign organizations?
Yes, RCF has worldwide grantmaking authority. Due to additional procedural costs, an additional fee is charged to process such grant requests.
Are there limitations on grants?
Yes, RCF cannot approve grants that satisfy a pre-existing pledge or are used for any private benefit, such as dues, membership fees, tuition payments, goods purchased at a charitable auction, or to political candidates or parties.
Can donors name one or more charitable organizations as a beneficiary upon their death?
Yes, donors can name a charitable organization(s) to receive either all of the remaining assets of the account or 5% of the account annually upon the death of all the original donors.
How are grants divested from an account?
The funds for grants are taken out of the account proportionately.
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