Your questions answered
Benefaction’s Donor Advised Fund alternative
Benefaction Foundation runs multiple charitable giving programs with partner firms. We also deal with advisors one on one. We offer a donor advised fund platform that allows you to manage charitable endowment funds for your clients.
What costs are involved to set up a fund?
Benefaction charge an initial 2% for accounts up to 500k which drops to 1% for accounts over $500k and then to 50bps for accounts over $1M. This is unusual in our space, but our annual fees are quite low relative to our competitors. After a few years, we prove to be very cost effective.
What are the ongoing maintenance costs?
50 bps annually for accounts up to $1,000,000
What is the management fee and total of all fees?
That depends on the investment products chosen. The total costs would be the investment management fee (which includes the advisors fee) from the chosen product/account plus Benefaction’s charitable admin fees as outlined above.
Who decides on the investment?
We work with advisors to decide on an appropriate balanced portfolio. See our current approved list. This list is growing all the time and is not exhaustive. Some of our partners have proprietary products offered in their respective programs.
What is minimum account size? Is there a maximum?
$25,000 minimum, no maximum
Cost to transfer out if not happy?
Donors must write to Benefaction with a letter of instruction outlining their wishes. All fees owing plus any transfer costs will be attributed to the fund.
Do you offer short term funds?
Yes. Each funds has the ability to grant capital allowing donors to make exceptional gifts for important causes. Each fund can also be wound up and the entire amount granted out to other registered charities, including private foundations. This option should be written into the Donor Agreement at the fund’s inception.
How is the donor recognized?
That depends on how they want to be recognized. They have a choice: anonymous, the fund name or personal details to the charity. In terms of recognition from Benefaction, we send a welcome letter and semi-annual donor reports. We would also send a disbursement notice if the fund needed to make a grant before year end and we had not received instructions.
What degree of input from the donor in selecting the charity?
The selection of charities is totally in the donors control, provided it is a registered Canadian charity or qualified donee. Benefaction or its consultants can provide assistance and research to help select organizations where necessary.
Can a donation be made to a non profit?
Provided they meet the qualified donee criteria as outlined in the Income Tax Act.
Why is Benefaction a good solution?
- Lower administration costs make a meaningful difference. In the end, more money finds its way to charities and that is a good thing. It is good for donors, good for charities>> good for the world!
- We work with advisors to help them to retain and capture assets by incorporating charitable gift planning into their practice.
- Control and flexibility in terms of directing the donations to alternate charities because donors’ feelings in relation to their chosen cause change over time. Benefaction will take written instruction from the donor to adjust their grant recipients. This is not always an option for those who give to their local community foundations and never an option for those who give directly to the charity of their choice.