The following procedures are designed to streamline the administration of your grant recommendations and ensure compliance with the laws governing donor advised funds. The failure of a Fundholder to comply with these procedures may result in JCF closing the fund and transferring the assets to the JCF Special Gifts Fund.
Fundholders and certain Authorized Parties have the privilege of recommending grants to IRS-qualified sectarian and nonsectarian charitable organizations. All grant recommendations are nonbinding and are subject to JCF’s review. You may recommend as many grants as you wish at no extra charge, although the amount of each grant must not be less than the minimum* established by JCF. You must maintain a minimum balance of $500 in your fund to continue recommending grants.
Both realized income and principal are available for grant distribution. Please remember that grants made from your donor advised fund do not entitle you to an additional charitable deduction. Your charitable deduction was available at the time you contributed assets to your fund.
*The grant minimum is $36 for online grant recommendations to charities that do not require research. If you mail or fax a grant recommendation form to JCF, the minimum grant amount is $100. All NextGen Giving Funds have a minimum grant amount of $36. Minimum grant amounts are subject to change.
Language of Recommendation
You may recommend grants from your fund by logging into our website, or by completing a signed Grant Recommendation Form. Additional certifications may be required, particularly with respect to grants to supporting organizations.
Qualified Charitable Organization
Each organization recommended by the Fundholder or Authorized Party is reviewed by our staff to verify its tax-exempt status and official mailing address. All grants issued by JCF must be made to organizations that qualify as tax-exempt under Section 501(c)(3) of the Internal Revenue Code and that are classified as either public charities as described in Sections 509(a)(1), (a)(2), or (a)(3) of the Code or private operating foundations as described in Section 4942(j)(3) of the Code. We do not make grants to individuals, private non-operating foundations, “controlled” Type I or Type II supporting organizations, or Type III supporting organizations that are not functionally integrated.
JCF may decline to make a recommended grant to a charitable organization if such a grant is inconsistent with its policies and procedures or with the laws and regulations governing public charities and donor advised funds.
The Pension Protection Act (PPA) of 2006 imposed requirements on grants to supporting organizations from donor advised funds. Generally, a supporting organization is a 501(c)(3) public charity that operates to support another related public charity. Common examples include alumni associations and hospital foundations. In cases where a grant is recommended to a supporting organization, JCF must obtain additional information and documentation as part of our due diligence before approving the grant. Under the PPA, we are not permitted to make grants to an organization that is a non-functionally integrated Type III supporting organization. If an organization is a Type I, Type II or functionally integrated Type III supporting organization, the Fundholder will be required to sign an additional certification and the grantee will be asked for additional documentation.
Please be advised that grants to all supporting organizations necessitate an increase in research and due diligence in order to ensure compliance under the PPA and will increase the processing time.
If you have questions about supporting organizations, please contact us.
To recommend a grant to a charity in Israel, JCF utilizes the services of several intermediary organizations that perform due diligence and other ongoing monitoring on the Israeli charities at no cost to the Fundholder. When recommending grants to any of these intermediaries, Fundholders must specify the specific charitable organization in Israel they are recommending receive the grant.
To recommend a grant to a charity outside the United States (other than grants to Israel through one of the intermediaries), JCF utilizes the services of NGOsource (a project of the Council on Foundations and TechSoup Global) to conduct the due diligence. Depending on the country and the due diligence necessary, the international grant-making process may take several weeks.
The grant minimum for utilizing NGOsource is $10,000. The fee charged by NGOsource for the due diligence may total up to $2,000 and will be charged to the Fundholder’s fund. The fee will be waived for funds with balances over $1 million.
JCF makes grants exclusively for charitable purposes and reserves the right to conduct due diligence and to decline grant recommendations. Grants may not be earmarked for the benefit of particular individuals or families. In the case of a scholarship, a grant may be recommended to name and/or support a general scholarship fund of a public charity where the recipient is selected by the grantee organization through a process that is not controlled by the Fundholder or related parties. If a Fundholder recommends that a grant be used by the grantee organization for a particular approved purpose, JCF assumes no responsibility for enforcing compliance by the organization with respect to the recommended purpose. In the absence of a recommended purpose, the grant will be unrestricted for general purposes.
JCF cannot make grants that provide an impermissible benefit to the Fundholder or any third party. This includes, for example, admission to charitable events, memberships that have a non-deductible portion, tuition, raffle tickets, and goods or services bought at a charitable auction. If a Fundholder wishes to accept tickets to a charitable event or receive more than incidental membership benefits associated with a charitable donation, they may not use their donor advised fund. If a Fundholder recommends a grant with the intention of receiving such a benefit or providing such a benefit to a third party, they may be subject to a penalty excise tax. However, Fundholders may use their fund if they decline tickets or more than incidental benefits associated with the recommended grant.
Additionally, grants cannot be made for lobbying purposes or to support political campaigns. Please see examples here.
Other Donor Advised Funds
JCF’s mission is to facilitate the distribution of philanthropic dollars to charitable organizations for charitable purposes. Grant recommendations to other donor advised funds will be reviewed on a case-by-case basis.
You may indicate in your grant recommendation the person(s) whom the organization may thank for recommending the grant. If you wish the organization to notify an individual not on the fund, this information will be included in the letter to the organization. We also ask that you kindly refrain from sending reservation forms, journal ads, or similar correspondence to us, as we are unable to forward these to grantee organizations on your behalf.
Minimum Grant Activity
JCF provides resources to engage its Fundholders and encourage annual grant-making. Historically, JCF has distributed more than 20% of its average net total assets to charities each year. JCF’s policy requires that annual grant-making, in the aggregate, be greater than 5% of JCF’s average net assets on a fiscal five-year rolling basis. If this minimum is not met in a fiscal year, JCF will identify each fund that has granted less than 5% of its average net assets over the same five-year period and contact Fundholders of these funds to request that they recommend grants that will bring the total amount distributed over that five-year period up to 5% of their fund’s average net assets.
If these Fundholders do not meet this minimum grant requirement within 90 days, JCF reserves the right to transfer the required amount from their fund to the JCF Special Gifts Fund. The JCF Special Gifts Fund is a board-designated fund that provides support for select projects in the Jewish community at the recommendation of UJA-Federation of NY. Distributions from the JCF Special Gifts Fund are made at the discretion of the JCF Board of Trustees.
Minimum Fund Activity
If a fund has not made any grants for a three-year period, JCF will make every effort to contact the Fundholders to encourage them to recommend a grant. If Fundholders do not respond within 90 days, JCF reserves the right to make a grant from the fund to the JCF Special Gifts Fund to support projects in the Jewish community.
Minimum Fund Balance
Fundholders are required to maintain a minimum fund balance of $500. Should the balance fall below $500, grant activity will be suspended until an additional contribution is made or the Fundholder notifies JCF that the fund will be closed and recommends grants for the remaining assets. It is recommended that Fundholders replenish the fund with assets sufficient to cover their grant-making in addition to maintaining a balance above $500. Please be advised that even if a fund is inactive, fees will continue to be deducted. If the fund balance falls below $100, it will automatically close. Once a fund has been closed, a minimum contribution of $5,000 is needed to reactivate the fund ($10,000 minimum for Corporate Funds).
Processing Your Grant Recommendations
Grant recommendations are processed by staff members who verify that all of the above criteria have been met. Grant checks are mailed to qualified grantee organizations typically within 3-5 business days of receipt of a Fundholder’s recommendations, although during high volume periods processing may take slightly longer. Grant processing may require more time in the event additional review is required to determine a recommended organization’s tax-exempt status or classification or if clarification is needed with respect to the recommended purpose. Situations that often prompt a call to the Fundholder, or to the recommended organization, before a grant recommendation can be approved include: reference to an event, membership, or individual without clarifying language (e.g., “no tickets,” “not attending,” “declining benefits,” “in honor of”).
To determine the tax-exempt status and classification of a recommended organization, JCF must verify certain information and will contact the organization to obtain the information. If the organization cannot be reached within 30 days, or if it does not provide the necessary information within 30 days, the grant recommendation may be denied. If the information is provided at a later date, the Fundholder will be informed so that they may make a new grant recommendation.
In the event that there is a delay in processing your grant recommendation, a member of our staff will notify you generally within 7 business days of receipt of your recommendation and keep you apprised of continuing efforts to obtain the necessary information to approve the grant. All qualified grant recommendations are submitted to the Charitable Distribution Committee of the Jewish Communal Fund’s Board of Trustees for approval.
How Grants Are Paid
All grants are made from the primary investments (institutional money market and/or short duration bond fund). If there are insufficient funds in the primary investments to cover grants and other expenses, we will liquidate the fund’s holdings in the investment portfolios, restore the required minimum balance in the primary investments, and notify the Fundholder of the transaction. Sales of the assets in the investment portfolios are made on a proportional basis, unless JCF’s Investment Committee authorizes such sales to be made in a different order.
When a check is sent, it is accompanied by a letter recognizing the donor advised fund from which the grant was made, and advising the grantee organization of the name and address of the Fundholder or Authorized Party to be thanked for the recommendation. Remember that Fundholders are not entitled to an additional deduction when a grant is made from their donor advised fund. The check itself bears the name of the Jewish Communal Fund, as well as the name of the donor advised fund. If Fundholders or Authorized Parties prefer a grant to be sent anonymously, please alert us in the grant recommendation and we will refrain from mentioning their name, address and fund name in our correspondence to the grantee organization.
Fundholders and Authorized Parties with online access can log into our secure website to see when a grant recommendation was received and when the check was printed.