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.
Grants Recommendations
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.
Supporting Organizations
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.
Supporting Organization Type I-II Questionnaire
Supporting Organization Type III Questionnaire
If you have questions about supporting organizations, please contact us.
International Grant-Making
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.
Charitable Purpose
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 of grant-making restrictions here.