Guidelines for Accepting Donor-Advised Fund Contributions
Thank you for your generous and continued support of Phoenix Art Museum.
This information is intended as a summary of current guidelines for accepting gifts from donor-advised funds and private foundations. This is not intended as legal advice. Donor-advisors should consult their donor-advised fund (“DAF”) manager, tax advisors, and/or legal counsel to determine the tax treatment of their proposed contributions and any other restrictions that apply to these grants.
Guidelines for Events, Membership, and Pledges
Under federal law governing donor-advised funds, it is not permissible for donors to split, or “bifurcate,” payments for tables or tickets when a portion of the purchase is not tax-deductible. This means that donors may not recommend a grant through a DAF or a private foundation for the deductible portions of a table or ticket purchase and then pay the non-deductible portion from a personal source.
If a portion of event admission is not tax deductible, your DAF can support the event in the following ways:
- If you would like to attend an event and make an additional contribution, you may pay the full price of admission (non-deductible and deductible portions) from a personal source outside of your DAF. Then you may recommend a grant from your DAF. Phoenix Art Museum is pleased to recognize both your personal and DAF contributions in all event-related materials.
- If you purchase a table or tickets and donate them back to the Museum (and not attend the event), you may recommend a grant from your DAF or foundation, noting that the requested table or tickets shall be donated back to the Museum.
Grants from donor-advised funds to cover annual membership fees are acceptable if:
- The membership benefits are limited to incidental annual benefits, such as free or discounted admission to low-cost events, parking, preferred access, and attendance at certain members-only events.
- The donor waives all of the non-deductible (tangible) benefits if the membership level offers them the option.
An important note on tangible benefits: Under federal law, if any portion of the membership is not tax-deductible, you may either waive the tangible benefits or use a personal source to pay the entire membership value. Bifurcation is not permissible.
Although a donor-advised fund may not pledge account assets to Section 501(c)(3) and 501(c)(4) organizations, you may notify the organization verbally or in writing about the intention to make a grant recommendation and include the following recommended language:
“I intend to recommend a grant from a donor-advised fund. This notification shall not be construed as a legally binding commitment.”
For questions related to grants recommended through your donor-advised fund or foundation, please consult with your fund advisor or legal counsel for definitive tax treatment.
Thank you again for your continued support of Phoenix Art Museum.