Hivemind: Corporate charity funds

I've heard that some law firms require their associates to contribute a certain percentage of their income to corporate-sponsored charity funds, known as "donor advised funds."

Besides the rather cursory information available on the IRS website, I'm having a hard time finding out much about these structures. There's lots of information about donor advised funds for individuals, but I'm not finding a lot of info on funds sponsored by businesses and other organizations.

So, I'm throwing the questions out to the hivemind.

1. Is it possible to determine from public records whether a firm has a donor advised fund(s), and how the fund is disbursing the money?

2. What rights do associates have to monitor the activities of their firm's fund?

3. Why would a law firm want to start such a fund in the first place?

Comments

[mudkitty]

test.

[A Donor]

I have a personal donor-advised fund at a community foundation. I don't know exactly how corporate donor-advised funds work, but I do know a bit about donor-advised funds in general.

All grants from donor-advised funds must go to 501(c)(3) organizations (charitable organizations registered with the IRS). Once the money is contributed by the donor to the fund, it doesn't belong to the donor anymore. At least at my fund, and I think at all funds, donors are not permitted to get any personal benefit (like seats at charitable dinner) for their donation-- though the grantee does know where the money comes from, if the donor chooses to release that information. Legally, the original donor merely "advises" the foundation as to where the grants should go, but as a practical matter that advice is almost never rejected unless the grantee is not a qualified 501(c)(3) organization. A foundation that rejected donors' "advice" wouldn't stay in business long.

Individual donors set up donor-advised funds for tax reasons, as well as simplicity in donating. My spouse and I gave a substantial donation of stock options to our fund. We were able to deduct the market value of the stock on our taxes that year. That meant we got the tax advantage right away, but we were and are able to spend sufficient time researching charities so that we are sure we are giving where we want to give.

Moreover, it's convenient to donate from a fund. I just sign into my fund and list who I want to grant the money to and how much, and the community foundation handles all the paperwork. The money in the fund that has not yet been given to a grantee is invested by the community foundation.

As I said, I don't know much about corporate donor-advised funds specifically. In my opinion, employees should not be forced to contribute to such funds.